Immigrant entrepreneurship stagnates in U.S., accelerates in Washington state

Washington state saw a significant jump in the rate at which immigrants start new tech companies. Source: Kauffman Foundation

In the Seattle tech community, you can’t wander too far without bumping into an immigrant entrepreneur. Companies started by Indians, Australians and Chinese form the bedrock of the tech community.

But a new study indicates that the rate of entrepreneurship among immigrant entrepreneurs is on the decline nationwide and in Silicon Valley. Interestingly, however, Washington state’s immigrant entrepreneurship rates are on the rise.

The proportion of immigrant-founded companies nationwide has dropped from 25.3 percent to 24.3 percent since 2005, according to a new study conducted by The Kauffman Foundation. That’s a small drop, but the authors of the study still write that it shows that the “dynamic period of expansion has come to an end.”

In Silicon Valley, for example, the report found that 43.9 percent of startups created in the last seven years have at least one immigrant founder. That compares to 52.4 percent for the earlier period.

In fact, New Jersey and Massachusetts now boast a higher rate of immigrant entrepreneurs. Washington state also bucked the national and California trends, showing a significant jump in the rate of immigrant entrepreneurship from 11.3 percent in 2005 to 28.6 percent. It was the only state that showed a statistically significant change in its percentage of immigrant founders.

Meanwhile, about five percent of immigrant-founded companies are now in Washington state, up from just one percent for the study-ended in 2005.

The study concludes that immigrant founders of engineering and technology companies employed roughly 560,000 workers and generated an estimated $63 billion dollars in sales from 2006 to 2012.

“While the rate of growth of immigrant entrepreneurship has stagnated, these numbers nonetheless underscore the continuing importance of high-skilled immigrants to the maintenance and expansion of the national economy. These findings are interestingly complex, since the two major skilled-immigrant groups—Indian and Chinese— are starting companies at higher rates than they did previously. Historically and today, the United States continues to benefit directly from the contributions of such immigrants. Far from expendable, high-skilled immigrants will remain a critical asset for maintaining U.S. competitiveness in the global economy.”

Here’s the full report:

Then and Now Americas New Immigrant Entrepreneurs

  • http://www.facebook.com/leslie.helm.9 Leslie Helm

    This is very significant. It underscores just how much we depend on immigrants for our economic vitality.