America’s New Immigrant Entrepreneurs

From the Introduction and Overview

Two of the most important questions now being debated in the U.S. are the effects of globalization and immigration on the nation’s economy. Globalization is accelerating and it is still not clear whether trends like outsourcing will erode U.S. competitiveness or provide long-term benefits. The focus of the immigration debate is on the plight of millions of unskilled immigrants who have entered the U.S. illegally. Overlooked in the debate are the hundreds of thousands of skilled immigrants who annually enter the country legally.

In 1999 AnnaLee Saxenian published a groundbreaking report on the economic contributions of skilled immigrants to California’s economy. This study, entitled “Silicon Valley’s New Immigrant Entrepreneurs”, focused on the development of Silicon Valley’s regional economy and the roles of immigrant capital and labor in this process. Saxenian’s study also went beyond a quantitative analysis to focus on the social, ethnic, and economic networks of new U.S. immigrants. One of her most interesting findings was that Chinese and Indian engineers ran a growing share of Silicon Valley companies started during the 1980s and 1990s and they were at the helm of 24% of the technology businesses started from 1980 to 1998. Saxenian concluded that foreign-born scientists and engineers were generating new jobs and wealth for the California economy. Even those who returned to their home countries to take advantage of opportunities there were building links to the U.S. and spurring technological innovation and economic expansion for California.

A team of student researchers in the Master of Engineering Management program of the Pratt School of Engineering at Duke University has been researching the impact of globalization on the U.S. economy and the engineering profession. The team is led by Executive in Residence Vivek Wadhwa, Research Scholar Ben Rissing, and Sociology Professor Gary Gereffi. Earlier research focused on the education and graduation rates of engineers in the U.S., China, and India, and an analysis of the experiences of U.S. firms engaged in outsourcing their engineering operations.

The Duke researchers were concerned about the growing momentum in outsourcing and its impact on U.S. competitiveness—and sought to understand the sources of the U.S. global advantage as well as what the U.S. can do to keep its edge. To better understand the contributions of skilled immigrants to the competitiveness of the U.S. economy, they decided to expand and update Saxenian’s study.

The goal of this research was to document the economic and intellectual contributions of immigrant technologists and engineers at the national level. To understand the economic impact, the study looked at a large sample of all engineering and technology companies founded in the last ten years, to determine whether a key founder was an immigrant. To understand the intellectual contribution, they analyzed the World Intellectual Property Organization Patent Cooperation Treaty database for international patent applications filed in the United States.