The Driving Factors Of Immigrant Entrepreneurship

Bygrave, W.D. & Zacharakis, A. (2014). Entrepreneurship, 3rd ed. Hoboken, NJ: John Wiley & Sons, Inc. ISBN: 978-1-118-58289-3

In the Immigrant and Minority Entrepreneurship book, the concept of “economic detour” is first introduced on page 20 in the text. The concept is initially introduced to try and explain the reasoning of why black entrepreneurship is lower than those of other groups. Additionally, there were different reasons that contributed to the low involvement within black entrepreneurship. Some of the limiting opportunities included violence, racial exclusion and the Jim Crow laws. Butler describes in the book that “no other minorities have had to go it alone” like the African Americans have had to (Butler, 20). Ultimately, there are many examples of how African Americans have faced this concept of economic detour and how their opportunities were limited

In recent years, debates regarding policy have focused heavily on the topic of immigration in the United States. Despite all of the attention that this topic has gained, it seems that skilled immigrants is one group that has been overlooked. In large part, this particular group is becoming more prominent due to the fact that many are becoming entrepreneurs, especially in the Silicon Valley. Thus, I am interested in finding out how skilled immigrant entrepreneurs are beneficial in numerous aspects such as economic growth, innovation, public policy and societal changes. Moreover, I want to explore what challenges and opportunities these immigrants face and how their involvement within Silicon Valley provide a beneficial influence for growth. One primary source of my research will be the documentary film Starting-Up in America by Tarik Ansari. A very interesting fact quoted in the documentary stated by Vivek Wadhwa, colleague of the Stanford Law School, “Despite the fact that they constitute only 12% of the U.S. population, immigrants have started 52% of Silicon Valley’s technology companies and contributed to more than 25% of our global patents”. Starting-Up in America focuses on the challenges experienced by Silicon Valley’s skilled immigrant entrepreneurs with U.S. Immigration. The documentary interviews a handful of successful immigrant entrepreneurs asking questions such as: “Why come to the United States to start a business”, “How does your project benefit the U.S.

Many of the immigrants that started a business were struggling and didn’t own a home. Many times their businesses failed and they lived in poverty for a very long time. Although other times their luck changed for the better and they became very successful. Even though they may now live in a mansion and play golf all day, when they were still building up their business they might have not even owned a home at all. More nonimmigrants owned a home than immigrants. In fact about 47.9% of entrepreneurial immigrants didn’t own a home while only 29.2% of nonimmigrants didn’t own one (Fairlie, Robert. SBA.gov, May 2012). Not owning a home could be a big challenge when starting a business because if you don’t own a home it would be a challenge to pay off your bills for rent, having enough money to keep your business running, as well as being able to manage your company. While it could be even worse for the nonimmigrant entrepreneurs, more nonimmigrant entrepreneurs had homes than immigrant entrepreneurs. Even if the nonimmigrant entrepreneur was unlucky and were struggling to pay rent, because they were born here they could rely on their parents, friends, or relatives for help while the immigrant would be less likely to have parents, friends, or relatives to rely on because their family and friends would live in another country. If an immigrants business failed it would affect you more because if you couldn’t pay your rent

Wang and Liu (2015) indicated that small businesses contribute to the economy as they significantly promote US export, which had encouraged a close examination of immigrant-owned business in the current global context. Nel and Abdullah (2017) in their study stated that immigrant-owned business activities are a source of generating employment and an impetus for economic growth (Nel & Abdullah, 2017). Research shows that business ownership provides economic progress for immigrants (Wang & Liu, 2015). Rocha et al. (2015) found that most immigrants in the United States turn to small business ownership to provide for their

The concept of the entrepreneurship was mentioned in the book of Essai sur la Nature du Commerce en Général (around in 1730) which is undoubtedly one of the greatest books ever written respecting the socio-economic theories

Another report suggests that immigrants, in fact, create new jobs (Farlie, 2012). The study utilizes data from the U.S. Census Bureau (2007) to highlight that the ‘business ownership rate is higher for immigrants than non-immigrants -- 10.5 percent of the immigrant workforce owns a business compared with 9.3 percent of the non-immigrant (i.e. U.S.-born) workforce’ and that ‘immigrant-owned businesses are slightly more likely to hire employees than are non-immigrant-owned businesses, [although] they tend to hire fewer employees on average.’ The findings go further to establish the generally positive effects entrepreneurial immigrants have on the labour market and economy as a

Immigrant entrepreneurs’ contribution to sustainable economic growth and employment creation has increased over the past decade in Germany. In 2015, more than 40% of newly registered businesses in Germany were founded by people with migrant background, and about one-fifth of those engaged in entrepreneurial activity were born abroad. And these goes beyond traditional ethnic businesses to wider range of innovative sectors. The federal government has been supporting these foreigners with eased entrance conditions to start businesses in Germany, and is constantly enhancing its efforts to looking for more ways to attract highly skilled immigrants.

Chotigeat, T., Balsemeier, P. W., & Stanley, T. O. (1991). FUELING ASIAN IMMIGRANTS' ENTREPRENEURSHIP: A SOURCE OF CAPITAL. Journal Of Small Business Management, 29(3), 50-61.

Even though some immigrants come into the U.S and go into the field of entrepreneurship by either starting from scratch or having the requirements needed, it’s harder for most immigrants to find employment with well-paying jobs because not all have a safe place to go home to and not every immigrant comes into the U.S breaking the language barrier.

Despite earlier reasons for assuming that immigrants are more entrepreneurial than non-immigrants, empirical evidence does not support this premise (Turkina and Thai, 2013). An OECD study found that immigrant entrepreneurs – as measured by the rate of sole proprietorship – is more prevalent than non-immigrant entrepreneurship in only 15 countries out of 26 OECD countries (OECD, 2015). This suggests that in approximately half of the OECD countries, immigrants are not likely than non-immigrants to engage in sole proprietorship. In addition, in countries with large percentages of immigrants such as Germany, Italy and Sweden, immigrants are less likely than non-immigrants to engage in sole businesses (OECD, 2015). Interestingly, Linden et al. (2017) notes that immigrants living in Germany perceived themselves as having limited skills to operate businesses and were more risk averse than non-immigrants.

The cycle of poverty is an issue that is particularly prevalent in cities where the income gap between the wealthy and the poor is especially drastic. One solution to this cycle is to increase wealth in poor communities, which correlates with producing wealth in communities of color. One way to increase wealth is to target young, minority entrepreneurs. The purpose of this paper is to not only review the factors that hinder the success of minority entrepreneurs, but also to encourage more research regarding the topic. This paper will explore the four main factors that affect minority entrepreneurs: entrepreneurial experience, entrepreneurial activity, business incubation, and leadership capabilities.

In the US, immigrants have excelled in entrepreneurship more than native-born Americans. In an article discussing the most successful businessmen and women, Bluestein state, “immigrants are 30 percent more likely to start a business in the United States than non-immigrants.” These people are more willing to take the risk of creating a business as most newly arrived foreigners have nothing else to live off of and make money. Take Derek Cha, for example, a wealthy businessman from South Korea: “at 49, Cha is the owner of the 350-store chain of SweetFrog frozen-yogurt shops, which has more than $34 million in annual revenue. He employs about 800 part- and full-time workers in the 70-some locations he operates himself.” Cha is a

Immigrant entrepreneurship is a relatively new phenomenon that explores the setting up and managing of business by immigrants in their adoptive countries. Brush et al. (2010) note that immigrant entrepreneurship has become a type of growth sector because both the host and ethnic countries benefits from it. The driving factors of immigrant entrepreneurship are distinct from other forms of entrepreneurship because they accrue from necessity, and the need to survive in dismal employment situations. Bandyopadhyay et al. (2017) posits that immigrants are drawn to specific countries – mostly the Organization for Economic Co-operation and Development (OECD) countries – due to the push factors such as unemployment and lack of amenities in the home country and pull factors such as potential for employment and better service provision in the host country. However, these expectations may not always be met compelling the immigrant to look for other sources of income through entrepreneurship. Australia’s “Australian’s First” policy for job employment provides an apt example of natives receiving first priority in job selections (Karp, 2017). Hence, with economic insecurity and lack of employment opportunities, immigrants are forced to seek alternative income means such as self-employment. Zimmerman (2016) considers immigrant risk taking in unfamiliar territories with minimum resources as fulfilling the entrepreneurial characteristics. The difference, however, is that

Entrepreneurship has been a topical issue in business administration literature and mostly the wave on interest is on the role of entrepreneurship in economic growth literature. This paper