“According to the U.S. Census Bureau’s Survey of Business Owners, among the Fortune 500 companies, 40% were created by first- or second-generation immigrants.” – Sari Pekkala Kerr and William R. Kerr, “Immigrant Entrepreneurship in America: Evidence from the Survey of Business Owners,” National Bureau of Economic Research.
This week we’ve been focusing on Hispanic & Latino entrepreneurship. There’s so much to discuss about this booming sector of small business owners but the issues are apparent for all groups of immigrant entrepreneurs. With entrepreneurship considered as the cornerstone to our country’s economic recovery and with so many immigrants interested in the American Dream of business ownership, it makes perfect sense to address these issues sooner rather than later.
In many ways, immigrant entrepreneurs are no different than other small business owners. They start with a dream. They nurture the seed. And, if all goes well, it grows – bigger than even they had imagined.
The difference for immigrant entrepreneurs: they often start with fewer resources than the native-born. They struggle with things that other small business owners take for granted. And when they need help, they often have no one to turn to – no one but family or an informal network of other newcomers facing the same barriers.
Last year, Opportunity America conducted a series of round-table-like discussions with immigrant entrepreneurs including blue-collar Mexican Americans in Chicago, white-collar Mexican Americans in Phoenix, and a mixed group of Asian Americans – Indian, Chinese, Korean, Vietnamese, and Middle Eastern immigrants – in St. Louis.
The two questions at the heart of this Kauffman Foundation-funded research, which also included a small online survey: what accounts for the extraordinary entrepreneurial energy many newcomers bring to the U.S., and what barriers do they face in starting and growing businesses?
The responses showed that immigrants are twice as likely as native-born Americans to launch new businesses. Their firms often look similar to other startups: a little smaller, but with similar seed capital and a similar volume of sales per employee. Some are wildly successful – we all know the iconic brands. But many grow more slowly than other small businesses, and they are more likely to fail.
More than half of those who responded to the survey said they had always wanted to own their own businesses. Another 40% said they were drawn by the flexibility and independence of entrepreneurship. Fewer than 5% said they could find no other suitable employment.
Many seemed to feel that entrepreneurship was something they learned from their parents or others in the immigrant enclaves where they came of age – part of their immigrant DNA.
According to an article in Harvard Business Review, if you’re lucky enough to have received a Covid-19 vaccination, you probably have an immigrant entrepreneur to thank. Not only are Pfizer, BioNTech, and Moderna pioneers in the field of mRNA-based vaccine research; they were all founded or cofounded by immigrants.
Recent research explored a more hidden driver of immigrant entrepreneurship: personality-based self-selection. The decisions to emigrate voluntarily and to start a company are both associated with high levels of risk. Entrepreneurs of all types face the threat of business failure.
As a study of startups in several OECD countries showed, just above 60% survive past their third birthday, and only 40% make it past their seventh one. Immigrants, too encounter significant additional risks, from unemployment or underemployment to xenophobia and psychological trauma.
BusinessRecord.com reports, immigrants are still coming to the United States in search of the American Dream. And though there’s no shortage of ideas or drive to start new businesses, they do have to overcome a multitude of challenges that American-born entrepreneurs don’t face. A restrictive and limited visa process, cultural barriers, a complex, foreign legal system and too much self-reliance can often hinder their growth.
Despite the many hurdles they have to overcome, how have such a large number of immigrants been able to push forward and start something where others, who were born in the U.S. have not? What can we learn from them?
With so much at stake for the future of our country, what more can we do to help immigrant entrepreneurs achieve the American Dream of business ownership?
If entrepreneurship is truly the path to economic recovery as has been stated many times over the past few years, then doesn’t it make sense to do more to encourage entrepreneurship while also providing resources for ALL individuals and groups interested in pursuing entrepreneurial endeavors, and regardless of their backgrounds?
Well, one way is to develop programs like The Hispanic Entrepreneur Initiative. But there must be other initiatives. If you know of any, please let me know and I will do my part to promote them. In future editions of Acceler8Success Cafe, I will focus more on Immigrant Entrepreneurship – addressing both continuing challenges and solutions.
With my goal of helping as many people and groups as I can to achieve success as entrepreneurs, I firmly believe immigrants must not be left behind.
Have a great day. Make it happen. Make it count!