Then and Now: America’s New Immigrant Entrepreneurs, Part VII

As per the Kauffman foundation report released today, 

Summary of the key findings about engineering and technology companies founded in the United States between 2006 and 2012:

  • 24.3 percent of these companies had at least one key founder who was foreign-born. In Silicon Valley, this number was 43.9 percent.
  • Nationwide, these companies employed roughly 560,000 workers and generated $63 billion in sales in 2012.
  • Of the total of immigrant-founded companies, 33.2 percent had Indian founders, up about 7 percent from 2005. Indians have founded more such companies than immigrants born in the next top seven immigrant-founder-sending countries combined.
  • The top ten sending countries of immigrant entrepreneurs in descending order were India (33.2 percent), China (8.1 percent), the United Kingdom (6.3 percent), Canada (4.2 percent), Germany (3.9 percent), Israel (3.5 percent), Russia (2.4 percent), Korea (2.2 percent), Australia (2.0 percent), and the Netherlands (2.0 percent).
  • The 458 immigrant-founded companies sampled collectively created a total of 9,682 jobs. They
  • employed an average of 21.37 workers. 
  • While the mix of immigrants varies by state, Indians tend to dominate the immigrant-founding groups of the top six states with the greatest representation of immigrant founders.
  • The states with the highest concentration of immigrant-founded companies were California (31 percent),  Massachusetts (9 percent), Texas (6 percent), Florida (6 percent), New York (5 percent), New Jersey (5 percent).
  • Some immigrant groups showed a greater tendency to start companies in particular states. Of Indian-founded companies, 26 percent were founded in California and 8 percent in Massachusetts. Of Chinese-founded companies, 40 percent were founded in California and 16 percent in Maryland. While immigrant groups tended to concentrate the most in California, German immigrants demonstrated a preference for starting businesses in Ohio (22 percent), followed by California (17 percent).
  • Across engineering and technology fields, immigrant entrepreneurs displayed the greatest concentration in the innovation/manufacturing related services (45 percent) and software (22 percent) fields.

This study demonstrates that the rate of immigrant entrepreneurship nationwide has plateaued. Silicon Valley remains the rubric against which national trends in the technology sectors are measured. That the proportion of immigrant founders in the Silicon Valley has declined since 2005 should raise questions about the United States’ future ability to remain economically competitive in the international market.

This report/working paper also presents some of the deep insights about concentration zones of immigrant startups based their origins.