Immigrants Form 25% of New U.S. Businesses, Driving Entrepreneurship In 'Gateway' States

Immigrants Form 25% of New U.S. Businesses, Driving Entrepreneurship In 'Gateway' States

Immigrants Form 25% of New U.S. Businesses, Driving Entrepreneurship In 'Gateway' States

The FINANCIAL -- The figure of the entrepreneurial immigrant who pursues the American Dream is woven into the national narrative, economy and psyche.

From Scottish-born inventor Alexander Graham Bell and native German blue jean tycoon Levi Strauss to Moscow-born Google co-founder Sergey Brin, Turkish-born Chobani chief Hamdi Ulukaya and many others, immigrants have generated wealth as they made their mark on American culture, science, technology and business.

Famous billionaires and multi-millionaires, however, aren’t the only immigrants helping to fuel the economy, as recent research underscores, according to HBS.

Immigrant entrepreneurs create about a quarter of new businesses in the United States, with the numbers varying widely by location, according to a National Bureau of Economic Research working paper.

“Immigrant entrepreneurship is very important for America,” a pair of authors from Harvard University and Wellesley College wrote in their April paper on immigrant entrepreneurs’ contribution to U.S. job creation and firm formation. “Dependency on immigrant founders varies substantially across America.”

Immigrants account for more than 40 percent of new businesses in California, New York and New Jersey and fewer than 5 percent in Idaho, North Dakota and some other places, according to Wellesley’s Sari Pekkala Kerr and Harvard Business School’s William R. Kerr, who analyzed U.S. Census Bureau data on firm ownership and the jobs those businesses generate.

Job creation closely tracks firm founding rates, they found.

While immigrant-created businesses provide employment and innovation, the researchers noted, immigrant-owned businesses appear to generate fewer jobs and offer fewer benefits. Immigrant-owned businesses also tend to create lower-paying jobs on average, the researchers found.