Law Office of Bonnie Stern Wasser
—Bringing People Together—
Immigrant Entrepreneurs Create Jobs, Study Finds
By Bonnie Stern Wasser, Esq.
© 2007
The following is intended as general information and not legal advice. It is not meant to establish an attorney/client relationship.
A new study of 2,050 technology engineering companies by researchers at Duke University found that up to 52 percent of new start up tech companies created between 1995 and 2005 in some states were formed by immigrant entrepreneurs, primarily from India (26 percent), as well as from the UK, China, Taiwan, and Canada. Nationally, over the 10-year period that was studied by Duke researchers, immigrant entrepreneurs founded 25.3 percent of new US engineering and technology companies, primarily in the fields of software and innovation/manufacturing-related services, semiconductor, computers, and communication. The study debunks the myth that immigrants take jobs away from US workers.
Moreover, the $52 billion in sales revenues in 2005 generated by US companies resulted in substantial tax revenues to local, state and federal governments, and the creation of 450,000 jobs as of 2005. Employees hired by immigrant entrepreneurs earned incomes that they in turn spent in taxes and in purchasing goods, services and real estate in their local economies. One in four new start-ups between 1995 and 2005 had immigrant founders, CEOs or other senior executives or had immigrants as the lead technologist. In addition, non-US citizen immigrant entrepreneurs and high tech staff were responsible for a 24% increase in new patent filings since 1998, as listed in the World Intellectual Property Organization Patent Cooperation Treaty database for international patent applications filed in the US, thus contributing substantially to our country’s global competitiveness. Most of these patent filings were by Chinese immigrants, followed by Indians, Canadians and British nationals. The majority of patent filings by immigrants were theoretical, computational and practical patents such as chemistry, human necessities and electricity.
In 1999, a UC Berkley study by Anna Lee Saxenian estimated that immigrants, mostly from China and India, created 25 percent of Silicon Valley start-ups. The more recent Duke University study shows that figure to be 52 percent as of 2005. While the researchers also studied Silicon Valley and Research Triangle Park in North Carolina specifically to gage the impact of immigrants on regional technology centers, their research shows that immigrant-founded businesses are located all across the country, though in uneven numbers.
The statistics point to two ramifications. First, foreign-born engineers have a major impact on starting businesses generally, in part due to collaboration among colleagues from their home country, knowledge of local and global markets, and service as role models and mentors to arriving immigrants. In addition, the study suggests the need to improve pre-college science and technology preparation in US schools in order to promote US global competitiveness, or risk losing these key entrepreneurs, employees and their intellectual property rights to repatriation abroad.
Two articles that discuss the study were reported in the Seattle Times and the Washington Post on January 4, 2007. They can be found at http://www.washingtonpost.com and http://seattletimes.nwsource.com. The Duke study, called "America's New Immigrant Entrepreneurs", can be found at http://www.dukenews.duke.edu/2007/01/engineerstudy.html.
For more information about immigration legal services, contact Bonnie Stern Wasser at (206) 282-2279 or bonnie@bswasserlaw.com.
