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Global entrepreneurs: Family matters

Posted by Chad O'Connor  May 16, 2013 11:00 AM

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The numbers tell their own story. Immigrant entrepreneurs now make up nearly 1 out of 5 of all business owners in the Commonwealth, from shopkeepers that root and revive urban main streets to biotech startups chasing the next cancer cure. Some have called the risky gesture of hope and self-reinvention that is immigration an entrepreneurial act in itself! No wonder then that immigrants in the U.S. start businesses at twice the rate of natives, or that 60 percent of new business owners in Massachusetts in 2012 were foreign born. In the Boston area alone more than 8,800 immigrant small businesses employ 18,500 people and generate $3.6 billion in regional GDP. These entrepreneurs are in fact twice global—first by virtue of their origins, second by the heightened role they play in our international trade balance, exporting goods at a 40 percent higher rate than native born business owners.

With this group of businesses—including more than a third of restaurant/food services firms and high-growth technology companies—playing such a critical role in economic growth and job creation, it is no surprise that immigrant entrepreneurs have begun to gain the attention of both business and political leaders. Their importance hasn’t been lost, for example, on the Greater Boston Chamber of Commerce, which is part of a national coalition calling for new startup visas for immigrant entrepreneurs who launch businesses in the United States that meet specific employment and financing goals.

Nor, certainly, on Governor Deval Patrick, a long-time champion of immigrant inclusion and achievement in the state, who two years ago proclaimed October Immigrant Entrepreneurship Month in Massachusetts.

Nor on State Treasurer Steven Grossman—himself the scion of a thriving family envelope business founded by his immigrant grandfather—who was the keynote speaker last week at a gala Immigrant Entrepreneur Awards Dinner hosted by the Immigrant Learning Center of Malden. Among the three award winners and dozens of nominees in three categories (Neighborhood Business, Business Growth, Science/Technology Business) were immigrants from Pakistan, the Dominican Republic, China, Haiti, Vietnam, Portugal, Nigeria and many other countries.

Finally—as those following the current debate on federal immigration reform will have noticed—the U.S. Congress is also getting in on the act: the recent reform proposal in the Senate provides for 10,000 new temporary visas to foreign-born entrepreneurs who create at least five jobs and raise at least $500,000 from investors

Treasurer Grossman’s story brings us to the issue of family, a subject of enormous if not always fully acknowledged importance for immigrant businesses, of all shapes and sizes. The ethnic “mom and pop” neighborhood store—including children stocking shelves or waiting tables after school—is almost a cliché, of course. But for immigrant-owned businesses in a wide range of sectors—and facing common barriers with regard to credit history, language proficiency, and social networks—family is the chief source not just of labor but capital. According to a recent study by the Small Business Administration, two-thirds of new immigrant-owned businesses rely on personal or family capital to get started (and more than a third for expansion capital).

Family networks also play a key in the growing numbers of immigrant transnational businesses that engage in commercial activities across borders. More generally, the extended family presence that characterizes many immigrant households and communities is a factor that has been associated with stronger levels of health, social cohesion, academic achievement and labor market attachment.

Understanding and supporting the value of these familial and economic inter-connections is more than just an academic exercise—it is a key issue in the debate over immigration reform proposals in Congress, and the future impacts of those reforms. The current Senate bill, for example, expands available visas for immigrant entrepreneurs and high-skilled immigrant professionals at the expense of the system’s traditional emphasis on family reunification, including eliminating the opportunity for naturalized citizens to sponsor foreign siblings and married children over 31 years of age for green cards. Other proposals would go even farther in reducing or eliminating family members eligible for this class of visa.

The goal of a more balanced, economically rational federal immigration policy is something all immigrant advocates support, for the sake of immigrant workers as well as the U.S. economy as a whole. But given what we know about the role of the extended family and family networks in the health of immigrant businesses and immigrant communities in general, it’s worth wondering if a narrow bias towards economic interests could actually work against those interests in the long term.

“Brains vs. Blood” is not, in short, a zero-sum game. As one economist has observed, skilled immigrants have families too. “In considering which country to move to, will an emigrating scientist be more likely to move to a country where his family members, including siblings, parents, and adult children, can also live, or to a country where only certain family members are welcome?”

Whether we see it as a source of capital, labor, business networks, or the deeper personal and community connections that root business owners and their businesses in cities, states and the country as a whole, the family side of the immigrant entrepreneurship story deserves more attention than it often gets. It takes a village to raise a child, but it may take a family to start and grow a business.

Jeff Gross is Director of the New Americans Integration Institute at the Massachusetts Immigrant and Refugee Advocacy Coalition.

This blog is not written or edited by Boston.com or the Boston Globe.
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