My children attend a Montessori preschool started by an Indian immigrant. Like many, she did not come to this country to start a business. But after multiple college degrees in the United States and some years working in corporate America, she opened her first Montessori school. Nearly 15 years later, she owns two schools, employs 100 women, and touches the lives of hundreds of students each day.
She greets students and parents each weekday morning, cup of coffee in hand. Her warmth and passion carry over to her staff. These schools provide a service to the largely professional, dual-income families in these suburbs. But they are also important anchors in these communities. Like so many other immigrants, her creativity helps sustain the economic health of her city.
Immigrants are a force among entrepreneurs in the United States. In 2015, immigrants started new businesses at twice the rate of native-born Americans. Whether the small mom-and-pop stores that dot our communities or one of the giants of American capitalism, immigrants drive much of American business creation.
Nowhere is that more evident than in America’s largest, most successful companies. In 2019, nearly 45 percent of the Fortune 500 companies in the United States were founded by immigrants or the children of immigrants.
These companies, such as Alphabet (Google’s parent company), Apple and Amazon, are economic powerhouses both at home and abroad, employing thousands of people. Some help drive innovation. Others, like Verizon and UPS, provide important services. Companies like Dollar Tree, Home Depot, Kroger and Costco supply our consumer goods.
But most immigrant entrepreneurs own the types of businesses that populate Main Street. In fact, immigrants start more than a quarter of all “main street” businesses — retail, neighborhood services, and accommodation and food service. These businesses are vital to the economic health of their communities, especially creating jobs. According to the Bush Institute’s handbook of immigration facts, America’s Advantage, immigrant entrepreneurs who have employees hire, on average, more than 11 employees.
Their effect is not just about economics, though. Main Street businesses are where we get our groceries and grab a meal; they are where we get haircuts and manicures; they tailor and dry clean our clothes. In these subtle but important ways, immigrant entrepreneurs weave the fabric of our cities and towns.
Certainly, these benefits accrue whether the entrepreneur is an immigrant or a native-born American. So why focus on immigrant entrepreneurialism? Because immigrants punch above their weight as entrepreneurs. They are only 13.5 percent of the population, but more than 20 percent of entrepreneurs in the United States.
And as for Main Street? Immigrants own 61 percent of gas stations; 58 percent of dry cleaning services; 53 percent of grocery stores; 45 percent of nail salons; 43 percent of liquor stores; 38 percent of restaurants; and 32 percent of jewelry and clothing stores. If you live in a community with many immigrants, there is a good chance that an immigrant started the store that provides your day-to-day needs for goods and services.
So how can communities encourage more immigrant entrepreneurs to start businesses in their neighborhoods?
In 2015 paper, the Fiscal Policy Institute and Americas Society/Council of The Americas laid out a toolkit for communities to foster immigrant small business ownership. Their recommendations focus on how the public and private sectors can together create a welcoming environment and fertile ground for both immigrant entrepreneurs and native-born entrepreneurs to start new businesses.
The private sector, for example, can address immigrant entrepreneurs’ unique needs, like language barriers and discomfort with our political and regulatory systems. Nonprofits can provide invaluable assistance to overcome these normal barriers, too.
Governments must commit to an environment that fosters entrepreneurship of all residents. Cities play a particularly important role. Fostering immigrant entrepreneurship is just one piece of a larger welcoming agenda that cities should adopt. Cities like Dallas are already hard at work implementing a Welcoming Plan through its Office of Welcoming Communities and Immigrant Affairs.
The federal government can help, too. Unlike other similarly situated countries, the United States does not have a visa category for immigrants who want to start a business. Would-be immigrant entrepreneurs must find a way to emigrate through other avenues or take their chances in another country, like Canada, that has a startup visa.
Entrepreneurship is one of the most effective growth engines of our economy, and immigrants’ willingness to open new businesses is a key component. Policies at all levels of government should recognize this importance, remove unnecessary barriers to starting a new business, foster a welcoming culture for immigrant entrepreneurs, and provide a dedicated legal channel for entrepreneurs to emigrate to the United States.
Without these changes, the United States may not produce the next Facebook. More important, people like my children’s Montessori school director may never have the chance to anchor a community.