New Advocacy Report on Immigrant Entrepreneurship

June 13, 2012

A new report from the U.S. Small Business Administration (SBA) Office of Advocacy shows that immigrant entrepreneurs play a critical role in the success of our economy and start 17 percent of all new businesses in the U.S. According to the study, “Immigrant Entrepreneurs and Small Business Owners and their Access to Financial Capital,” immigrants have a higher business ownership rate (10.5 percent) than non-immigrants (.3 percent), and the business formation rate also is higher among immigrants (.62 percent or 620 out of 100,000) than non-immigrants (.28 percent of 280 out of 100,000).

With respect to access to capital, the study found that immigrants often started off with higher levels of capital (approximately 20 percent started off with more than $50,000 in capital) when compared to their non-immigrant counterparts (15.9 percent started off with more than $50,000 in capital), with the most common source of capital being personal or family savings. Immigrants also were found to be more likely to export their goods and services. Approximately 7.1 percent of immigrant firms exported their products (good / services) compared to 4.4 percent of non-immigrant firms.

Advocacy’s summary of the report highlighted several other aspects of the study including:

  • Businesses owned by immigrants have an average sales level of $435,000, roughly 70 percent of the average sales level of non-immigrant firms;
  • Immigrant-owned businesses are slightly more likely to hire employees than non-immigrant-owned firms; however, they tend to hire fewer employees on average;
  • Entrepreneurship increases with maturity, and married people are more likely to start a business;
  • More generally, there is a U-shaped relationship between entrepreneurship and education. Entrepreneurship rates are lower for high school graduates than for high school dropouts, but entrepreneurship rates are similar between those with some college and high school graduates. College graduates have higher rates of entrepreneurship, and those with graduate degrees have the highest rates of entrepreneurship; and
  • Among immigrants, 52.1 percent owned a home compared with 70.8 percent of non-immigrants.

Immigrant entrepreneurs (and more specifically high-skilled immigrant entrepreneurs) play a crucial role in job creation and new business formation in this country.

Please click here to view the full report.