USC Price School of Public Policy

Research:

Painter co-authors study focusing on high-tech immigrant entrepreneurs

April 16, 2014
Painter-immigrant-entrepreneur-study

An open and culturally diverse environment helps promote high-tech entrepreneurship among both immigrants and the U.S.-born, according to a new research report co-authored by USC Price School of Public Policy Professor Gary Painter.

The study, released on March 25 by the Ewing Marion Kauffman Foundation, shows that immigrant-owned businesses are more likely to be located in ethnically diverse metro areas that have high foreign-born populations — an important implication for metro areas seeking to attract and retain such businesses.

painter

Study co-author and USC Price Professor Gary Painter (Photo/Tom Queally)

Titled “Lessons for U.S. Metro Areas: Characteristics and Clustering of High-Tech Immigrant Entrepreneurs,” the study also revealed that regional labor markets with greater percentages of high-tech industries and greater numbers of college graduates and patents – all indicators of innovation – tend to attract other high-tech companies.

In addition to Painter, the report’s co-authors included Cathy Yang Liu from Georgia State University and Qingfang Wang from the University of North Carolina at Charlotte.

“What remains true for immigrant high-tech entrepreneurs is that they desire to move to areas that are attractive to all high-tech companies and that they continue to move to areas that are friendlier to all immigrant populations,” said Painter, who directs the graduate programs in public policy at USC Price. “This suggests that anti-immigrant policies can have important negative impacts on the size of the high-tech industry in places.”

Immigrants composed 20 percent of the high-tech work force and more than 17 percent of high-tech entrepreneurs between 2007 and 2011, according to the study, which used the American Community Survey. This represents an increase of 13.7 percent and 13.5 percent, respectively, from 2000.

Between 2000 and 2011, the number of self-employed immigrants in high-tech industries increased by 64 percent, compared with 22.6 percent for U.S.-born.

Immigrants’ impact on high-tech entrepreneurship varies according to country of origin, the study found. Since the start of the 21st Century, immigrants from Colombia, China, India, Korea and Vietnam expanded the number of the self-employed in high-tech industries. In contrast, the number of high-tech entrepreneurs from Iran, England, Mexico, Germany and Cuba stagnated.

The authors found that, compared to high-tech businesses owned by those who are U.S.-born, immigrant-owned high-tech businesses are more concentrated in industry categories such as semiconductor; other electronic components; magnetic and optical media; communications; audio/video equipment; and computer science-related sectors.

The paper also notes that immigrant high-tech entrepreneurs are concentrated in a smaller number of metropolitan areas. Eighty percent of immigrant high-tech entrepreneurs operate in the largest 25 metropolitan areas, compared with 57 percent of their U.S.-born counterparts.

The report lists the top 25 Metropolitan Statistical Areas by their share of high-tech entrepreneurs, immigrant and U.S. born. The New York, Los Angeles and San Francisco metropolitan areas account for about one-third of all immigrant high-tech entrepreneurs in the country in 2011. In addition, metro areas registering substantial growth over the last decade include Atlanta, Chicago, Fort Lauderdale, Houston, Miami, Riverside and Washington, D.C. Meanwhile, the metro areas in the Silicon Valley – San Francisco and San Jose – did not experience substantial growth.