This document discusses research on the impact of immigrant entrepreneurs on the US economy. It summarizes studies finding that immigrants have founded a significant portion of new tech companies and patents in places like Silicon Valley and New Jersey. However, outdated US immigration laws threaten these entrepreneurs' ability to remain in the country. While immigrants contribute greatly to jobs and innovation, policymakers have been slow to modernize laws to support skilled immigrant founders.

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Open the Gates or Build a Wall?
Research Question: How do immigrant entrepreneurs impact the US economy, and what does
the research suggest policy makers should do about it.
Purpose: To highlight the importance of immigrants to American innovation, job creation and
expose the outdated immigration laws in the US for skilled foreign workers.
The notion of stepping out of one comfort’s zone plays a central role in decision making
by all humans. Perhaps one of the clearest examples of leaving one’s comfort zone is moving
countries in the search of something better. America has always been a highly popular location
for immigration, due to the plethora of opportunities present in the “land of the free, home of the
brave”. The act of starting a company involves constantly walking the fine line between what
one is comfortable with and the unknown. It is no surprise then, that many of the immigrants
who came to the US in search of the American dream, ended up starting companies themselves.
With recent popularity gained by Donald Trump and his radical views towards immigrants, the
issue of immigration has never been more prevalent. Nevertheless, over the past three decades,
there have been many academics and enthusiasts that have studied the trends of entrepreneurship,
particularly as it pertains to immigrants and their impact. Their findings are absolute astonishing.
What they expose, is that the amalgamation between the resources found in the US, and the
talent and audacity of immigrants leads to a recipe of success with far reaching effects for
Americans and the world. However, it also exposes the issues faced by skilled immigrants and
how their future in the US is under a constant threat.
One of the pioneers and experts in the field of immigrant entrepreneurship is Annalee
Saxien, a UC Berkeley Dean and Professor. She executed a comprehensive study in the 90s in

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order to analyze the impact of immigrant high-skilled entrepreneurs, particularly those of
Chinese and Indian descent. The study focused on their impact to California and more
specifically Silicon Valley. The author utilized a variety of government data, information from
11,443 high-tech startups in California and conducted detailed interviews with 100 business
professionals with extensive on-the-field or academic knowledge about the subject (Saxenian,
2002). Using data mainly from the 1980s and 1990s, it created a compelling case for Californian
scholars and government officials to support the easing of immigration laws, especially when it
involves entrepreneurs and high-skilled tech workers. The study found a strong correlation
between the immigration of Chinese and Indian immigrants and the rise of tech companies in the
valley (Saxenian, 2002).
Annalee Saxien was involved in another publication in 2007 together with three Duke
academics which measures the impact of immigrant entrepreneurs to the US economy from a
purely technical point of view. Primarily, they looked at engineering and technology business
with a focus on intellectual property. They came to the conclusion that California and New
Jersey (due to its accessibility to the resources of NYC) are the hotbeds for startup incubation
and creation. Furthermore, they found that in the years of 1998-2006, 14.76% of all patent
applications in the United States had at least one immigrant involved as a lone or co-founder
(Wadhwa, 2007). Their importance for American and globe innovation is further highlighted by
the fact that in all American technology and engineering businesses created in the US between
1995-2005, one quarter of them had an immigrant key founder (Wadhwa, 2007). The study
suggests that immigrant entrepreneurs are not only contributing to the economy, but are also
driving innovation and promoting technological advances.

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However, the impact of immigrant entrepreneurship has another component to it when
one factors first generation Americans into the equation. Erwing Kauffman is an adept example
as he was a highly successful entrepreneur and MLB owner, and his parents were born in
Germany, while he was born in the US. He established the Kauffman foundation which dates
back to over 50 years of bringing innovation and helping to impact people’s lives through
education and entrepreneurship (Our Founder). The Kauffman foundation has conducted
extensive research into the impact of immigrants in the startup world, and recently released a
brief which quantifies the economic impact of a new type of visa: the startup visa. The brief
exposes some astounding facts about immigrant founders and their successes. Over 200 of the
Fortune 500 companies in 2010 were established by the son of an immigrant or an immigrant. A
massive issue in the immigration debate in the US is that some believe that immigrants are taking
away jobs from Americans. However, as shown and discussed in the brief, a Startup Visa would
only increase the number of jobs in the US economy. From issuing 10,000 startup visas per year,
in the next 10 years, the number of jobs created would range from 400 thousand to 1.5 million
(THE ECNOMIC). The discrepancy comes from different ways of calculating jobs, and the
uncertainty of how much startups will grow. The ripple effect is impressive, and in some ways is
similar to the ripple effect that overall immigration has in an economy: first, second and third
generation Americans will embody their ancestors’ cultures, but have an incalculable impact in
the American economy and society.
The Kauffman foundation has also released other briefs and videos about the topic, and
the video “America’s Great Job Creators” is one of its most popular and praised ones. The video
states that 52% of Sillicon Valley startups are founded by immigrants (Kauffman, 2012). It
provides a few more facts, and then contrasts them with successful immigrant entrepreneurs who

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are struggling, or have struggled to remain in the US due to Visa regulations. Despite their
already proven economic benefit to the US economy, there are many people struggling to remain
in the US when their visa expires. The video has first-hand accounts from Chinese, Spanish and
Israeli entrepreneurs currently living in the US - all very successful, but facing the issue of
battling what they consider to be outdated immigration laws (Kauffman 2012).
The issue faced by these immigrant entrepreneurs is amplified and put into perspective in
an article written by the highly acclaimed Inc. magazine. The article pulls from many sources to
ultimately prove that immigration laws for skilled workers and entrepreneurs in the US is highly
outdated (Bluestein, 2015). It exposes some of the issues with the political landscape in the US,
where Obama wishes to change some of these laws in favor of more high-skilled immigration
but is facing continuous backlash from congress (Bluestein, 2015). In 2010, immigrant-owned
companies in the US accounted for almost 800 million dollars in sales. However, the number of
immigrant founded companies is not keeping up past growth. Other countries are catching up to
the US in terms of resources, but leaving the US behind in terms of accepting foreigners. Thus,
entrepreneurs are going elsewhere, and establishing their companies where the legal process of
acquiring a visa is far simpler (Bluestein, 2015).
America is a country founded upon immigration – it was people leaving Europe that
created the earliest America that we know. Throughout history it has been immigration and the
impact of immigrants that has helped to drive this nation forward. America provides a perfect
place for people to launch and grow their companies, but it requires the right type of people to do
so. Immigrants, and particularly highly skilled immigrants, sometimes possess the necessary
drive and EQ to be successful. Though their impact over the past 30 years is astonishing, the
laws have not kept up with their growth and positive impact. In fact, current world issues such as

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terrorism and violence have given rise to further tensions when one speaks about immigration.
Other countries have thus been allowed to catch up to the US in terms of resources and with
more open boundaries attract talent from all over the world to establish their companies. The US
is still the ideal place, but a place cannot be ideal, if one cannot enter and reap its benefits.
Works Cited
Bluestein, A. (2015, February). The Most Entrepreneurial Group in America Wasn't Born in
America. Inc. Retrieved September 20, 2016, from http://www.inc.com/magazine/201502/adam-
bluestein/the-most-entrepreneurial-group-in-america-wasnt-born-in-america.html
Kauffman. (2012, July 10). "America's Great Job Creators" long version. Retrieved September
20, 2016, from https://www.youtube.com/watch?v=lG-YyI9ibyo
Our Founder. (n.d.). Retrieved October 02, 2016, from http://www.kauffman.org/who-we-
are/our-founder-ewing-kauffman
THE ECONOMIC CASE FOR WELCOMING IMMIGRANT ENTREPRENEURS. (2015,
September/October). Retrieved September 20, 2016, from http://www.kauffman.org
Saxenian, A. (2002). Silicon Valley's New Immigrant High-Growth Entrepreneurs. Economic
Development Quarterly, 16(1), 20-31. doi:10.1177/0891242402016001003
Wadhwa, V., Saxenian, A., Rissing, B., & Gereffi, G. (2007, January 4). America’s New
Immigrant Entrepreneurs [Scholarly project]. Retrieved September 20, 2016, from
http://seipa.edu.pl/s/p/artykuly/90/906/High tech entrepreneurs immigrants.pdf