Report Shows Surge in Rate of Hispanic Entrepreneurship


Hispanic immigrants now more likely to be entrepreneurs than broader U.S. population

Washington, DCNew American Economy and the Latino Donor Collaborative today released a new report showing how the number of Hispanic entrepreneurs in America has grown exponentially over the past two decades, powering the economy during the recent recession. Hispanic immigrants in particular are now more likely to be entrepreneurs than the average member of the U.S. population overall.

“For years, it has been clear that immigrant entrepreneurs have helped grow our nation’s economy while creating jobs and keeping us competitive with countries across the world. This report reveals just how significant the contributions have been from Hispanic immigrants,” said John Feinblatt, Chairman of New American Economy. “Hispanic entrepreneurs are now playing an outsized role in business creation and powering our economy when we need them the most. We need to pass immigration reform now to spur even more entrepreneurship and keep our economy strong.”

“Most Americans remember the battle cry, ‘Damn the torpedoes! Full speed ahead!’ But only a few know those famous words were uttered by an American Hispanic, David Farragut – America’s first full admiral, at the Battle of Mobile Bay during the U.S. Civil War – whose father also fought in the American Revolution,” said Sol Trujillo, Chairman of the Latino Donor Collaborative.  “Indeed, American Hispanics have made major contributions to this nation’s wealth and well-being from the beginning of the Republic – and not just in the military but also in sports, entertainment, politics, and business. Now, with this report, we confirm that America’s Hispanic entrepreneurs are driving business formation and new job creation throughout America’s new economy. The next step is to make sure each of these entrepreneurs can be a citizen of the U.S. Full speed ahead, indeed.”

Key Findings

  • In recent decades, the number of Hispanic entrepreneurs has grown exponentially. From 1990 to 2012, the number of Hispanic entrepreneurs in America more than tripled, going from 577,000 to more than 2.0 million. This surge far outstripped population growth among the working-age Hispanic American population. It also dwarfed the growth in the number of self-employed non-Hispanics during that period, which grew by just 14.0 percent—roughly one eighteenth as fast as the Hispanic rate.
  • Hispanic immigrants, particularly those from Mexico, played a key role in this growth. Between 1990 and 2012, the number of Hispanic immigrant entrepreneurs more than quadrupled, going from 321,000 to 1.4 million. At the same time, the number of self-employed Mexican immigrants grew by a factor of 5.4, reaching 765,000. Entrepreneurship became so established among Mexican immigrants that by 2012 more than one in 10 such immigrants was an entrepreneur.
  • There are far more Hispanic entrepreneurs today than expected. In 2012 the rate of Hispanic-American entrepreneurship was more than one whole percentage point higher than we would expect based on factors like population growth, language proficiency, and family structure.1 Hispanic immigrants overcame obstacles that hinder entrepreneurship at even greater rates: Among that population, the entrepreneurship rate was 2.1 percentage points higher than expected, resulting in an estimated 251,000 additional entrepreneurs in 2012.
  • Hispanic entrepreneurs helped power the economy during the recent recession. While entrepreneurship rates among non-Hispanic, U.S.-born individuals dropped during the decade that included the recent recession, the number of Hispanic entrepreneurs grew by 71.5 percent. That made a notable difference on the U.S. unemployment rate: If the 581,000 Hispanic immigrant entrepreneurs who created businesses from 2000 to 2010 were instead unemployed in 2010, the unemployment rate would have been 0.4 percentage points higher, topping 10 percent.
  • As entrepreneurship levels have dropped in recent years, Hispanics have increasingly focused on founding new businesses. In 2012, the rate of self-employment dropped to its lowest point in decades, reaching 10.0 percent. But from 2010 to 2012, the number of Hispanic entrepreneurs grew by 160,000 people. For the entire 1990 to 2012 period, Hispanics added new entrepreneurs almost 10 times faster than the population overall.
  • Hispanic immigrants now have higher entrepreneurship rates than the U.S. population overall. While 10.2 percent of the U.S. population was entrepreneurs in 2010, 11.0 percent of Hispanic immigrants were. By 2012, that gap had widened to 10.0 percent and 11.7 percent, respectively.

This report was prepared for the New American Economy and the Latino Donor Collaborative by Marie T. Mora, Ph.D. and Alberto Dávila, Ph.D of the University of Texas – Pan American.

See the full report, “How Hispanic Entrepreneurs Are Beating Expectations and Bolstering the U.S. Economy.”

This event and report are part of the #iBuildImmigration campaign that brings business leaders across America together with New American Economy to tell Washington that we need immigration reform now.

1Our models for unexpected entrepreneurship looked at how much the actual self-employment rate exceeded what was expected, first for all Hispanics and then separately for immigrants and US-born Hispanics.  To approximate the number of unexpected entrepreneurs, the difference between the actual and expected self-employment rates was multiplied by the size of the population.  Because the expected entrepreneurship rates for immigrants, natives, and the total population were generated using separate models (one for each group), the aggregate figures for Hispanics and Non-Hispanics do not always equal the sum of the parts (e.g., in the case of Hispanics, Hispanic immigrants + Hispanic native-born). 

About NAE

New American Economy is a bipartisan research and advocacy organization fighting for smart federal, state, and local immigration policies that help grow our economy and create jobs for all Americans. More…