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Migrants driving business, US studies show

21 December 20180 comments

It’s an irony that at a time when the Trump administration is trying to wind down the flow of migrants to the US, a raft of new research from America shows they are actually good for business.

Not only do immigrants establish proportionally more businesses than native-born entrepreneurs, their companies are also more likely to succeed, according to new research analysing entrepreneur trends in the US.

The study by Harvard Business School compared the employment growth of new US enterprises over three- and six-year periods.

The results show that companies founded by immigrants grew at a faster rate and were likely to survive longer than those started by entrepreneurs born in the US.

The study’s authors said immigrants tended to be engaged in more volatile business ventures, with “up-or-out” growth prospects.

Meanwhile writing in the Harvard Business Review, Vice President of International Operations and Strategy at marketing software firm HubSpot, Nataly Kelly says that maximizing the benefits of hiring a mix of cultures, backgrounds and experiences depends on each employee being made to feel included and part of the team.

“Immigrants know what it feels like to be an outsider and so are more inclined to help others assimilate into the culture of their company,” Ms Kelly said.

She said that overcoming the challenges of leaving their homeland and settling into a new country can foster an “immigrant mindset” which can prove an asset to companies.

As well as requiring adaptability, migrating to a new country involves hard work, confidence in one’s abilities and a tolerance for uncertainty, which are also traits associated with business growth and survival.

Another study in the US by the Kauffman Foundation found 40 per cent of the Fortune 500 list of top companies were founded by immigrants or the children of immigrants

It also found migrants started 28.5 per cent of all new businesses in the US in 2017.

Between 2010-2016 migrants founded one quarter of the engineering and technology companies in the United States. In 2016 migrant founded engineering and technology firms employed approximately 560,000 workers and generated $US63 billion in sales, the study found.

Migrants in the US have seen their rate of business generation rise by more than 50 per cent since the start of the new millennium, while native-born citizens have seen their rate of new-business generation decline by 10 per cent.

The study also shows migrants are now more than twice as likely to start a business as native-born citizens.




Laurie Nowell
AMES Australia Senior Journalist