Naturalized American Enterprises

How Naturalized Citizens Pursue the American Dream Through Business Ownership

For many immigrants and their families, America is synonymous with entrepreneurial opportunity. If the U.S. draws foreigners with promises of prosperity, the American economy also benefits enormously from their efforts. Naturalized citizens founded many of the nation's most powerful businesses: Google, Yahoo, and eBay owe their existence to entrepreneurs born abroad. Still, more titans of industry hail from families from other countries: Steve Jobs' and Jeff Bezos' fathers came from Syria and Cuba, respectively. Today, 44 of the country's Fortune 100 companies were founded by immigrants or their children – a stunning testament to those who bring their talents, hopes, and dreams to America's shores.

We set out to study the state of entrepreneurship among naturalized citizens nationwide, analyzing data from the latest American Community Survey conducted by the U.S. Census Bureau. Our findings reveal the industries and cities in which businesses founded by naturalized citizens are thriving. Moreover, we analyzed how various ancestry groups have pursued particular avenues of opportunity, founding businesses in specific fields or regions of the country. For an intriguing – and inspiring – view of newcomers' impact on the American economy, keep reading.

Citizenship and Ownership

Native and Naturalized Citizen’s Work Status

When we consider the employment status of naturalized citizens relative to individuals born in the United States, we find considerable evidence for the industriousness of those who are naturalized Americans. Our data indicates that naturalized citizens are far more likely to hold a job currently, with merely 28% unemployed or outside of the workforce. Yet, unemployment rates for foreign and native-born people are roughly similar, suggesting this gap may relate to rates of attrition from the workforce. In some cases, naturalized citizens who came to America later in life are not eligible for benefits such as Social Security, meaning they can't comfortably retire like their native-born peers.

An even greater contrast emerged regarding business ownership: Naturalized citizens were twice as likely as U.S.-born citizens to work at their own incorporated businesses. In fact, naturalized citizens owned roughly 13 percent of all incorporated businesses, despite representing less than 7% of the total U.S. population. These figures reflect a recent surge: Between 2000 and 2017, the number of incorporated businesses owned by naturalized citizens increased more than 70%. This surge has particularly benefited the economies of some states. In New Jersey and New York, for example, over 40% of new businesses are founded by immigrants.

Industries of Opportunity

Top Industries for Incorporated Businesses

Some industries seem attractive to both native and foreign-born entrepreneurs. Construction and real estate ranked among the top fields for each citizenship category. Yet, naturalized citizens were especially drawn to certain industries, such as restaurants and other food services. This data point resonates with a familiar entrepreneurial narrative: Immigrants establish restaurants reflecting their culinary heritage, eventually creating thriving family businesses. Similarly, naturalized citizens were especially likely to own doctor's offices, reflecting the reality that more than a quarter of America's physicians are foreign-born.

Some businesses were even more clearly associated with owners born abroad. Strikingly, naturalized citizens were 264% more likely to own gas stations and 213% more likely to own businesses involved in hosting or data processing. In some cases, this data seems to reflect the success of migrants from specific nations. In other instances, trades have appealed to different waves of newcomers over time: Sewing and textile work has sustained new arrivals to America since at least the 19th century.

Surging Sectors

Fastest-Growing Industries

For citizens both naturalized and native-born, which business sectors have exploded since the turn of the century? For business owners born abroad, child care has been a particular area of recent opportunity: In 2017, the number of naturalized citizens owning day care facilities was over 17 times higher than in 2000. This trend comes amid a critical shortage of child care programs across the U.S., suggesting many naturalized citizens are responding to urgent market demand. Additionally, the number of naturalized citizens owning crop production businesses multiplied more than 15 times over between 2000 and 2017. These businesses frequently depend on immigrant labor as well, although workers sometimes possess only temporary work visas.

By contrast, U.S.-born business owners have driven massive growth in other sectors. From 2000 to 2017, the number of galleries or museums owned by native-born Americans increased nearly 16 times over (despite a period of financial gloom for the gallery business more generally). Similarly, the number of U.S.-born individuals owning beverage manufacturing companies increased by roughly 1,090%. This figure likely reflects the nation's craft beer boom, which has generated thousands of jobs over the last decade.

Areas of Opportunity

Surge Cities for Naturalized Citizens

In several California cities, more than a third of all businesses were owned by naturalized citizens. In El Centro and Modesto, the largest portion of these entrepreneurs hailed from just across the southern border, while Yuba City and San Jose boasted strong Asian Indian and Vietnamese business communities respectively. In fifth-ranked Miami, naturalized citizens with Cuban heritage led the way: More than half the city's population has Cuban ancestry. Meanwhile, Los Angeles is home to a large number of business owners born in Korea. Many of them likely live and work in Koreatown, the nation's largest Korean community.

Outside of America's bustling urban centers, however, entrepreneurship among newer citizens has also grown considerably in quieter pockets of the country. In Reading, Pennsylvania, where roughly 65% of residents identify as Hispanic or Latino, the number of businesses owned by naturalized citizens increased nearly 18 times over between 2005 and 2017. Pensacola, Florida, also witnessed a remarkable surge in businesses owned by naturalized citizens, as did Spartanburg, South Carolina. Yuba City and El Centro also appeared in this ranking, indicating that much of their entrepreneurship among naturalized citizens has developed quite recently.

Hard Work and Heritage

Entrepreneurial Ancestries

Among naturalized citizens who own their own businesses, which ancestry groups are most thoroughly represented? At nearly 9%, individuals of Asian Indian descent owned the greatest portion of these businesses. This entrepreneurial streak has contributed to Indian-American prosperity: The median household earns roughly $100,000, far more than groups arriving from other countries and the U.S. population at large. Naturalized citizens of Mexican and Chinese ancestry also owned over 6% of these businesses. In part, these figures reflect the flow of migration from these nations. Mexico, China, and India are the most common birthplaces for individuals who settle in the U.S.

In analyzing this data, however, it is important to distinguish ancestry and nationality. Individuals can identify with the nation in which they were born while also tracing their roots back to an entirely different ancestral group. For example, beginning in the 1960s, many Colombian families sought refuge from violence in neighboring Venezuela. As a result, children born to these migrants might possess Venezuelan nationality and Colombian ancestry.

In some cases, a striking portion of smaller ancestry groups owned businesses of their own. A quarter of naturalized citizens with Kuwaiti heritage were business owners, and real estate was the most popular field within this group of entrepreneurs. Interestingly, Kuwaiti society is defined by rigid citizenship and class distinctions: Perhaps those who move to the U.S. from that culture are particularly appreciative of America's opportunities for economic mobility. Naturalized citizens with Israeli heritage were also quite entrepreneurial. This business ethic is reflected in Israel as well: The nation possesses the world's greatest number of startups per capita.

This interactive map presents hotbeds of entrepreneurship nationwide, showing which ancestry groups account for the largest portion of businesses owned by naturalized citizens in each state. In some cases, a single group enjoys regional dominance: Naturalized citizens of Asian Indian ancestry were the leading group across much of the Eastern Seaboard, from New York to South Carolina. Naturalized citizens with Mexican heritage dominated multiple states on the southern border, including in California and Texas, the nation's two most populous states.

Elsewhere, certain ancestral groups possessed a singular presence: Salvadorans, which represent Washington, D.C.'s, largest immigrant community, accounted for the most businesses owned by naturalized citizens in the nation's capital. Business owners with Nepali heritage had a particular impact on New Hampshire, while entrepreneurs with Finnish roots were prevalent in Montana. Cumulatively, these findings suggest that enclaves of opportunity exist across the American landscape and that the efforts of naturalized citizens can significantly shape local cultures.

Empowering Your Own American Dream

We hope our findings demonstrate the enormity and diversity of immigrants' contributions to the American business landscape: From Modesto to Miami, from computer systems design to construction, naturalized citizens are injecting vitality into the American economy. In an age where many express cynicism about the feasibility of the American Dream, this evidence of entrepreneurship provides an important counternarrative.

Yet, behind each business owned by a naturalized citizen lies a history of significant sacrifice, entailing long hours, difficult decisions, and real financial risk. If America remains a land of opportunity for many naturalized citizens, it is because they have fought hard for their success.

We believe in dedicated entrepreneurs who are willing to invest in their own success. That's why FundRocket was founded with a vision to change the way businesses access startup capital. Our borrowers repay their loans as their businesses thrive, not on an arbitrary time frame. Because we're repaid through a percentage of your sales, you pay down your balance when you're doing well, with no need to stress during downtimes. We're committed to those we serve, because when they succeed, we do too.

Methodology

For this study, we analyzed data from the 2000, 2005, and 2017 American Community Survey (ACS) through the Integrated Public Use Microdata Series (IPUMS) maintained by the University of Minnesota.

The ACS is a 1-in-100 national random sample of the population. The data includes persons in group quarters. The sample data is weighted so that they are representative of the United States population. Read more about the weights used here.

We used the following variables for much of our analysis:

  • Citizenship: Indicates the citizenship status of respondents, distinguishing between native-born citizens, naturalized citizens, and noncitizens.
  • Worker class: Indicates whether respondents worked for their own enterprise(s) or for someone else as employees. For our analysis, we focused on those who worked for their own incorporated enterprises.
  • Ancestry: Respondents' self-reported ancestry or ethnic origin. This is not the country they emigrated from. We only included ancestries with 5,000 or more naturalized citizens who worked in their own incorporated enterprises.
  • Industry
  • Metropolitan area

Limitations

No statistical testing was performed, so the claims listed above are based on means alone. As such, this content is purely exploratory, and future research should approach this topic in a more rigorous way.

Not all possible industries were included in our visualization of the fastest-growing industries. We only included industries available in both the 2000 and 2017 versions of the American Community Survey. We only compared growth in metro areas for those that were available in both 2005 and 2017.

Sources

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