Immigrant Entrepreneurs Behind 25% of U.S. Startups: Duke Study

Immigrant entrepreneurs founded 25.3% of the tech startups in the past decade and foreign nationals -- those living in the United States who are not citizens -- contributed to an estimated 24.2% of international patent applications in 2006, according to a new study from Duke University. 

For the study "America's New Immigrant Entrepreneurs," a student research team of 18 at Duke's Master of Engineering Management Program contacted thousands of engineering and technology companies founded between 1995 and 2005 to determine if the CEO or lead technologist was an immigrant, and to determine that person's national origin. More than 2,050 companies participated in the telephone survey.

Key Findings on Immigrant Tech Startups:

  • There was at least one immigrant key founder in 25.3% of engineering and technology companies founded between 1995 and 2005.
  • Together this pool of immigrant-founded companies was responsible for generating an estimated $52 billion in 2005 sales and creating just under 450,000 jobs as of 2005.
  • Almost 26% of all immigrant-founded companies in the past 10 years were founded by Indian immigrants, more than the combined United Kingdom (7.1%), China (6.9%) and Taiwan (5.8%) immigrant-founded businesses.
  • California and New Jersey represented hot spots for immigrant-founded engineering and technology businesses; 
  • 81% of businesses founded by immigrants from Taiwan were located in California.
  • Almost 80% of immigrant-founded companies in the US were within just two industry fields: software and innovation/manufacturing-related services. They were most highly represented as founders in the semiconductor, computer, communications, and software fields.

  • 52.4% of Silicon Valley startups had one or more immigrants as a key founder, compared with the California average of 38.8%. 

Key findings on patents filed:

To understand the intellectual contribution of skilled immigrants, the Duke team analyzed the World Intellectual Property Organization Patent Cooperation Treaty database for international patent applications filed in the United States. 

  • Foreign nationals residing in the United States were named as inventors or co-inventors in 24.2% of international patent applications in 2006. 
  • This percentage increased dramatically from 7.3% in 1998. This count does not include immigrants who became U.S. citizens before filing a patent application. 
  • The largest group of contributors was of Chinese origin. They were followed by Indians, Canadians and British.

The study, conducted by a student research team at Duke's Master of Engineering Management Program. The Duke research team of 18 students from the Master of Engineering Management Program was led by Vivek Wadhwa, executive in residence at the Pratt School of Engineering's Master of Engineering Management Program.

The study report, "America's New Immigrant Entrepreneurs," is available on Duke Website (pdf).

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