October 2, 2012
Throughout American history, immigrants have been a vital source of economic growth, contributing ideas, innovation, wealth and a steady supply of vibrancy. This has helped position the United States as a central node in the global system of what my Kauffman colleague Ben Wildavsky calls “brain circulation.” The movement of people and ideas in and out of the country is a major reason why the United States will remain a leading global economy as less dynamic countries — namely in Europe — shrink in importance.
Worryingly, however, a new Kauffman Foundation report shows that one important mechanism for this brain circulation — immigrant entrepreneurship — may be weakening. For decades, even as American opinion has ebbed and flowed regarding immigration, individuals from around the world have always treated the United States as the mecca of entrepreneurship and come here to start companies and create jobs.
The new report, coauthored by Vivek Wadhwa, AnnaLee Saxenian and Daniel Siciliano, finds that immigrant entrepreneurship has fallen in recent years in high-tech areas of the economy. According to their prior research, from 1995 to 2005, immigrants founded one-quarter of technology and engineering companies in the United States. In Silicon Valley, the share was over half.