Immigrant entrepreneurs play a substantial role in U.S. business ownership, from solo businesses and food services to high-tech employer firms. The available measures show both scale and distinct patterns in education, innovation, industry presence, and ownership growth.
Contents
- Scale of immigrant business ownership
- Where immigrant-owned businesses are concentrated
- Demographic profile of high-tech owners
- Education and startup capital
- Motivations and firm age
- Innovation, research, and intellectual property
- Employer ownership and representation
Scale of immigrant business ownership
The Small Business Administration’s Small Business Facts: An Overview of Immigrant Business Ownership provides a broad 2018 snapshot. Foreign-born owners accounted for 18.00% of U.S. owners of firms with employees: 740,768 foreign-born owners compared with 3,374,014 U.S.-born owners. Among firms without employees, the immigrant share was higher. Foreign-born owners accounted for 22.82%, or 6,518,000 owners, compared with 22,040,000 U.S.-born owners.
These figures describe different parts of the business population. Employer firms have employees, while nonemployer firms do not, so the two percentages should not be treated as interchangeable measures of entrepreneurship. Together, however, they show that immigrant ownership was visible in both employer and solo-business segments in 2018. Small Business Facts: An Overview of Immigrant Business Ownership
For context, foreign-born workers numbered 27,243,610 in 2018, representing 17.36% of the U.S. worker population. The corresponding number of U.S.-born workers was 129,708,253. Comparing the worker share with the ownership measures can help readers distinguish the size of the foreign-born workforce from the share of business owners who were foreign-born.
| 2018 measure | Foreign-born | U.S.-born | Immigrant share |
|---|---|---|---|
| Owners of firms with employees | 740,768 | 3,374,014 | 18.00% |
| Owners of firms without employees | 6,518,000 | 22,040,000 | 22.82% |
| Workers | 27,243,610 | 129,708,253 | 17.36% |
The ownership numbers are counts of owners, not a count of every business location or a measure of revenue. They should therefore be read as indicators of participation in business ownership rather than as a ranking of economic output.
Where immigrant-owned businesses are concentrated
Industry-specific measures show especially strong immigrant participation in two sectors covered by the 2018 SBA overview. Immigrant owners represented 36.8% of U.S. accommodation and food-services businesses, equal to 136,106 businesses. In transportation and warehousing nonemployer businesses, immigrant owners represented 46.2%, or about 1.2 million businesses.
The transportation and warehousing figure is explicitly for nonemployer businesses, while the accommodation and food-services figure is presented as a business share in the SBA source. Those scope differences matter when comparing the two statistics. The figures do not establish that immigrant owners were concentrated in every industry, but they do identify substantial presence in food services and transportation-related businesses.
The available sector statistics also illustrate why a single national ownership percentage can hide important variation. The 18.00% immigrant share among owners of firms with employees is a broad U.S. measure. The 36.8% accommodation and food-services share and 46.2% transportation and warehousing nonemployer share describe specific industries and, in the latter case, a specific employer-status category.
Demographic profile of high-tech owners
The Census working paper Immigrant Entrepreneurs and Innovation in the U.S. High Tech Sector uses a 2014 Annual Survey of Entrepreneurs high-tech employer-firm sample. In that sample, immigrants made up 19.79% of owners. This is a high-tech sample, not an estimate of all U.S. entrepreneurs.
The racial and ethnic profile of immigrant high-tech owners differed from that of native high-tech owners. Hispanic owners represented 6.81% of immigrant high-tech owners, compared with 2.79% of native owners. Non-Hispanic White owners represented 33.58% of immigrant high-tech owners, compared with 92.14% of native owners.
Asian Indian owners represented 36.46% of immigrant high-tech owners, compared with 0.89% of native owners. Chinese owners represented 10.38% of immigrant high-tech owners, compared with 0.83% of native owners. Other Asian owners represented 9.52% of immigrant high-tech owners, compared with 1.14% of native owners. Other non-Hispanic minority owners represented 3.25% of immigrant high-tech owners and 2.20% of native owners.
These percentages describe the composition of the study’s high-tech owner groups. They should not be generalized to all immigrant-owned firms, all technology workers, or the entire U.S. population. Immigrant Entrepreneurs and Innovation in the U.S. High Tech Sector
Education and startup capital
Educational attainment was another clear difference in the 2014 high-tech sample. Less than a bachelor’s degree was reported by 9.55% of immigrant high-tech owners, compared with 27.21% of native owners. A bachelor’s degree was reported by 37.20% of immigrant owners and 45.11% of native owners. A graduate degree was reported by 53.24% of immigrant owners, compared with 27.68% of native owners.
The startup-capital categories show a distribution across both smaller and larger reported amounts. No startup capital was needed by 9.27% of immigrant high-tech owners, compared with 11.09% of native owners. Startup capital under $5,000 was reported by 31.05% of immigrant owners and 25.19% of native owners. The $5,000–$10,000 category included 12.80% of immigrant owners and 11.22% of native owners, while $10,000–$25,000 included 14.98% and 13.83%, respectively.
At the higher end, startup capital of $250,000–$1 million was reported by 3.85% of immigrant high-tech owners, compared with 3.42% of native owners. The $1 million–$3 million category included 1.54% of immigrant owners and 1.08% of native owners. Startup capital of $3 million or more was reported by 0.72% of immigrant owners, compared with 0.45% of native owners.
| High-tech owner measure | Immigrant owners | Native owners |
|---|---|---|
| Less than bachelor’s degree | 9.55% | 27.21% |
| Bachelor’s degree | 37.20% | 45.11% |
| Graduate degree | 53.24% | 27.68% |
| No startup capital needed | 9.27% | 11.09% |
| Startup capital under $5,000 | 31.05% | 25.19% |
| Startup capital of $3 million or more | 0.72% | 0.45% |
The capital figures are reported categories from the 2014 high-tech sample. They do not provide a median startup cost or show whether capital came from savings, loans, investors, grants, or another source.
Motivations and firm age
The study measured motivations on a 0-to-2 importance scale. Inability to find a job averaged 0.14 for immigrant owners versus 0.09 for native owners. Being one’s own boss averaged 1.35 for immigrant owners and 1.50 for native owners. Working for oneself averaged 0.79 and 0.92, respectively.
Some motivations were similar, while others moved in opposite directions. “Always wanted to own a business” averaged 1.32 for immigrant owners, compared with 1.14 for native owners. Having an entrepreneurial role model averaged 0.63 for immigrant owners and 0.62 for native owners. Flexible hours averaged 1.21 and 1.27, respectively. Balancing work and family averaged 1.28 for both groups.
Firm age also differed in the sample. Firms aged five years or less accounted for 50.50% of immigrant-owned high-tech firms, compared with 36.99% of native-owned high-tech firms. Firms older than five years accounted for 49.50% of immigrant-owned firms and 63.01% of native-owned firms. These measures describe the age distribution of firms in the sample, not survival rates or the probability that a new firm will remain open.
Innovation, research, and intellectual property
For the 2012–2014 innovation period, at least one product or process innovation was reported by 72.01% of immigrant-owned high-tech firms, compared with 68.74% of native-owned firms. Immigrant-owned firms averaged 3.89 innovation types, compared with 3.50 among native-owned firms. Product innovation was reported by 60.55% of immigrant-owned firms and 56.00% of native-owned firms. Process innovation was reported by 61.61% and 59.98%, respectively.
The 2014 research measures also show higher reported activity among immigrant-owned high-tech firms. Any research and development activity was reported by 28.02% of immigrant-owned firms, compared with 21.90% of native-owned firms. Work that might lead to a patent was reported by 16.98% and 12.52%, while developing and testing prototypes was reported by 17.18% and 12.34%.
Applying scientific or technical knowledge in a new way was reported by 15.26% of immigrant-owned firms, compared with 10.14% of native-owned firms. Producing findings suitable for publication was reported by 12.55% and 8.97%. Creating generalizable scientific research or technical solutions was reported by 15.73% and 10.26%. Work to discover previously unknown scientific facts was reported by 9.27% and 5.22%, while work to extend understanding of scientific facts was reported by 14.37% and 9.56%.
Intellectual-property results were more mixed. Copyright or trademark ownership was reported by 16.79% of immigrant-owned high-tech firms, compared with 20.83% of native-owned firms. A granted or pending patent was reported by 8.50% of immigrant-owned firms and 6.13% of native-owned firms. The study reported that immigrant-owned firms had higher rates on 15 of its 16 innovation measures; copyright or trademark ownership was the exception. These are study results for the stated innovation and 2014 measurement periods, not a current forecast. Immigrant Entrepreneurs and Innovation in the U.S. High Tech Sector
Employer ownership and representation
The SBA’s An Analysis of Immigrant Employer Ownership reports a longer-term change from 2012 through 2020. Immigrant employer ownership increased from 15.08% in 2012 to 19.03% in 2020. Over the same period, the foreign-born share of private-sector workers increased from 7.29% to 8.60%.
The 2020 measures also provide demographic detail among employer owners. Black immigrant employer owners represented 2.9% of immigrant employer owners, compared with 1.7% among Black U.S.-born employer owners. Hispanic immigrant employer owners represented 18.4% of immigrant employer owners, compared with 3.8% among Hispanic U.S.-born employer owners. Asian immigrant owners represented 46.0% of immigrant-owned employer businesses.
Women represented 33.3% of immigrant employer owners in 2020, compared with 31.0% of U.S.-born employer owners. The comparison is specifically about employer ownership, so it should not be combined with the nonemployer ownership measures from 2018 without preserving that distinction. An Analysis of Immigrant Employer Ownership