Decline in immigrant entrepreneurship damaging to U.S. economic growth

On Behalf of | Oct 8, 2012 | Employment Immigration |

A decline in immigrant entrepreneurship in the United States is threatening to slow economic recovery and long-term growth. According to reports, the proportion of new companies founded by foreigners has declined. Where previous decades showed a boom in immigrant entrepreneurship, the current statistics show that the trends are changing, posing a threat to U.S. competitiveness in the world economy.

Immigrant-led entrepreneurship characterized the 1980’s and 1990’s, providing a wealth of business opportunities and employment. In Silicon Valley, the nation’s leading start-up community, the number of new firms with at least one immigrant founder has dropped from 52.4 in 2005 to 43.9 percent. Experts in business immigration believe that the overall trend could signal a change for the U.S. industry.

Young businesses represent the most consistent source of job creation. Historically, foreign-born entrepreneurs have been the harbingers of many business opportunities in the state. Research shows that nearly half of top-venture backed, early stage companies were founded by at least one immigrant. 74 percent of fast-growing start-ups have immigrants in upper management positions.

Immigration laws are making it more difficult to start enterprises in the United States causing a “reverse brain drain,” according to researchers. Many foreign-born students who earn advanced degrees in the U.S. are forced to return home and compete with American companies. Academic leaders believe that the current immigration system is posing a threat to “America’s preeminence as a global center of innovation and prosperity.”

Congress, academics, and business leaders are reevaluating the current immigration system to improve conditions for immigrant workers, specifically those delivering investments and innovation in start-ups. Without a change, there is a fear that new companies will be starting in other countries creating a fiercer competition in the world marketing and threatening the status quo of American business.

Source: The Washington Post, “Decline in immigrant entrepreneurship threatens U.S. competitiveness,” J.D. Harrison, Oct. 2, 2012


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