By: Leigh Buchanan, Inc.
Almost half of America’s corporate titans were founded by first- or second-generation immigrants. And in the future, say the authors of a new study, the country’s economic fortunes will continue to depend on its willingness to welcome entrepreneurial talent from around the world.
Forty-three percent of founders of the 2017 Fortune 500 are immigrants or the children of immigrants, according to the Center for American Entrepreneurship (CAE), a nonpartisan research and advocacy organization based in Great Falls, Virginia. First- and second-generation immigrant founders are even more common among the largest corporations: 48 percent for the top 60 companies and 57 percent for the top 35. (Fortune measures the businesses by total revenue.)
The large number of immigrants among Fortune 500 founders was first documented eight years ago by an organization called New American Economy. That study put the figure at 40 percent. Almost a quarter of companies on the list have changed since then, prompting CAE’s update.
CAE counted only founders whose country of origin it could independently verify. It also disqualified a number of people known as immigrant entrepreneurs on the grounds that they had not technically founded their companies. (Hungarian-born Andy Grove, for example, did not make the cut because he joined Intel on the day of its incorporation.) “We were so conservative that the true percentage might well be closer to 48 or 49 percent,” says CAE president John Dearie.
Trying to deepen the talent pool
Immigrant-founded Fortune 500 companies employ 13 million people around the world and have combined revenue of $5.3 trillion. They are located in 68 metro areas across 33 states. “There is no category of immigrant of higher economic value than a foreign-born entrepreneur who wants to come to the United States and start their business here,” says Dearie.
The contribution of immigrants to the U.S. economy is once again front and center. Democrats are demanding that legal rights for so-called dreamers who were brought to the U.S. illegally as children be part of the spending bill Congress must pass this week to keep the government open. The Startup Act, which among other things would create a special visa for entrepreneurs, was reintroduced in September by Senators Jerry Moran (R-KS) and Mark Warner (D-VA). And last Friday a U.S. district judge ruled that the Department of Homeland Security lacked cause to delay a program meant to admit foreign founders, which the Trump administration shelved in July.
Dearie says he hopes the study’s findings will influence policymakers on these and other issues. In conversations on Capitol Hill, he’s found members of Congress generally supportive of admitting more entrepreneurial immigrants, he says. But some Republicans demand that any increase in that number be offset by reductions in other categories of immigrants, which is a nonstarter with Democrats.
Other countries are far more open to foreign talent. Some governments, like Chile’s, even supply startup capital. In the United States just 15 percent of green cards are awarded because applicants have skills wanted by employers , while the rest are given to applicants because they’re related to a citizen. Elsewhere, those numbers are flipped.
“Look at the list of companies in this study: 216 of the most famous corporate names in the country,” says Dearie. “If the mantra is ‘America First’ on the Republican side, what could be more America First than ensuring that the next generation of these great, iconic companies are started here instead of somewhere else?
“Trump, if he wanted to, could be the president who achieves a breakthrough in this regard because of the credibility on border security that he enjoys among Republicans in Congress,” says Dearie. “We are hoping very much that he will.”