By Ed Diokno
Asian immigrants led the list of billion-dollar American companies started by immigrants, according to a policy brief by the National Foundation for American Policy.
Titled “Immigrants and Billion Dollar Startups,” the research shows the benefits of making it easier for foreign students to study in American colleges and universities. A quarter of the companies in the study were launched by students who attended U.S. institutions and decided to pursue their dreams in this country.
Entering the U.S. as an international student has shown to be a good avenue for starting successful U.S. companies. Nearly one-quarter (20) of the 87 billion dollar U.S. startup companies – and almost half of the companies with an immigrant founder – had a founder who first came to America as an international student.
- Fifty-one percent, or 44 out of 87, of the country’s $1 billion startup companies had at least one immigrant founder. This illustrates the increasing importance and contributions of immigrants to the U.S. economy. A 2006 study conducted with the National Venture Capital Association (NVCA) identified an immigrant founder in 25 percent of venture-backed companies that became publicly traded between 1990 and 2005, while a 2013 NVCA study found immigrants started 33 percent of U.S. venture-backed companies that became publicly traded between 2006 and 2012.
- This study is one of the first to examine the role immigrants play on the management or product development teams in leading private companies in information technology, health, energy, financial services, and other sectors. The research found 62 of the 87 companies, or 71 percent, had at least one immigrant helping the company grow and innovate by filling a key management or product development position.
- The billion-dollar startup companies with an immigrant founder excel at job creation. The leading companies for employment are SpaceX (4,000 employees), Mu Sigma (3,500 employees) and Palantir Technologies (2,000 employees). Uber has only 900 direct employees but has 162,000 active drivers.
- California was the headquarters of 32 of the 44 immigrant-founded companies, followed by New York (6), Massachusetts (4) and Illinois (2).
- Contrary to popular belief, holders of H-1B visas are not taking jobs away from Americans. As a matter of fact, for every H-1B visa position requested, U.S. technology companies increase their employment by five workers.
The study concludes that the U.S. should be making immigration rules that encourage foreign students to flourish in America and warns against the restrictive policies encouraged by some of the presidential candidates. For example, if S. 2394, a bill by Senators Ted Cruz (R-TX) and Jeff Sessions (R-AL), had been in effect over the past decade, few if any of the billion-dollar startup companies with an immigrant founder would have been started in the United States.
Immigrant entrepreneurs make important contributions to America, bringing new ideas and starting companies themselves or joining forces with native-born co-founders. Instead of making it more difficult for them to stay in this country, we should be finding ways to encourage them to stay. As the study shows, many of them come to this country to take advantage of the education and facilities offered by our best universities, founding a company and creating jobs is the best payback.
(Ed Diokno writes a blog :Views From The Edge: news and analysis from an Asian American perspective.)
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