For almost two decades, immigrant-founded start-up companies — especially high-tech firms in Silicon Valley — have represented slightly more than a quarter of all such entrepreneurships in the United States and have been an important source of economic growth in our country. However, a new study from the Kauffman Foundation reports that immigrant-founded companies nationwide have slipped for the first time in decades, and its authors believe that the United States’ unwelcoming immigration system has created a “reverse brain drain.”
The report, The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent, evaluated the rate of immigrant entrepreneurship from 2006 to 2012 and updated findings from the period between 1995 and 2005. Immigrant founders, who are most likely to start companies in the innovation/manufacturing-related services (45 percent) and software (22 percent) industries, employed about 560,000 workers and generated an estimated $63 billion in sales from 2006 to 2012, underscoring the continuing importance of high-skilled immigrants to U.S. The report provides detailed statistical data on immigrant start-ups by region, nationality, and sector.
While the downward trend is still slight nationwide, the report confirms that the U.S. must embrace immigrant entrepreneurs to maintain a dynamic economy:
“The U.S. risks losing a key growth engine just when the economy needs job creators more than ever.” Yet, “[t]he U.S. can reverse these trends with changes in policies and opportunities, if it acts swiftly. It is imperative that we create a startup visa for these entrepreneurs and expand the number of green cards for skilled foreigners to work in these startups. Many immigrants would gladly remain in the United States to start and grow companies that will lead to jobs.”
We couldn’t agree more.