Friday, September 14, 2007

Immigrants and Entrepreneurship

The Kauffman Foundation is an organization in Kansas City, Missouri, that promotes entrepreneurship. Its Index of Entrepreneurial Activity measures business startup activity for the entire U.S. adult population at the individual owner level.

According to its study, the rate of entrepreneurial activity for native-born Americans was 0.28% in 2005. The rate for immigrants was somewhat higher, at 0.35%.

Why are immigrants more likely to start up their own businesses? Michael Mandel, chief economist of BusinessWeek, provides an explanation:

The conventional explanation is that immigrants, by nature, are greater risk-takers and more energetic – or else they would have stayed in their home countries. And because they are not integrated into existing social networks, it’s easier for them to try something new.

(Source: What It Means to Hit 300 Million)

Some of the most famous immigrant entrepreneurs are Jerry Yang of Yahoo!, Sergey Brin of Google and Steve Chen of YouTube. Andy Grove was the third employee of Intel.

Closer to home, immigrants might have shaped the economy of Malaysia. Chinese migrated to Malaysia in the 19th century and first half of 20th century, with the single purpose of making money. Many of them worked as coolies in tin mines, but went on to start up their businesses. Though being minority in their host country, ethnic Chinese dominated business sector until 1970s.

Of course, Malaysian government will never acknowledge the Immigrant Factor, and instead blame the former colonizer, Britain, for the income disparity across ethnic groups. Ethnic Chinese, on the other hand, are already well into third or fourth generation. A big question is: have they inherited the entrepreneurial spirit of their forefathers???


  1. I would said our entrepreneurial spirit of our forefathers is much weaker now entering the 3rd and 4th generation. However speaking of it, we have enter another zone which is different. As for myself, living in my own means, being independent & being happy means the most to me. I am pretty simple, but pretty happy.

    That's all that matters right?

  2. princess,
    Perhaps you are right. I often think that the earlier generation of Chinese Malaysians worked too hard. They opened their shops 364 days a year - only closed on Chinese New Year.

    But then, we now enter an era when there is no job security. (Still remember Narayana Murthy's advice?) Entrepreneurial spirit can come in handy when the company no longer loves us.

  3. Yeah I agree with you. So what is your take/backup plans if something happen to your job? I think personally I can afford not to work for a time being with my savings and living in the comfort of my family (but that will be my last, last, last resort). However, I believe with my knowledge, adaptability & capabilities, there are other options than my current job. People can take everything away from you, but not your knowledge, dignity & pride (that's my call).

    I wanna enjoy life, I wont be like my ancestors. I am not ambitious, but I dun wanna rely on others. I want to have a simple, happy life....

  4. Wow, princess,
    It sounds like you are a little wealthy woman.

    I work in a fast-changing industry where knowledge becomes outdated fast. Furthermore, my work is 'machine-dependent' and highly specific, which limits my future choice of employment. I also want to enjoy life, but can't do so yet...