New insights reveal that immigrants residing in the United States have a higher propensity to initiate new businesses, with their ventures accounting for more than half of all billion-dollar startups in the nation. Despite these discoveries, the process through which immigrant entrepreneurs select their business locations remains relatively unexplored, with considerations such as immigration policies, economic climates, and cultural barriers often overlooked.
Surveys indicate that immigrant entrepreneurs tend to favor locations where they have existing personal or professional connections. Additionally, they are inclined towards regions with favorable economic conditions and supportive policies. However, the decisions may be impacted by immigration policies that either restrict or facilitate access to certain resources and opportunities.
An interesting case study is Canada’s Start-up Visa Program, initiated in 2013 to provide permanent residency to deserving entrepreneurs in an effort to attract individuals capable of establishing businesses to enhance global competitiveness. By 2018, a trend emerged where entrepreneurs based in the US began relocating their startups to Canada, drawn by the program’s strong support system, simplified visa acquisition process, and flourishing startup environment.
These relocations have led to significant growth in Canadian tech startups, stimulating innovation and job creation in the country’s ICT sector. The Start-up Visa Program effectively worked towards fostering a conducive business environment, positioning Canada as a global leader in startup immigration.
A noticeable shift in entrepreneurial choices in business locations was observed among Asian entrepreneurs, who displayed an increased tendency to move to Canada, largely due to prolonged wait times for US employment-based residency.
Immigrant entrepreneurship: Driving US billion-dollar startups
Conversely, entrepreneurs from the Middle East and Africa showed a preference for the European Union as a destination, likely due to cultural similarities and easier paths to citizenship.
Interestingly, immigrant entrepreneurs often start their businesses within ethnic communities, which offer socio-economic resources and business insights. These communities serve as initial consumer bases for new ventures, fostering trust, collaboration, and a sense of cultural identity. They also act as bridges between markets in the home and host countries, fulfilling global economic demands.
An important discovery relates to the startup survival rate of immigrant entrepreneurs. Those who relocated from the US to Canada exhibited a slightly lower survival rate, highlighting the unique challenges faced by immigrant entrepreneurs and the need for policy interventions to create a more supportive ecosystem. These challenges may involve access to essential resources, comprehension of local market dynamics, and establishment of relevant networks. However, overcoming these obstacles often leads to the development of stronger and more adaptable startups.
In essence, cultivating a diverse startup ecosystem proves advantageous for all stakeholders, fostering innovation and contributing to robust economic outcomes. Therefore, adjusting policies to address the hurdles encountered by immigrant entrepreneurs could be advantageous in further nurturing immigrant entrepreneurship.
