Focusing only on the number of legally incorporated businesses, a study by the Fiscal Policy Institute shows that the immigrant share of small business ownership in the U.S. has risen to 18 percent from 12 percent two decades ago. That translates into more than one in six small business owners in the U.S. being immigrants, according to the latest information gathered by the study—even as they make up just 13 percent of the overall population. (via CNBC, PDF)
- “It’s not that they are ‘super entrepreneurs’ or anything, but they do come here as risk takers as they pull up roots from their own country and look for a fresh start,” says David Dyssegaard Kallick, senior fellow at the Fiscal Policy Institute and main author of the report.
- With immigrant business ownership comes jobs and income. An estimated 4.7 million U.S. workers are employed by immigrant owned firms gathering some $776 billion in revenues, according to the most recent figures in the FPI report.
- Numbers show that the largest group of immigrant business owners are in the professional and business service sector (141,000), retail and construction (120,00 owners for each) followed by educational and social services and leisure and hospitality (each sector with 100,000).
- The specific types of businesses most owned by immigrants are restaurants, real estate firms, grocery stores and physician’s offices. The top countries of birth for immigrant business owners includes Mexico first, followed by India, South Korea, Cuba, China, Vietnam, Canada and Iran.
- And the gender gap is slightly better among immigrants with 29 percent of immigrant businesses owned by women compared to the average of 28 percent among U.S. born females.
- Why immigrants might be more inclined to own a business is often a matter of necessity, says Greg Fairchild, associate professor of Business Administration at the University of Virginia’s Darden School of Business.
Meanwhile, the overall number of small business created every year is in decline:
- America may be going out of business when it comes to starting new businesses, according to a recent report. The study—from the non-profit New America Foundation—argues the U.S. is seriously in danger of losing its entrepreneurial spirit because the number of small business created has been declining since the 1970s.
- “Most numbers collected on entrepreneurship haven’t reflected the increase in population,” says Lina Khan, co-author of the report and a policy analyst for the New America Foundation.
- “We see entrepreneurship declining per person and what figures there are may have over-counted the number of small businesses,” Khan says.
- What the report reveals is that—beyond the impact of the Great Recession—small businesses declined by 53 percent between 1977 and 2010. Meanwhile, the reports says, the share of self-employed Americans has been declining since 1991—dropping more than 20 percent by 2010.