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HUMAN RESOURCES

Immigrant Startups Continue to Grow

A national study shows immigrants are launching businesses at a faster pace than native-born entrepreneurs.
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As Congress takes up a controversial immigration reform bill this week, a national study released Wednesday shows that immigrants continue to outpace native-born U.S. entrepreneurs when it comes to starting businesses.

Last year, the rate of business startups by immigrants  increased to 0.37 percent, or 370 out of every 100,000 adults, up from 0.35 percent in 2005, according to an annual index of entrepreneurial activity by the Ewing Marion Kauffman foundation, a Kansas City-based advocacy group. By contrast, native-born entrepreneurs launched businesses at a rate of 0.29 percent in 2006.

Overall, the number of business startups has remained steady over the past decade, with an average 465,000 people launching new businesses every month. The rate of business startups among men was unchanged at 0.35 percent from the previous year, following a downward trend that began in 2003, while the rate for women slipped from 0.24 percent to 0.23 percent.

Entrepreneurial activity among African Americans also fell, from 0.24 percent to 0.22 percent, while the rate among Asian and Latinos picked up, the study found.

Carl Schramm, the group's president and CEO, said the growing portion of entrepreneurial firms, along with the high number of jobs created by new businesses, were indications that the entrepreneurial sector is becoming an increasingly important factor for the nation's economic growth.

By region, business startup rates in the Midwest slipped below those in the Northeast for the first time in over a decade, the study found. The five states with the highest rates were Montana, Mississippi, Georgia, Oklahoma, and Maine, while the lowest rates were in Michigan, Pennsylvania, South Carolina, Illinois, and Delaware.

Among all major industries, construction and the service industries had the highest number of business startups.

Earlier this year, the annual quota of H-1B visas -- the visa class most closely associated with entrepreneurial immigrants  holding advanced degrees, particularly in the high-tech sector -- was filled in a single day.

A Senate bill currently under debate would create a new temporary work visa for immigrants, along with a path for undocumented workers to attain legal status. It would also increase border security and require employers to verify the status of their employees.

Last updated: May 23, 2007




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