In American cities, helping the high-tech sector grow starts with keeping immigrants in mind, a new study shows.
Between 2000 and 2011, the immigrant labor force in high-tech industries grew about three times faster than US-born high-tech labor force (37.2 percent vs 10.7 percent). This was also true among tech entrepreneurs (where the immigrant population grew 64 percent as opposed to native-born Americans’ 22.6 percent). In a nutshell, immigrants are crucial to American entrepreneurial ecosystems.
The study showed that compared to American-born tech entrepreneurs, immigrant high-tech entrepreneurs tend to be more heavily concentrated in certain sectors and cities. Immigrant-owned high-tech businesses are mostly involved in medical technology and computer electronics; there are few of them in other high-tech fields. Furthermore, the 25 cities with the most entrepreneurs are home to about 58 percent of U.S.-born high-tech entrepreneurs but about 80 percent of immigrant high-tech entrepreneurs.
The data showed that immigrant entrepreneurs are clustered in a few sectors and cities because they have a longer list of priorities. They are not only looking for strong entrepreneurial ecosystems, which every entrepreneur is drawn to; they also want to settle and launch their businesses in diverse communities.
All entrepreneurs are more likely to start their businesses in cities with more innovation, a more educated population, and already healthy tech sector. In addition, immigrant entrepreneurs are more likely to create their businesses in cities with a large foreign-born population and high ethnic diversity. The researchers thought this might be because immigrant workers often get their start through businesses in their communities, and also because diverse cities with large immigrant populations are more likely to be friendly to immigrants and their businesses.
Based on this study, policymakers who want to promote growth in the high-tech sector should not just implement economic measures; they should also adopt policies that foster ethnic diversity and are friendly to immigrants.
Read the full study here.
Contributed by Emily Lever.