Study: Immigrants Found More Businesses than Native-Born Americans

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Back in November, I blogged about the outstanding work ethic that seems to differentiate many foreign-born entrepreneurs from their counterparts born in the United States.

A new study from the Ewing Marion Kauffman Foundation lends further credence to this idea. According to the latest Kauffman Index of Entrepreneurial Activity, an annual study that measures business start-up activity for the U.S. adult population at the individual owner level, immigrant entrepreneurial activity grew from 0.37 percent in 2006 to 0.46 percent in 2007. The rate of activity for native-born Americans remained flat at 0.27 percent.

According to an older and widely cited study produced by researchers from Duke University and the University of California-Berkeley, 25 percent of U.S. technology and engineering start-ups were founded by immigrants.

Looking at the big picture, 495,000 new businesses a month were started in 2007, with 0.30 percent of the adult population (that's 300 out of 100,000 adults) involved in start-ups, according to the Kauffman Index. This overall entrepreneurial activity rate is a slight increase over the 2006 rate of 0.29 percent.

Other interesting highlights from the study:

  • The construction industry had the highest entrepreneurial activity rate of all major industry sectors in 2007, followed by the services industry. Manufacturing had the lowest rate.
  • Entrepreneurial activity rates are highest among the least-educated and most-educated groups. College graduates showed the highest rates of entrepreneurial activity recorded since the study began.
  • Latinos showed the highest increase in new businesses for all ethnic groups, from 0.33 percent in 2006 to 0.44 in 2007. Activity among non-Latino whites and African-Americans increased slightly from 2006 to 2007, while the number of businesses founded by Asians decreased slightly.