Immigrants: Key U.S. Business Founders

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Entrepreneurs born overseas play a key role in creating new companies in the crucial fields of science, technology, and engineering, but most of these immigrants do not move to America expecting to start businesses. The majority come for better education and jobs, and found their companies years later. That's according to a new study set to be released on June 11, the second of a series on skilled immigrant entrepreneurs.

But if immigrants educated in the U.S. don't have a chance to stay once they get their diplomas, would-be entrepreneurs take their skills back to their home countries—where they compete with U.S. companies instead of founding them, says Vivek Wadhwa, lead author of the study and an executive-in-residence at Duke University.

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Research Wadhwa released in January showed that one out of every four science, tech, and engineering businesses founded between 1995 and 2005 had at least one immigrant as a key founder—many from India, China, Taiwan, Britain, and Japan. Together those companies had $52 billion in sales and employed 450,000 people in 2005. The latest study, sponsored by the Kauffman Foundation, revisited 144 of those immigrant entrepreneurs to learn who they are and why they came to America.

The research team found a highly educated, science- and tech-oriented group. Three-quarters of them had graduate degrees, and the same proportion studied science, technology, engineering, or math. More than half of the foreign-born founders completed their highest degrees at American universities.

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[Wadhwa] says the current caps on the number of permanent resident or green cards given to foreigners here on student- and skilled-worker visas could stall growth in the science and tech sector—and send smart, would-be entrepreneurs overseas.

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"Indians and Chinese are increasingly going back home after they graduate," Wadhwa says, because of growing opportunities in those countries. "H-1Bs are not the solution. We want to give people permanent residency so they can build companies."

http://www.businessweek.com/print/smallbiz...0608_805263.htm