‘All Immigrants Are Entrepreneurs’*

Philippe Mustar, professor at Mines Paris-PSL,** writes that “immigrants are an opportunity for the countries that welcome them” and points out the major role they play in the success of entrepreneurship in the United States.

The immigration debate overlooks the contribution of entrepreneurial immigrants to the economies of their host country. A recent study by the National Foundation for American Policy (2022) on the origins of those who found “unicorns,” unlisted startups valued at more than $1 billion, shows not the importance but rather the prominent role immigrants play in creating them. In the United States, more than half of such unicorn startups (319 out of 582, or 55%) were founded or cofounded by one or more immigrants. When you take not only immigrants, but also their children into account, that percentage increases to 64%. And when you widen the spectrum to include immigrants who are not founders but hold a key management position in a company (as CEO or vice president of technology), that number reaches to 80%. Indeed, immigration plays a massive role in entrepreneurial success in the United States.

Furthermore, the analysis of these 319 companies indicates that 58% of them had one or more immigrant founders and none who were native-born, that 28% of them had a majority of immigrant founders or an equal number of immigrant and native-born founders, and that only 14% had a majority of native-born founders. As stated in the study: “Given that each cofounder contributes to a startup company’s success, it appears likely that none of the billion-dollar companies with at least one immigrant founder would exist or have been created in the United States if the foreign-born founder had not been allowed to come to America.”

These immigrant entrepreneurs drive innovation and the American economy: their 319 unicorns each created 859 jobs on average and at the time of the study, represented a total value of $1.2 trillion.

However, the relationship between immigration and entrepreneurship is not limited to these unicorns, which despite attracting a lot of attention, represent only a tiny slice of business creation. An older study, conducted by the Center for Entrepreneurs in London, also emphasized the very important impact of immigrants: In the United Kingdom, one out of seven companies (of all types) was founded or cofounded by immigrant entrepreneurs. Their entrepreneurial activity is almost double that of people born in the United Kingdom.

The study also looked in detail at the contribution of these entrepreneurs to the segment of companies with revenues of less than $238 million: Businesses founded by immigrants employed 1.16 million people out of a total of 8.3 million and were responsible for 14% of jobs created in these small and midsize enterprises of varying sizes. It’s a far cry from the image of immigrants arriving in the United Kingdom to take jobs from the locals.

Integration through Work

In 2021, a study using the company database Legalstart (which has managed the process of several hundred thousand entrepreneurs) showed that foreigners (more than two-thirds of whom were non-Europeans) participated in 15% of business startups in France, comparable to that of the United Kingdom.

Finally, the link between immigrants and entrepreneurship is also established through self-employment status. According to statistics from Eurostat, out of 25.8 million people of working age who were self-employed in the European Union in 2020, 2.8 million were born abroad (overwhelmingly outside the EU). On average — this percentage varies by country — self-employment represented about 14% of total jobs in the EU; for immigrants, this rate is comparable (or slightly lower). Thus, self-employment is also one of the ways in which immigrants integrate into the labor market.

In many countries, immigrants are job creators, not only of their own jobs, but sometimes they create a multitude of jobs for everyone. However, entrepreneurship, academically defined, is a field that covers much more than business creation: It involves the creation of new activities in various contexts (one can be an entrepreneur by creating a new company, but also within an existing company, institution or association). In this sense, all immigrants are entrepreneurs because it takes strength, courage, will and tenacity to leave behind everything that is familiar and to take risks, sometimes crazy risks, in the hope of a new beginning, and in order to, eventually, pursue a life project.

That is why immigrants are an opportunity for the countries that welcome them — we see this every day in health care or so-called “invisible” jobs — and they deserve to have integration policies worthy of their aspirations.

* Editor’s note: The original language version of this article is available through a paid subscription.

** Editor’s note: Mines-PSL, officially École nationale supérieure des mines de Paris, is one of the oldest French higher education institutions in engineering.