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Immigrants Driving Startup Growth

A study shows more businesses were launched last year, though fewer by women.
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Immigrants continue to launch U.S. ventures at a faster rate than native-born Americans, while the number of startups led by women is declining, according to a new study by the Ewing Marion Kauffman Foundation, a Kansas City, Mo.-based entrepreneurship advocacy group.

Last year, an average of 495,000 businesses were launched in the United States every month, a slight increase from 2006, the study shows. While more men started businesses in 2007, the number started by women declined from 0.23 percent to 0.2 percent.

"That change was more than a blip," said Robert Litan, the group's vice president of research and policy. "It could be that male entrepreneurship could be a reaction to the recession, and since there are more men than women in the labor force, more men are hit by layoffs and they're forming businesses," Litan said, adding it would take several more months to see a clearer trend emerge.

Meanwhile, immigrants continued to outpace native-born Americans in startup activity. Nearly half a percent of all immigrants started businesses in 2007, the study found.

Immigrants often gravitate to entrepreneurial ventures as a result of weaker language skills and social connections, making more traditional jobs harder to secure, Litan said.

"Entrepreneurship represents a way to crack the American economy in a way that the job market often does not," he said.

Last updated: Apr 25, 2008




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