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Kauffman Research: Study of U.S. Metros With Most High-Tech Immigrant Entrepreneurs Provide Lessons for Other Regions

The Ewing Marion Kauffman Foundation recently released a research report entitled “Lessons for U.S. Metro Areas: Characteristics and Clustering of High-Tech Immigrant Entrepreneurs“. The study shows that immigrant-owned businesses are more likely to locate in ethnically diverse metro areas that have high foreign-born populations. That’s important for metro areas hoping to attract and retain this fast-growing pool of high-impact founders.

The study shows that immigrants comprised 20 percent of the high-tech work force and 17.3 percent of high-tech entrepreneurs between 2007 and 2011, according to the study, which used the American Community Survey. This represents an increase of 13.7 percent and 13.5 percent, respectively, from 2000.

In addition, this study further addresses geographic factors that correlate with the concentration of high-skill immigrant entrepreneurs across metropolitan areas, providing policy implications for local and state strategies to promote an immigrant-friendly environment. There are seven key findings listed below.

Findings:

Key Finding 1

Key Finding 1

Among the top ten countries from which immigrants in high-tech industries have arrived to the United States, there is a significant variation in rate of self-employment and its growth over time. In period 2007–2011, the national rate of self-employment in high-tech industries is 6.2 percent. The rate is around 2 percent to 3 percent for immigrants from Vietnam, Mexico, and Philippines, and 9 percent to 10 percent for immigrants from England, Iran, and Canada.

Key Finding 2

Key Finding 2

Among the top ten countries from which immigrants in high-tech industries have arrived to the United States, there is a significant variation in rate of self-employment and its growth over time. In period 2007–2011, the national rate of self-employment in high-tech industries is 6.2 percent. The rate is around 2 percent to 3 percent for immigrants from Vietnam, Mexico, and Philippines, and 9 percent to10 percent for immigrants from England, Iran, and Canada.

Key Finding 3

Key Finding 3

Compared to their U.S.-born counterparts, who are more evenly distributed across all the high-tech sectors, immigrant owned high-tech businesses are more concentrated in a limited number of industries, such as semiconductors, other electronic component, magnetic, and optical media, communications, audio/video equipment, and computer science-related sectors.

Key Finding 4

Key Finding 4

Spatially, immigrant high-tech entrepreneurs are concentrated in a smaller number of metropolitan areas, with 80 percent of them concentrated in the largest twenty-five metropolitan areas, in contrast to 57 percent of their U.S.-born counterparts.

Key Finding 5

Key Finding 5

Across different groups, immigrant high-tech entrepreneurs demonstrate the highest concentration, surpassing all high-tech workers and all workers. At the same time, the evidence suggests that concentration fell from 2000–2011, which is consistent with growing literature that documents immigrants’ dispersing settlement patterns.

Key Finding 6

Key Finding 6

Both immigrant and U.S.-born high-tech businesses are more likely to locate within regional labor markets that have an overall higher percentage of high-tech industries and higher innovation capacity. At the same time, metropolitan areas with higher percentages of construction and social services tend to have a higher number of native-born-owned businesses in high-tech industries.

Key Finding 7

Key Finding 7

Unlike the U.S.-born, however, higher ethnic diversity and a larger share of the foreign-born population are crucial factors in attracting or fostering immigrant high-tech entrepreneurship on the metropolitan level.

To read the full report paper, please visit here.

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