Immigrant-Founded Companies Generate $50-Plus Billion Annually - InformationWeek

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IT Leadership // IT Strategy
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Immigrant-Founded Companies Generate $50-Plus Billion Annually

Vendors founded by immigrants in the United States produced $52 billion in sales in 2005, the most recent year tallied, according to Duke University.

The contribution of skilled immigrant labor to the U.S. economy has been a topic of heated discussion for over a decade and a half. A just-published report by Duke University takes the debate further by asserting that all companies founded by immigrants between 1995 and 2005, produced $52 billion in sales and employed 450,000 workers in 2005.

These companies are primarily in the high-tech fields of bioscience, computers/communications, defense/aerospace, environmental, innovation/manufacturing-related services, semiconductors and software.

The study finds that the immigrant founders of such organizations come from 60 different countries. Of the 2,000 odd surveyed organizations that were established by foreign-born founders in the country between 1995 and 2005, 25.3% said that one of their key founders is an immigrant.

Among them India-born founders have founded more than 25% of engineering and technology companies. In fact, this figure is bigger than the combined percentage of migrants from the U.K., China, Taiwan and Japan. The percentage of immigrant founders from Germany, Korea, Israel, Canada and Iran are not more than five percent. This estimation shows the dominance of India-born founders on the U.S.’ engineering and tech world.

“The percentage of Indian-run companies in SiliconValley has continued to rise. From 1996 to 1998 they accounted for 10.9% of total Silicon Valley technology companies started since 1980; in 1999–2000 their share rose to 13.9% of total. In 2000 the absolute number of Indian-run companies was 1,283,” AnnaLee Saxenian, Professor, City and Regional Planning, University of California, and a co-author of the report, revealed to a Global Services editor in a conversation two years ago.

Indians have succeed in the U.S. for several reasons: First, Indian immigrants are extremely talented, having often graduated from India’s elite engineering universities; second, the Indian community has created social and institutional networks that increase the likelihood of success (mentoring, information sharing, angel investing, etc.); and finally, like other first-generation immigrants, Indians often work very hard, according to Saxenian.

According to the Duke University’s study, 34% of all engineering and technology companies established by foreign-born founders are located in California, followed by New Jersey with 7.3%, Florida with 6.7%, New York and Massachusetts with 5.2%, Virginia with 4.8% and Texas with 4.6%. California’s total population of Asian immigrant-founders constitutes Indians (20%), Taiwanese (13%), Chinese (10%) and others. Eighty one percent of Taiwanese and 49% of Chinese companies are located in the state. In New Jersey 14% of immigrant-founded organizations are established by Indians.

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