Immigrants have consistently played a crucial role in the U.S. economy, contributing to business formation, job creation, and innovation.
Their entrepreneurial spirit has powered both small businesses and billion-dollar corporations, fueling economic growth across multiple industries.
In 2013 alone, immigrants contributed $1.6 trillion to the U.S. gross domestic product (GDP), and their impact has only grown since according to the Center of American Progress.
However, despite their undeniable contributions, immigrants face systemic barriers that limit their full economic potential. Restrictive immigration policies and legal uncertainties prevent millions from participating in the formal economy.
Policies such as Deferred Action for Childhood Arrivals (DACA) and Deferred Action for Parents of Americans (DAPA) could help bridge this gap by allowing more immigrants to integrate into the workforce, generate tax revenue, and contribute to economic growth.
Immigrant Entrepreneurs: Economic Contributions
Immigrants are significantly overrepresented in entrepreneurship. A Kauffman Foundation report found that 28% of all new entrepreneurs in the U.S. are immigrants, despite accounting for only 15% of the total population. Their impact is evident across multiple datasets:
| Year | Share of Immigrant Entrepreneurs |
| 2007 | 19% |
| 2014 | 24% |
| 2019 | 24.2% |
| 2020 | 28.9% |
| 2025 | 30% (estimated) |
The Longitudinal Employer-Household Dynamics (LEHD) database indicates that immigrant entrepreneurs are particularly prevalent in high-tech industries. In fields such as artificial intelligence, biotechnology, and venture-backed startups, immigrants make up over 40% of company founders.
Economic Impact of Immigrant-Owned Businesses
- Job Creation: Immigrant entrepreneurs employ 1 in 10 private-sector workers in the U.S.
- Exports: Immigrant-led businesses are 60% more likely to export than native-owned firms.
- High-Growth Startups: 44 out of the 87 U.S. startup companies valued over $1 billion were founded by immigrants.
- Innovation: Immigrant-led firms generate more patents per worker, driving technological advancements.
Case Study: Immigrants in the Tech Industry
A Reuters study found that 24.3% of engineering and technology companies had at least one immigrant founder. These firms have generated $75 billion in revenue and created over 650,000 jobs in the past decade.
One of the most notable examples is ScaleAI, an artificial intelligence startup founded by an immigrant entrepreneur. Since its inception in 2018, the company has reached a valuation of $4.5 billion and employs over 3,000 engineers and data scientists across the U.S. and Canada.
Tech Startups: Immigrants founded 34% of U.S. engineering and tech companies from 1995–2005, including 52% of Silicon Valley startups
— Sam Shawki (@sshawki) December 28, 2024
The Role of Immigration Policies in Business Growth
Immigration policies play a critical role in fostering or restricting immigrant entrepreneurship. Countries with startup visa programs and points-based immigration systems have witnessed higher rates of immigrant business formation.
| Country | Startup Visa Policy | Immigrant Entrepreneurship Rate |
| U.S. | Limited options (e.g., H1-B, O-1) | 28% |
| Canada | Startup Visa Program | 35% |
| U.K. | Innovator Visa | 32% |
| Australia | Business Innovation Visa | 33% |
Case Study: The Global Entrepreneur in Residence (GEIR) Program
Massachusetts launched the Global Entrepreneur in Residence (GEIR) Program to help immigrant founders stay in the U.S. despite visa challenges.
- Helped over 300 new companies get started.
- Created 5,200 new jobs in Massachusetts.
- Raised $2.1 billion in venture capital.
Revitalizing Local Economies Through Immigrant Businesses
Immigrants play a crucial role in revitalizing economically struggling communities. Many open businesses in neighborhoods experiencing population decline, helping to bring economic recovery.
Case Study: St. Louis Mosaic Project
- Microloans for immigrant entrepreneurs.
- Mentorship programs connect immigrant business owners with established entrepreneurs.
- Collaborations with local chambers of commerce to create an inclusive business ecosystem.
Similar initiatives in Detroit and Cincinnati have led to an increase in immigrant business ownership and economic revitalization.
The Role of Immigrants in Small Businesses
Immigrant entrepreneurs play a key role in Main Street businesses, which are essential for local economies.
| Business Type | Percentage Owned by Immigrants |
| Grocery Stores | 45% |
| Nail Salons | 51% |
| Restaurants | 37% |
| Dry Cleaners | 44% |
| Gas Stations | 55% |
Case Study: Small Business Success
Enrique Castañeda, a Mexican immigrant, founded Above and Beyond, a cleaning company, in 1992 with only $1,000 according to EScolarship. His company now employs 20 people and has expanded into biohazard and crime scene cleaning, showcasing the resilience and adaptability of immigrant entrepreneurs.
The Economic Impact of Unauthorized Immigrants
Unauthorized immigrants also contribute significantly to the U.S. economy. Despite not having legal status, they pay taxes, strengthen Social Security, and participate in the labor force.
Economic Contributions of Unauthorized Immigrants
| Economic Area | Annual Contribution |
| State & Local Taxes | $11.64 billion |
| Payroll Taxes (Social Security) | $13 billion |
| Additional Revenue if DAPA/DACA Expanded | $805 million |
| Potential GDP Growth if Fully Legalized | $1.2 trillion over 10 years |
| Job Creation from Legalization | 145,000 new jobs annually |
- Bring 4 million people into the formal economy.
- Increase wages for all workers.
- Generate $230 billion in additional GDP over 10 years.
Case Study: Economic Potential of Legalization
- Add $2.1 billion in state and local tax revenue annually.
- Increase GDP by $1.2 trillion over a decade.
- Create 145,000 new jobs per year.
Conclusion
Immigrant entrepreneurs are a fundamental driver of economic growth, job creation, and innovation in the United States. Their contributions span from small neighborhood businesses that sustain local economies to billion-dollar tech startups that position the country as a leader in global innovation.
The data is clear: immigrant-owned businesses not only provide employment opportunities but also enhance exports, strengthen Social Security through tax contributions, and bring new ideas and technologies to market.
Immigrant entrepreneurs have significantly contributed to the economic growth of many urban areas, including some of the fastest-growing cities in North America. Cities like Atlanta, Charlotte, and Dallas-Fort Worth have seen rapid population increases, partly due to the influx of immigrant-owned businesses that stimulate local economies.
References
- Center for American Progress – How Immigrants Positively Affect the Business Community and the U.S. Economy
- Kauffman Foundation – Who is the Entrepreneur? United States 1996-2021
- Reuters – One-Quarter of U.S. Tech Start-Ups Founded by an Immigrant
- State of Connecticut General Assembly – GEIR Working Group Report
- eScholarship – The Economic Contributions of Immigrants in the United States
- Institute for Taxation and Economic Policy (ITEP) – Undocumented Immigrants and Taxes 2024