A study by Kaufmann foundation shows that the proportion of immigrant-founded companies nationwide has slipped from 25.3 percent to 24.3 percent since 2005. The drop is even more pronounced in Silicon Valley, where the percentage of immigrant-founded startups declined from 52.4 percent to 43.9 percent.
The report, which evaluated the rate of immigrant entrepreneurship from 2006 to 2012, updates findings from a 2007 study that examined immigrant-founded companies between 1995 and 2005.
From the 107,819 engineering and technology companies founded in the last six years, the study examined a random sample of 1,882 companies in a nationwide survey. Of those companies, 458 had at least one foreign-born founder.
The exceptions to this downward trend were immigrants from India. Although founders in the study hailed from more than 60 countries, 33.2 percent of them were Indian, an increase of 7 percent in 2005. Indians, in fact, founded more of the engineering and technology firms than immigrants born in the next nine immigrant-founder countries combined.
After India, immigrant founders represented China (8.1 percent), the United Kingdom (6.3 percent), Canada (4.2 percent), Germany (3.9 percent), Israel (3.5 percent), Russia (2.4 percent), Korea (2.2 percent), Australia (2.0 percent) and the Netherlands (2.0 percent).
While immigrant entrepreneurship has stagnated, the rates of Indian and Chinese startups have increased. In 2005, Indians and Chinese entrepreneurs accounted for 26.0 percent and 6.9 percent of immigrant-founded companies, respectively.
Singularity University’s Vivek Wadhwa, in his book The Immigrant Exodus: Why America Is Losing the Global Race to Capture Entrepreneurial Talent has covered the alarming drop in immigrant entrepreneurship in U.S.
..issue is not simply the threat of “reverse brain drain” but a newly identified and historically unprecedented halt in high-growth, immigrant-founded start-ups. The U.S. hasn’t yet responded to the intensifying competition that countries such as China and India offer, and has left some of the most educated and talented entrepreneurial immigrants with no choice but to take their innovation elsewhere. The consequences to our economy are dire; our multi-trillion-dollar loss will be our global competitors’ gain. [source]
While Vivek Wadhwa is batting for visa for immigrant entrepreneurs, the other reality is that the local markets in other geographies are picking up and entrepreneurs are also looking at these virgin territories.
- Related Read: Startup Visa And The Impact on Indian Startup Ecosystem
- Opinion piece : Cultural Differences between Indian & Silicon Valley Startups