Immigrant-Owned Businesses Provide Important Contribution to U.S. Economy

 Immigrants are 30 percent more likely to start businesses than non-immigrants

Washington, D.C. –The Minority Business Development Agency (MBDA) and the Small Business Administration (SBA) recently released a report, “Estimating the Contribution of Immigrant Business Owners to the U.S. Economy” by Robert W. Fairlie, PhD, professor of economics at the University of California Santa Cruz. The study, funded by SBA’s Office of Advocacy, finds that immigrants are nearly 30 percent more likely to start a business than non-immigrants, representing 16.7 percent of all new business owners in the United States.

There are approximately 1.5 million immigrant business owners in the United States, representing 12.5 percent of all business owners.  Immigrant business ownership is geographically concentrated in a few states, such as California, New York, New Jersey, Florida and Hawaii.  Nearly 30 percent of all business owners in California are immigrants.  One quarter of all business owners in New York are foreign-born and one-fifth of all business owners are foreign-born in New Jersey, Florida and Hawaii. 

“U.S. Census figures predict that by 2050, the United States will be a majority-minority country.  This growth will be fueled by immigrants-specifically people of color,” says Ronald N. Langston, National Director, MBDA.  “Some fear this change and others complain about the burden and cost of immigration,” he adds. “But, this report illustrates the positive rewards of embracing inclusion, diversity and minority entrepreneurship.”

“This report is the first time that immigrant business ownership rates and immigrant-owned businesses contributions to the economy have been studied in detail,” said Dr. Chad Moutray, Chief Economist for the Office of Advocacy.  “These findings can make a significant contribution to public policy debates,” he added.

Although Mexican immigrants make up the largest percentage of immigrant business owners, the top five countries of origin also include Korea, India, China and Vietnam.  Immigrants also own businesses that range from low-skill businesses such as retail and wholesale trade to high-skill jobs like technology and engineering.  In fact, approximately 25 percent of engineering and technology jobs started in the past decade were founded by immigrants.  These specific firms had more than $52 billion in sales and hired 450,000 workers, according to the report.