The United States has a historical reputation for being a place where anyone can make something of themselves—no matter where they come from. According to a 2007 study by the Kauffman Foundation, that reputation seems largely accurate.
Twenty-five percent of engineering and technology companies founded in the United States between 1995 and 2005 were started by immigrant entrepreneurs. In 2005, these companies garnered $52 billion in sales and employed 450,000 people nationwide.
"It has to do with the caliber of people who make it over here," says Vivek Wadhwa, author of the study as well as a Duke University professor and fellow at Harvard Law. "By leaving Europe, India, or Asia, they're taking a risk. And these founders tend to be very highly educated, with master's degrees and PhDs. In other words, they're at the top of the education ladder and they have nothing to lose."
Of the nineteen states with high enough sampling density to report confident results, California lead the way in number of immigrant entrepreneurs in the technology industry; 38.8 percent of its companies were founded by immigrants. New Jersey followed closely with 37.6 percent, along with Michigan with 32.8 percent. In last place was Washington State with 11.3 percent and North Carolina with 13.9 percent. The national average was just over 25 percent.
To Wadhwa, California's results were not surprising. "When you're coming from all the way overseas, it doesn't really matter where in the United States you land. So you might as well start in California, which is the place to start a tech company," he says.
As for the recession, Wadhwa advises entrepreneurs not to worry; he's confident the downturn will accelerate all independent business. "If you can't find a job, you start a company. Recessions always provide the next generation of start-ups, which tend to be successful as soon as the recession is over."