Immigrant Entrepreneurs in the US: Favorite Business Ideas

In 2017 the foreign-born proportion of the US population stood at 13.6%, or 44.4 million people. Although a large share of this migrant community comes from Mexico, nearly every nationality on the planet is represented in the US. It is the largest host of migrants in the world. Every documented migrant gives a real contribution toward the country’s economic growth. Migrants are important to the US economy as components of the labor force. The migrant tax contribution is significant in and of itself. Migrants also enrich their home economies. For example, there are more than 1.9 million Filipinos in the United States since 2016. Most of them send money to Philippines with clockwork regularly, to support their families.

Despite other contributions by the millions of migrants in the US, the most important factor by far is their entrepreneurship. Migrants are more likely to start new businesses. These businesses often grow, create jobs and vitalize the communities in which they exist. According to a 2016 study by the National Foundation for American Policy (NFAP), 51% of startup companies in the US with a value of $1 billion and above were started by immigrants. A 2010 analysis by the Fiscal Policy Institute indicates that there are certain types of businesses migrants prefer. Here is a glance at the top few industries that US-bound migrants prefer to enter as entrepreneurs.

Restaurant and food service

The National Restaurant Association predicts that in 2020 the combined restaurant industry revenue will exceed $899 billion. In its September 2016 update the association highlighted that migrants owned 29% of businesses in the restaurant and hotel sector in the US. The overwhelming propensity of migrants to start food businesses is owed to many causes. For most foreign-born workers restaurant jobs are an easy entry point into the job market. In 2016, 43% of restaurant chefs and 25% of restaurant managers were immigrants. Over the years many of these foreign workers gain experience and opt to start their own ventures.

Real estate, rental and leasing

According to a 2010 report by RealtyTrac, 42.74% of real estate businesses were owned by migrants. Leasing and renting out of commercial space such as industrial warehouses, office buildings, complexes, and retail shopping spaces are among the most common transactions in this domain. The National Real Estate Trends report indicated that ease of access to finance has been a major boost for foreign-born business owners in this sector.

Grocery stores

The 2010 Fiscal Policy Institute analysis revealed that 49% of small grocery business in the United States were owned by migrants. Research conducted in the City of Flint, Michigan showed that Arab immigrants owned 98% of all grocery stores in the 1980s. By 2007 this percentage had dropped marginally to 92%, with the remaining stores being owned by Asian communities (primarily from India). This dominance of migrants in small scale retail can be explained by their historic expertise in trading and sales. The prominence of Asian traders dates back to the 1890s. Subsequent generations of migrants took over the family retail businesses through natural succession, and the trend continues to this day.

Professional and business services

This industry encompasses multiple categories of professionals including lawyers, accountants, engineers, doctors, and so forth. As of 2010 there were just over a million businesses registered in this industry. Foreign-born migrants accounted for the ownership of 141,000 of these. The cause of this distribution is brain drain from developing nations. 17.2% of immigrants coming to the US in 2016 had a bachelor’s degree while 12.8% had a post-graduate degree. Highly skilled professionals seeking better opportunities in their domains naturally look to US-bound migration as a solution.

Transport and warehousing

The Fiscal Policy Institute documented that in 2010 there were 189,281 small businesses registered in this sector.  26% were owned by migrants. Logistics businesses are leading among those that hire migrants in entry-level jobs. Over time the unskilled and semi-skilled migrants gain operational expertise. Eventually they are able to secure the necessary financing to start new businesses of their own. The most successful example in this category is Uber Technologies.

In summary

Immigrant entrepreneurs have been game changers in many industry sectors. They have collectively added billions of dollars to the US economy and created millions of new jobs. The US needs holistic immigration policies implemented with a long-term ideology. Such policies will enable the greatly skilled and highly motivated migrant community to continually add value.

About the author:

Hemant G is a contributing writer at Sparkwebs LLC, a Digital and Content Marketing Agency. When he’s not writing, he loves to travel, scuba dive, and watch documentaries.

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