Thread: Immigrants More Likely to Be Entrepreneurs?

Wadhwa does not give any references to the study he cites to support his assertions. There is a personal contact form on his research site given at the end of the article.

Immigrants are more likely to be entrepreneurs

A new study shows conclusive evidence that immigrants are more likely to start new businesses. And those businesses make significant
contributions to U.S. economic activity

By Vivek Wadhwa

I published a research report back in 2006 showing that over 50 percent of Silicon Valley engineering and technology startups were founded by immigrants (as were 25 percent of such startups nationwide), I concluded that immigrants were more likely to be entrepreneurs. Most of the feedback I received was extremely positive. But I also took fire from a few well-known open-immigration policy opponents, including professor Norm Matloff of the University of California at Davis, who said that large existing immigrant populations in tech centers skewed the results of my survey of 2,054 companies.

Matloff has argued, in academic listservs and in a volley of e-mail exchanges with me, that all things being equal, immigrants are no more likely to start businesses than U.S. citizens and permanent residents. He says this is particularly true in Silicon Valley, because immigrants comprise about 50 percent of the population. Therefore, his argument goes, immigrants really only displace entrepreneurs who are U.S. citizens and permanent residents, rather than augment the total number of startups and add real economic value.

But I continued to believe the high immigrant population was reflective of higher-risk appetites required for environments like Silicon Valley, where joining a startup is always a risk. In other words, choosing to start a business is a process of self-selection, not a numbers game that happens because a lot of immigrants happen to live in one area. At a gut level, one would think that immigrating to a new country is risky and therefore new immigrants have a higher risk appetite than U.S.-born folks. Truly conclusive data, however, was difficult to put together due to limitations on sample sizes.

Comprehensive SBA Study
Now, a November 2008 study by Robert W. Fairlie, a professor at the University of California at Santa Cruz, gives the strongest evidence to date that critics of open-immigration policies have misjudged the impact of immigrants on the U.S. economy.

Issued under the auspices of the U.S. Small Business Administration, the peer-reviewed study pulled data from three large, nationally representative government data sets, and found that immigrants are almost 30 percent more likely to launch a business than non-immigrants. According to the study, roughly 16.7 percent of all new business owners in this country are immigrants, yet immigrants make up only 12.2 percent of the workforce in the U.S. It also found that immigrant-owned businesses contributed roughly $67 billion to the country's business income, out of a total of $577 billion in 2000. Although this total is slightly below a one-to-one ratio of immigrant population to immigrant-owned business, it is still a very significant chunk of economic activity. And keep in mind, these economic activity findings were from eight years ago, so the total economic activity contribution has likely increased since then.

The data from the study also disprove the commonly held perception that immigrants are most heavily represented in lower-income tiers. According to Fairlie's research, the average annual net business income of an Indian-owned business is $83,000, the highest average of any immigrant group broken out in the research and higher than the average for U.S.-born entrepreneurs by $33,000. Chinese-owned businesses slightly underperformed those of U.S. born-entrepreneurs by $3,000 per year, but businesses of many other immigrant nationalities, including Taiwanese, Canadian, Filipino, and Greek, strongly outperformed the average for U.S.-born businesses.

The Numbers Don't Lie
It's no surprise that the study showed immigrant business owners comprise an even higher percentage of total business owners in some of the most dynamic business locales in the country. In California, over 30% of all businesses are immigrant-owned. In New York, nearly a quarter of all businesses are immigrant-owned. Nor were the immigrant businesses clustered in areas such as high tech or lawn care. Immigrant founders held disproportional shares of a variety of businesses, including media and transportation.

These obvious discrepancies between my critics' assertions and reality could probably be explained away with some logical gymnastics. But the numbers, in this case, simply don't lie. The three data sets used in Fairlie's study are some of the largest that could be accessed for research like this. This research, once and for all, puts an end to debate about the value immigrant entrepreneurs bring to America's economy. The answer is clear now—a whole lot.

Wadhwa is Wertheim Fellow at the Harvard Law School and executive in residence at Duke University. He is a tech entrepreneur who founded two technology companies. His research can be found at www.globalizationresearch.com. .

http://www.businessweek.com/smallbiz/co ... 711355.htm

I bet so. They are told to get ITIN numbers and away they go.

ITIN holder pay taxes if the business has an income on the positive after deduction for the this and that.

Every American Citizens should have a business, too.

America does not need anymore foreigners starting business in our towns, to be here illegal and to destroy our country and economy.

I don't know how accurate that is. Can't say I've seen any high tech industries like they report and even though they do open restaurants and such......can't say all that many have had a long term success rate. Plus, don't they get tax breaks and such that citizens don't qualify for? Many are only family run, so it doesn't really open many oppertunities for the citizens living here.

Americans did as well for awhile, till they got run out in one way or another with chains. We had American business owners who ran landscaping businesses and such.....but they didn't have the luxery to not offer alot of the perks or not abide by the law in order to get away with things that some immigrants do. Landscaping might have been good for awhile, but many are going under now because it's a luxery many can do without when times are tight. Even when you find a nich....it's not long till they find a way to make it not profitable to do it with more restrictions and such.

My neighbor years ago started a daycare because she had so many friends needing a sitter. She did real well....then the restrictions and standards and inspections and state approvals for her dietary guidelines and all the rest stepped in. They made what was a good and fun business to do into a nightmare. She wasn't the business owner anymore.....they dictated what she will and will not do. Right down to an addition to her home for "occupancy" rules to meet with the housing standards, because x many hours a day there were more people than what they deemed ok. They complicated her right out of business because it wasn't worth it anymore.

My brother-n-law is a business owner and he has to move every year because they get you into a complex and give you decent rental and then a year later double it to where you can't afford to stay there and still remain in business.

Plus with the recent huge influx of immigrants.....we haven't hit hard times to where people are sue happy. Bet that Mexican grocer here would have been out of business when so many got sick from samonella tainted cheese from a non-existant cheese factory he sold there. They went to the ER's got treated and wouldn't turn on one of their own.....had it been customers who footed their own medical care and had no personal attachment to the guy and he'd have been in trouble. In tight times, we'll have to see how well they'll hold up.

Not to mention, some come here with alot of money for the sole purpose of opening a business or joining with other family members to do that......many of us have our families scattered all over and don't have the base we used to have. I mean remember....diversify, diversify, deversify.........some of our recent immigrant businesses are smoking lounges where they smoke the huka pipe. (sp?) Looks like a giant bong to me and in this PC world it wouldn't fly if it weren't for so many comming here from the Middle-East who have that as a social thing, not much different than a coffee shop.....yet you can't have a cigarette in a bar. Don't know what the cancer studies are for that kind of smoking....but give it enough time and they'll find a way of making it go by the wayside as well. In some states, you couldn't even have one of those pipes......it would fall under drug paraphranallia. From what I've seen it's pretty much a man thing and they haven't had the laws and restrictions or mandates that I would have if I wanted to open a pipe lounge. Seems to be hit....but we'll see in a few years how it goes. We've had alot of taco and burrito shops open, but they don't keep regular hours and some aren't very welcoming for anyone who isn't one of their own....so I've seen them closing or just opening on weekends. Time will tell how successful they'll be in the long run.

Gee maybe it has something to do with the billions of dollars given by la Raza and other organizations to immigrants illegal and legal so they can start businesses...are Americans getting the same kind of funding, I doubt it!

See also
"Turning Green Cards into Gold"
http://www.alipac.us/ftopict-138971.html

"Immigrants" (that includes illegal aliens) are more likely to get incentives to start a business, any business, even if the business is a crock of you-know-what.
Tax-exempt for seven years, freebies out the wazoo, and those "immigrants" are more likely to have possession of multiple IDs that are used to collect welfare, WIC, and other services repeatedly.

I wouldn't say they are more "entrepreneurial, unless fleecing the American people is considered a business.

Originally Posted by SeaTurtle

"Immigrants" (that includes illegal aliens) are more likely to get incentives to start a business, any business, even if the business is a crock of you-know-what.
Tax-exempt for seven years, freebies out the wazoo, and those "immigrants" are more likely to have possession of multiple IDs that are used to collect welfare, WIC, and other services repeatedly.

I wouldn't say they are more "entrepreneurial, unless fleecing the American people is considered a business.

I do believe that is exactly what has happen, it has become a very profitable business by , illegals, congress, special interest and corporate globalist.