New Immigrant Entrepreneurs

April 1, 2007

In the U.S., immigrants are often blamed for decreasing wages and lost employment opportunities, or, in some cases, characterized largely as unskilled workers who necessarily fill the low-wage, labor-intensive jobs that no one else wants.

But a new study conducted by a student research team at Duke’s Master of Engineering Management Program (MEM) presents immigrants in a different light, providing fuller context to the nation’s immigration debate.

According to the researchers, immigrant entrepreneurs founded 25.3 percent of the U.S. engineering and technology companies established in the past decade. What’s more, foreign nationals—those living in the U.S. who are not citizens—contributed an estimated 24.2 percent of international patent applications in 2006.

“To sustain our economic and global competitiveness, America needs to focus on its many strengths,” says Vivek Wadhwa, executive in residence for the MEM program. “One of these is our ability to attract and assimilate the world’s best and brightest.” Wadhwa himself is an immigrant who has co-founded two technology companies.

The study builds on research published in 1999 by AnnaLee Saxenian, a professor and dean at the University of California at Berkeley, that focused on the development of Silicon Valley’s regional economy and the roles of immigrant capital and labor in this process. Saxenian assisted with the project.

Almost 26 percent of all immigrant-founded companies in the past ten years were founded by Indian immigrants, researchers found. Immigrants from the United Kingdom, China, and Taiwan contributed to 7.1 percent, 6.9 percent, and 5.8 percent of all immigrant-founded businesses, respectively.

These businesses were unevenly located across the country. California and New Jersey represented hot spots for engineering and technology businesses founded by immigrants; Washington and Ohio possessed relatively low percentages of such businesses.

In a special analysis of technology centers in Silicon Valley, California, and Research Triangle Park, North Carolina, the researchers found that immigrants play key roles in even larger numbers of businesses.

“In places like Silicon Valley, we see the compounding impacts of immigrant social and technical networks,” Saxenian says. “Successful entrepreneurs not only contribute to the regional economy but also become powerful role models and mentors, attracting subsequent generations of immigrants to the area.”

After completing an analysis of the World Intellectual Property Organization Patent Cooperation Treaty database for international patent applications filed in the U.S., the researchers estimated that foreign nationals residing in the U.S. were named as inventors or co-inventors in 24.2 percent of such international patent applications in 2006. This percentage increased dramatically from 7.3 percent in 1998 and does not include immigrants who became U.S. citizens before filing a patent application. The largest group of contributors was of Chinese origin. They were followed by Indians, Canadians, and British.

The team of eighteen students from the MEM program was led by Wadhwa, research scholar Ben Rissing M.E.M ’06, and Gary Gereffi, director of the Center for Globalization, Governance & Competitiveness and a professor of sociology.