The Power of Immigrant Entrepreneurship: A Driving Force in Business Innovation

Entrepreneurship is the principal strength behind economic development and innovation, contributing to job creation and wealth generation. For example, the Canadian business sector currently can engage approximately 12 million individuals. Among them, around 2.7 million are self-employed/entrepreneurs, providing jobs to about 800,000 employees. Thus, it is relatively easy to see how entrepreneurs are at the heart of the economic ecosystem in the modern globalized world. But the question is whether the sectors rely more on immigrants or non-immigrants. Being a child of immigrant parents and a Canadian businessman, I understand the significance of both - immigrant and non-immigrant entrepreneurship in driving economic growth and innovation and feel that comprehending the contrasts is crucial for policymakers, aid organizations, and aspiring entrepreneurs to design tailored strategies and agendas that promote entrepreneurship across both groups and maximize their contributions to the global economy. Let me delve into the distinctions between immigrant and non-immigrant entrepreneurship, highlighting specific pointers and regional variations.

Immigrant and non-immigrant entrepreneurs

Immigrant entrepreneurs migrate from one country to another to establish and run thriving businesses. They are typically motivated by economic opportunities, resource access, and the desire for a better life. What is unique about this set of people is how they bring diverse cultural backgrounds, languages, and traditions, enabling them to tap into niche markets and serve specific communities. Possessing international networks spanning borders and facilitating cross-cultural collaborations and trade opportunities helps them grow and thrive. Opening a business in a foreign country comes with unique challenges, such as accessing resources, language barriers, limited credit history, or unfamiliarity with local business practices. However, immigrants often compensate for these challenges by tapping into their ethnic networks, securing funding from immigrant-focused organizations, and leveraging the support of immigrant communities. According to the Statistics Canada 2016 Census, 33% of all business individuals who provide wages to their crew are immigrants. In the neighboring US, 24.9 percent of all new business owners are immigrant entrepreneurs.

They have produced critical local jobs in all domains of the economy, such as construction, professional services, the healthcare industry, and retail businesses. The famous Asian grocery chain T&T, for example, generated more than a thousand jobs in Canada. Born in Taiwan, Cindy Lee graduated with a major in accounting in Taiwan and migrated to Canada in 1976. She founded T & T Supermarket , the largest chain known for selling Asian foods. After Cindy Lee's retirement, her daughter is now the CEO and a corporate counsel for Thrive Market.

On the other hand, non-immigrant entrepreneurs start businesses within their home country, where their ventures are naturally rooted in their local community and influenced by market demand, personal interests, and available resources. While chances are that they would also operate in diverse communities, they are more likely to leverage associations within their country or region. This confines their exposure to international markets and potential associations with businesses from different cultures. However, they often have a significant edge in accessing resources. They can take help from established networks and leverage existing connections and local support systems to launch and grow their ventures. Non-immigrant entrepreneurs also benefit from policies and support systems within their home countries, but these are usually more focused on promoting local entrepreneurship and small business growth. Citizens or permanent residents also do not encounter the same legal and administrative hurdles as immigrant entrepreneurs.??

A study by the Census Canada conducted in 2016 stated that 11.9% of immigrants aged between 25-69 years owned private firms or were self-employed, contrary to the second-generation non-immigrant entrepreneurs who stood at 10.1% and third-generation non-immigrant founders at 8.4%. Another study based on job-creation data in Canada used data spanning 2003-2013 and observed that the net job creation is higher (25%) among immigrant-owned firms than non-immigrant individuals.?

These statistics illustrate the distinction between the two classes in the business sector. Given the fair opportunity, space for diversity, and inclusive environments, societies can unlock the full potential of immigrant and non-immigrant entrepreneurs, leading to a thriving entrepreneurial ecosystem.

The Power of Non-Citizen Entrepreneurs Driving Progress in the World Economy

As already mentioned, non-citizen entrepreneurs usually have a fair bit of understanding of their home country's and host country's markets. This knowledge lets them bridge cultural gaps and intelligently penetrate new markets. Through their ventures, they establish businesses, expand operations, and create sizable employment opportunities, stimulating local economies, improving living standards, and reducing unemployment rates. Creating jobs within their companies creates a ripple effect in supply chains and supports other industries. They bring diverse stances and expertise to the table, driving technological advancement and innovation, new ideas, and business models. By contesting existing norms, immigrant entrepreneurs foster competition, stimulate innovation ecosystems, and bring international collaboration, partnerships, and trade connections in their host countries, contributing to overall progress and economic growth. International trade opens doors to new markets, investment opportunities, and knowledge exchange. The capacity to merge different business cultures and navigate complex global trade networks is valuable in driving global economic integration. Immigrant entrepreneurs share their expertise, entrepreneurial mindset, and industry-specific knowledge by engaging with local skills. Knowledge transfer always enhances the skills and capabilities of the local workforce, contributing to human capital development and creating a culture of entrepreneurship and innovation in the host country.?

Through their entrepreneurial ventures, they create platforms for social integration, cultural exchange, and diversity appreciation. They act as cultural ambassadors, promoting understanding and respect among different communities. Additionally, they often engage in philanthropic activities, supporting local community initiatives and social causes, contributing to societal well-being and cohesion.?

Immigrant entrepreneurs are more adaptable and resilient. Opening a firm in a foreign land invites understanding unfamiliar legal, cultural, and market landscapes. Their ability to overcome these obstacles demonstrates their determination, flexibility, and problem-solving skills.?

An Indian immigrant, Maninder Dhaliwal P.Eng. ICD.D , migrated to Vancouver in 1999. Although she came as an aspiring engineer, started her Master's and even got a job, she felt this was not what she wanted. She decided to step into the non-profit sector as an Executive Director. Later in 2013, she co-founded Lions Gate International , known for health care, technology, and manufacturing projects. A winner of ‘Canada’s Top 40 under 40’, Dhaliwal faced numerous challenges, including, but not limited to, unavailability of strong local networks and resources. Being a newbie in town, she did not know like-minded people. She moved out of her comfort zone to overcome this and started networking with other ethnic groups. She strongly believed that to grow, you need to move out of your comfort zone. Today, she advises young immigrants to connect with other nationalities to open doors for all business resources required to start a firm.?

Fulfilling social and environmental responsibilities as mentors and role models

The service of immigrant entrepreneurs goes beyond economic contributions and actively giving back to society. They leave a lasting impact on their host countries through job creation, economic growth, innovation, cultural enrichment, and social responsibility, building an environment that encourages their continued contributions and creates opportunities for entrepreneurial success.

Besides creating a positive shift in the economic paradigm, immigrant entrepreneurs function as inspirational figures and mentors within their communities. They provide guidance, support, and mentorship to aspiring entrepreneurs, particularly among immigrant folks. Sharing their adventures in the entrepreneurial ecosystem, they empower others to pursue entrepreneurship, build economic prospects, and attain their full potential. They act as role models, inspiring future generations to believe in their abilities and concocting entrepreneurialism. Numerous immigrant entrepreneurs prioritize social and environmental obligations and ethical practices in their industry practices. Their participation in initiatives promoting sustainability, community development, and corporate social responsibility contributes to a more sustainable and inclusive society.

A classic example is Ronnie T. , who migrated from India to Canada at 22. He built a series of e-commerce businesses from scratch before turning 30 and currently manages over fifteen websites. A public speaker, and a startup advisor, he offers his wisdom to budding entrepreneurs through podcasts.?

Why do immigrant entrepreneurs exit ventures more than non-immigrant entrepreneurs?

While immigrant entrepreneurs make up a considerable fragment of the entrepreneurial ecosystem and contribute significantly to the business landscape, studies show that nearly 11.5% of immigrants quit their businesses in a year. The percentage reduces to 3.9 after seven years; however, immigrants continue to bring an end to businesses faster than compared to the local sharks. The higher exit rate among immigrant entrepreneurs can be accredited to various economic, cultural, social, legal, and psychological aspects, such as:

• Limited access to funds, higher borrowing costs, and monetary limitations may confine their ability to support and grow their businesses. Immigrants may also face barriers in acquiring funding from traditional sources due to limited credit history or unfamiliarity with local financial systems.

• Cultural and social aspects such as language differences and a lack of social networks can curb their business success. Structuring connections and confidence within the regional business community usually takes a lot of time, and without dedicated networks, they may struggle to find critical support, partnerships, and mentorship opportunities.?

• Additionally, navigating legal and regulatory frameworks is often more complex for immigrant entrepreneurs than for their non-immigrant counterparts. Compliance with various administrative requirements and licensing processes can be time-consuming and costly, putting strain on them.

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As a result, immigrant entrepreneurs may feel pressured to exit their businesses when faced with hardships rather than striving through adversity. While immigrant entrepreneurs bring valuable skills, experiences, and diversity to the business landscape, it is crucial to recognize and address the challenges they face. Providing targeted support, such as access to capital, mentorship programs, business networking opportunities, and assistance navigating legal and regulatory processes, can help mitigate these challenges and increase the likelihood of long-term success for immigrant entrepreneurs.?

Government's responsibility for a thriving entrepreneur ecosystem?

Recognizing the value of immigrant entrepreneurs is of utmost importance. Governments everywhere should have an active interest on this front as the success of immigrant entrepreneurs not only enhances economic growth but also supports diversity, cultural exchange, and social cohesion. Governments worldwide are increasingly implementing strategies to attract and encourage immigrant entrepreneurs.?

The Canadian government runs programs for easy immigration to Canada and encourages people to start up companies to generate jobs. For example, the Federal Startup Visa Program is one of the programs where the government invites immigrant entrepreneurs to collaborate with private sector firms for funds, guidance and to learn how to operate in Canada. Through the Canada Startup Visa alone, Canada welcomed nearly 420 immigrants in 2022, three times more than in 2021. Another example is the Quebec Entrepreneur Program, which lets eligible business proprietors and leaders receive Canadian PR upon creating commercial, agriculture, or any industrial business within the Quebec province. The country also offers a number of entrepreneur categories through its Provincial Nominee Programs to let immigrant business people settle in a particular region.

Additionally, streamlining startup visa programs can facilitate access to capital and resources for immigrant entrepreneurs by establishing special funds or grants specifically targeting immigrant entrepreneurs. Financial assistance, incubator programs, and mentorship initiatives can help immigrant entrepreneurs overcome initial funding challenges and support business development and growth.?

Another important thing is providing language and cultural integration to help immigrant entrepreneurs overcome communication and cultural barriers. Command in the local language is vital for effective business operations and networking. Programs specific to language training and cultural orientation can be powerful tools to enhance immigrant entrepreneurs' integration and improve their likelihood of success. Governments can also promote networking and collaboration prospects by arranging events and trade fairs that bring together industry professionals and investors. Clear and consistent policies regarding immigration, business regulations, taxation, and intellectual property rights deliver assurance and reduce the risks, nurturing them to invest their skills, resources, and ideas in the host country.

In conclusion, as entrepreneurs, we are guided by passion, resilience, and an obligation to shatter the glass ceiling. Over the course of this article, we have examined the diverse elements of the immigrant entrepreneurial journey and its enormous influence on the global economy. Possessing a distinctive blend of cultural diversity, global networks, and international experiences facilitates this group to think outside the box and contribute to the rich tapestry of business innovation. With the support of governments, communities, and fellow entrepreneurs, these people can continue to flourish by harnessing the power of immigrant entrepreneurship, bringing forth a future built on ingenuity, teamwork, and shared prosperity for all.