Several academic studies on immigrants in the United States back up the assertion that immigrants are more entrepreneurial than the local population, with business ownership being higher among immigrants than among locally-born Americans. The research findings are based on statistical data obtained from numerous official sources, and what’s more, indicates that the gap is widening – the rate of entrepreneurship in the immigrant population of America is increasing, while it is decreasing in the locally-born population.
The figures speak for themselves – immigrants in the US have a higher rate of business ownership than locals: 10.5 per cent as opposed to 9.3 per cent. The business creation rate is also consistently higher for immigrants than it is for locals, with 430 out of every 100,000 immigrants starting a business in 2013, as opposed to 250 out of every 100,000 Americans.
Immigrants as a percentage of the self-employed have also more than doubled since 1980, and the percentage of immigrants among business owners is greater compared to the percentage of immigrants in general employment. About 25 per cent of new entrepreneurs in the United States are immigrants, while less than 20 per cent of the work force is made up of immigrants.
Despite the general perception of immigrant entrepreneurs as owning low-end businesses such as restaurants and shops, a significant number of immigrants work in high-skill jobs in the technology sector.
Faced with these incontrovertible facts, analysts argue that increased immigration is one of the principal ways of countering the decline in entrepreneurship seen in the US.
Several other countries have recognized the entrepreneurial nature of immigrants, and as a result have set up new immigration schemes to attract immigrant entrepreneurs. Canada, the Netherlands, Israel, Spain, Germany, Australia, Italy, and the United Kingdom have all developed entrepreneur visas for this purpose.
The schemes can have several unintended benefits as well. One such scheme in Chile resulted in valuable knowledge sharing that boosted local entrepreneurship in addition to being extremely successful in its own right.
In the US, President Obama’s executive action on immigration, and new legislative proposals have been aimed at increasing immigrant entrepreneurs. Several states and cities have started their own schemes as well. For example, Massachusetts now uses the university exemption from the H-1B visa scheme to encourage immigration by entrepreneurs. On a federal level the newly initiated Startup Act aims to create an American startup visa.
While all these are steps in the right direction, further schemes are needed to boost entrepreneurship in the US, including one that encourages foreign graduates to remain in the US and provides vital support and resources if they aim to start a company.
In light of the fact that immigrants start businesses at a higher rate than local-born Americans, and are undoubtedly essential to economic growth and job creation in the US, it is vital the US government implement measures to boost their presence in the country.