Education, Entrepreneurship, and Immigration

AmericA’s New immigrANt eNtrepreNeurs, pArt ii

Revealing new data about immigrant key founders who are fueling U.S. technology and engineering companies
This study tracked the educational backgrounds of immigrant entrepreneurs who were key founders of technology and engineering companies from 1995 to 2005. This study, published in June 2007, was funded by the Ewing Marion Kauffman Foundation and conducted by Duke University and the University of California, Berkeley. While the contribution of skilled immigrants to America’s technology and engineering start-ups has been recognized for the past decade as critical to the emergence of many of America’s most entrepreneurial companies and huge, new industries, little has been known about the backgrounds of these immigrant key founders.
June 11, 2007
Electronic copy available at: http: //ssrn.com/ab stract=991327

igration: ip and ImmPa r t I I trepreneursh Education, En e w I m m i g r a n t E n t r e p r e n e u r s , N
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Download this study: www.kauffman.org/immigration

This study is a follow-up to a previous report that showed that in 25.3 percent of technology and engineering companies started in the United States from 1995 to 2005, at least one key founder was foreign-born. Nationwide, these immigrant-founded companies produced $52 billion in sales and employed 450,000 workers in 2005. The majority of these immigrant key founders came from India, the United Kingdom, China, Taiwan, Japan, and Germany. Key finding: There is a strong correlation between entrepreneurship and educational attainment, especially in science, technology, engineering, and mathematics (STEM).
Figure 2 Fields of Highest Degree by Immigrant Founders of Engineering and Technology Companies

Search for this related study at www.kauffman.org:
• Intellectual Property, the Immigration Backlog, and a Reverse Brain-Drain: America’s New Immigrant Entrepreneurs, Part III

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Contact: Barbara Pruitt 816-932-1288 bpruitt@kauffman.org Kauffman Foundation

www.kauffman.org
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Comparing these data with data from the 2000 U.S. Census, we can observe that these immigrants are also disproportionately founders of engineering

Education, Entrepreneurship, and Immigration

• 96 percent of immigrant technology and engineering company founders held bachelor’s degrees. • 74 percent held graduate or postgraduate degrees. • 75 percent of the highest degrees attained were in STEM fields. • 53 percent completed their highest degrees at U.S. universities.

Other findings:
• More than half of the foreign-born founders of U.S. technology and engineering businesses initially came to the United States to study. • Almost 40 percent entered the country because of a job. • Immigrant entrepreneurs typically founded companies after working and residing in the United States for an average of 13 years. • Immigrant founders were educated in a diverse set of universities in both their home countries and across the United States. • Immigrant founders tended to move to cosmopolitan technology centers. • Thirty-one percent of the engineering and technology companies founded from 1995 to 2005 in the 11 technology centers surveyed had an immigrant as a key founder compared with the national average of 25.3 percent. • Technology centers with a greater concentration of immigrant founders in their state averages include: Silicon Valley, 52.4 percent; New York City, 43.8 percent; and Chicago, 35.8 percent. • Three technology centers had a below-average rate of immigrant-founded companies: Portland, 17.8 percent; RaleighDurham’s Research Triangle Park, 18.7 percent; and Denver, 19.4 percent.
Figure 14 Immigrant-Founded Engineering and Technology Companies as Percent of Total Startups in Tech Centers

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whether one or more of the company’s key founders were immigrants. We found that, on average, 31.4 percent of the startups located in these technology clusters had an immigrant key founder, compared with the national average of 25.3 percent.

Silicon Valley leads the nation in immigrant entrepreneurship: 52.4 percent of its technology v.101508 and engineering firms have immigrant key founders. Silicon Valley is followed by Figure 15 e w i N g m A r i o N K Au f f m A N f o u N dAt i o N New York City at 43.8 percent and Immigrant-Founded Engineering and Technology 4 8 0 1 r o c K h i l l r o A d , K A at s A spercent. The technology r i 6 4 1 1 0 N c i t y, m i s s o u Chicago 35.8 in Tech Centers vs. State Averages t e l : 8 1 6 - 9 3 2 - 1 0 0 0 w w w . k a uthe m a n .immigrant key centers with f f lowest o r g founder presence were Denver at 19.4

localized clusters of technology and engineering activity in both attracting and supporting immigrant startup activity. The notable exception are Denver and San Diego. In both centers, a significant proportion of the technology and engineering activity is related to military activities from which immigrants are often excluded.

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