| 10 Questions…on the Power of Immigrant Entrepreneurs for Jonathan Bowles It comes as no surprise that immigrant entrepreneurs make up an increasing number of businesses today. Yet, Jonathan Bowles, director of the New York-based Center for an Urban Future and author of the recent “A World of Opportunity” report, explains here how they’re also having an unparalleled positive impact on local economies. But that’s just the start of it. It might be easy to look at a few figures and come up with the general points that immigrant entrepreneurs are growing and important. What did you do to combat such a preconception? We spent more than two years studying immigrant entrepreneurs. We looked at detailed statistics and conducted interviews for anecdotal evidence in Houston, New York City, and Los Angeles. And we took a very narrow view of defining “immigrant entrepreneur” – we looked at those born outside the United States who started their own business. And what you found overall? Immigrant entrepreneurs have truly become engines of economic growth in these cities. More than just mom-and-pops, they’re stimulating growth in many sectors, creating jobs, and helping transform once-depressed neighborhoods into thriving commercial centers. Yet, there’s still a significant untapped element to this population. We’ve only scratched the surface. What’s untapped about the impact of immigrant entrepreneurs? Cities are always looking for ways to foster economic development for the benefit of the entire community. Most of the time, that comes in the form of trying to attract certain segments of the market such as biotech or other industry players. I think working to encourage and foster more immigrant entrepreneurs in a certain area could have the same effect. How can communities capitalize on these entrepreneurs? It can be a challenge to deliver small business services to immigrants – a lot of major business organizations like chambers of commerce and community development organizations haven’t figured out a way to connect with immigrant communities. It’s because many are intimidated going to outsiders or setting foot in government offices, but these organizations need to do a better job. One way is becoming more grass roots – going into the communities or partnering with small organizations inside them to build credibility within the community. The overall sense I got is that they need to do a better job. Even in Los Angeles with its immigrant populations, we didn’t find any government programs specifically targeting immigrant entrepreneurs as seeds of potential economic growth. So just how important are they? I always refer to this one finding we uncovered that is about Los Angeles in particular: Of the 100 fastest growing companies in Los Angeles in 2005, at least 22 were founded by immigrants. That’s astounding. They’re really helping to spark growth of the L.A. economy. Any other markers of how important they are in L.A.? One of our anecdotal interviews, with the president of the Van Nuys-based Valley Economic Development Center, Roberto Barrigan, estimated 80 percent of the new companies in Los Angeles are started by immigrants. Companies such as fashion designer BCBG and restaurant chains El Pollo Loco and Panda Express are just a few examples of the immigrant-founded businesses that have been taken national. It would be hard to imagine any other city having so many immigrant success stories as Los Angeles. Have we as a country overlooked this group? So much of the national discussion on immigrant reform is focused on immigrants as laborers and taking jobs from native-born Americas. Yet, here we’ve shown they are starting their own businesses and then creating jobs. And it’s across the board in terms of ethnic groups who are starting these businesses. There’s been tremendous growth among people of Korean, Chinese, and Vietnamese descent, but also Iranian and Armenian, and Mexican and Salvadorans. There are differences within those communities, though. What are some of the differences within various ethnic communities? Mexicans don’t start businesses as quickly, and have slightly lower self-employment rates. Some of the reasons we found were that they arrive with few assets whereas some from Asia or the Middle East have a long tradition of entrepreneurship and often have connections to financial networks here in the U.S. Regardless, all are helping to make an impact. What surprised you the most in the two-year study? That stat about 22 of the 100 fastest growing companies in Los Angeles really was staggering. Every time I think about it, it really blows me away and illustrates the points we’re making. I was also surprised by the extent to which immigrants tend to stay outside of financial markets. They tend to have a lack of credit history, often don’t keep complete books, and they’re not accessing bank capital. It’s critical for that to change so that they can get the loans they need. Are these three cities and these findings indicative of a larger trend in America? Metro centers like Houston, Los Angeles, and New York really could be the future of the country. The reason is that immigrants are no longer using these gateway cities when they arrive. They’re coming into the country and immediately settling in smaller cities and suburbs from North Carolina to Nebraska. That means we could see this kind of impact by immigrant entrepreneurs everywhere. |
