Immigrants Fueling American Entrepreneurial Successes

The Western world is having economic problems due to population shrinkage.  Because native populations in Japan and some Western European countries have declined, economic growth has been constrained.

The United States is losing “native” population as well, but thanks to immigration, the U.S. is gaining in numbers.  More importantly, it is immigration that is fueling American entrepreneurial successes.

In a Harvard Business School Working Paper (June 2016) entitled “Immigrant Entrepreneurship,” authors Sari Pekkala Kerr, a senior research associate at Wellesley College, and William Kerr, a Harvard Business School professor, wrote: “Many policy makers believe that immigrant founders are an important and under-utilized lever for the revival of U.S. job growth and continued recovery from the Great Recession.”

They observe that “It is likely true that more than half of the entrepreneurs in Silicon Valley are of immigrant origin…”

Forbes Magazine, Sept. 5, 2015, reports: “Tesla’s Elon Musk, WhatsApp’s Jan Koum and Goggle’s Sergey Brin are prominent immigrant entrepreneurs and while they are exceptional, their path is not.  A study by Partnership for a New American Economy found that 18% of America’s largest companies were started by immigrants.  A further 22% were founded by children of immigrants.”

Forbes writes “these statistics are startling…It means that you are much more likely to be a successful entrepreneur if you were born abroad.”

Forbes offers a case study based on the story of Nigerian Jason Njoku, who came to the U.K. to study.  He noted that his mother had difficulty watching Nigerian movies on her TV because she couldn’t access the movies. Njoku flew back to Lagos and his first step was to create a successful YouTube channel.  Gaining media coverage, Njoku got $8 million in U.S. venture capital to start his own website, iROKOtv. Today, Njoku has the reputation of a pioneer in African tech startups.  His target market is the 5 million people in the Nigerian diaspora.

In “Immigration and Entrepreneurship” in the New York Times (July 1, 2013), author Catherine Rampell writes: “One of the key economic arguments underpinning the immigration overhaul is that immigrants create jobs — not only because they spend money, but because they tend to be unusually entrepreneurial and innovative and so create job opportunities for the people around them.”

Harvard Business School Prof. Shane Greenstein, in a December 21, 2015, article in Harvard’s “Working Knowledge” (‘Without Immigrants, We Wouldn’t Have Google’) explains why immigrants are so successful. “Outsiders keep our commercial markets vital by offering perspectives that differ from the prevailing view, introducing new business practices, and conceiving of new modes of specialization.”