Are Immigrants Sharper Entrepreneurs?

Statue of Liberty

During years of interacting with over a thousand business owners I often mused over that question. I live in Southern California, so businesses created or owned by immigrants are as plentiful here as sunshine. My personal “eyeballs and conversations” research has brought me many interesting encounters in that diverse and dynamic small business community.

For many immigrants, entrepreneurship is a matter of necessity. Limited proficiency in English can make it very difficult to land a job; credentials earned outside the U.S. often don’t translate into professional opportunities. So, frequently job #1 is figuring out how to start a business even if the money is in short supply.

One of the first stories that we put on the “Making It” TV show decades ago was about Helen Shih and her brother Marty who were born and raised in Taiwan. The now deceased Marty explained his immigrant to entrepreneur experience to me quickly. He said they embraced the American dream and wanted to live it. He wanted to become the CEO of a big company but realized his very limited language skills would prevent that. So, he decided that his college tuition money would instead be used to finance a business. Living in Los Angeles, they first started a small flower shop in a space that resembled a walk-in closet. They were not trained florists, and on day one for the enterprise, their entire floral inventory froze! Despite that naïve mistake, he and Helen survived in their own business which led to a multi-million-dollar company.

Recently I learned that Latin American immigrants are starting businesses at more than twice the rate of the U.S. population as a whole. The jump in Latino entrepreneurship has driven up the overall share of new businesses owned by immigrants, who accounted for 36% of launches last year compared with 25% in 2019, according to a new analysis of Census Bureau data. New-business creation by white and native-born Americans has slowed in the past two years, following a broad surge early in the pandemic.   

During my travels in black communities on either side of the country, I’ve noticed that many businesses are owned by people from the Caribbean or African countries, not native Americans. Why is that? Are African Americans not often being guided to entrepreneurial thinking and confidence? Is it easier to see the opportunities in cultures many miles away? My non-scientific opinion comes from thinking that anyone who is going to move away from home to another country is inclined to be a risk taker. They often feel that greater opportunity exists far over the horizon, and they are very hungry to find it.

Several years ago I was impressed by a black entrepreneur in Atlanta who moved here from Nigeria. Tope Awontona became the founder and CEO of Calendly, the scheduling platform software company, now worth many millions.  Elon Musk was born in Pretoria, South Africa and has become one of the most successful and best known entrepreneurs in the world from his base in the United States.

No matter where you come from, your sheer enthusiasm, or your level of education, creating a sustainable and growing business is not easy. According to the Bureau of Labor Statistics, approximately 20% of small businesses fail within their first year. The failure rate increases to 30% by the end of the second year, 50% by the fifth year, and 70% by the tenth year.

Yes, I do think that many immigrant entrepreneurs have proven to be sharper and more motivated than those who are home grown. The hit Broadway musical “Hamilton” has a line in the script that brings very loud applause during each performance. “Immigrants, we get the job done.”

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