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One In Five U.S. Small Business Owners Born In A Different Country

Written by Tim Morral
Published: 6/15/2012

New study shows that immigrant entrepreneurs are playing a larger role in America's small business economy.

Historically, immigrants have been important players in American small business. From corner shops to larger business ventures, many immigrants to the U.S. have found their footing in business and have established ethnic entrepreneurship as a force on the national business scene.

Immigrant Small Business Owners

Now a recent study by the Fiscal Policy Institute's Immigration Research Initiative shows that immigrant-owned small businesses are more prevalent than ever. Approximately one in five (18%) small business owners in the U.S. was born in a different country -- even though immigrants make up just 13 percent of the population and 16 percent of the national labor force.

The current figures are a dramatic change from just a few decades ago when immigrants comprised 9 percent of the workforce and 12 percent of all small business owners. Immigrant-owned small businesses (less than 100 employees) now bring in $776 billion in annual revenue and employ 4.7 million workers, 14 percent of the entire small business workforce.

"Immigrants are playing a particularly important role in the kinds of businesses that bring people into downtown areas and help enliven neighborhoods," said David Dyssegaard Kallick, director of the Fiscal Policy Institute's Immigration Research Initiative. "I don't think immigrants are 'super-entrepreneurs,' but I do see that immigrants are playing an important and growing role across the American landscape. And it's not just traditional immigrant gateways, it's all around the country."

The study also found that immigrants from the Middle East, Asia and Southern Europe report the highest rates of small business ownership and foreign-born women outpace American-born women in small business ownership rates. The majority of immigrant entrepreneurs don't have a college degree. However, this isn't a characteristic that is unique to immigrant-owned businesses since most small business owners (both foreign and U.S.-born) lack a formal college education.

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