New Study Finds Immigrants Boost U.S. Economy, InnovationNew Study Finds Immigrants Boost U.S. Economy, Innovation

SAN FRANCISCO — Immigrant success in technology and engineering startups is making its way into every part of the U.S. economy, according to a research report to be released Thursday (Jan. 4).

From 1995 to 2005, a substantial 25.3 percent of tech companies surveyed reported at least one immigrant founder.

Duke University graduate engineering management students collected data from 2,054 companies. The resulting report, "America's New Immigrant Entrepreneurs," was co-published by Duke and the University of California at Berkeley.

Their data confirmed an expanding trend that began in Silicon Valley in the 1990s, said AnnaLee Saxenian, dean of UC-Berkeley's School of Information, an adviser to the study and author of a book about the impact of immigration titled, "The New Argonauts."

"The consequence is that these immigrants are generating new jobs and wealth for the U.S. economy," said Saxenian. Immigrant-founded companies are primarily focused in the semiconductor, computer, communications and software fields, the study found.

The least representation is in military, aerospace and environmental technology and engineering.

Founders are generally CEOs, chief technology officers or heads of development. Their companies make a sizable contribution to the U.S. economy, the study found, creating $52 billion in revenue and employing 450,000 workers during the ten-year period studied.

California, with the country's largest proportion of immigrants, also lays claim to the largest percentage of immigrant tech company founders. It has 39 percent, followed by New Jersey at 38 percent and Georgia at 30 percent.

States with less representation include Texas at 18 percent and Ohio and North Carolina, each at 14 percent.

The ethnic mix of immigrant-founded companies varies by state, but Indian immigrants top the list, accounting for 26 percent of companies with immigrant founders nationally. That total is larger than Britain, China, Taiwan and Japan combined, the study found.

In California, Indian immigrants make up 20 percent, and in New Jersey, 47 percent.

The research underscores the growing economic contribution of immigrants, said Daniel Griswold of the Cato Institute, a Washington-based libertarian think tank. "While all the focus has been on outsourcing to India, this shows how important the inflow of Indian human capital has been to the American economy," Griswold said.

Certain immigrant groups favor certain states, the research showed.

Indians entrepreneurs, for example, are concentrated in California and New Jersey, British in California and Georgia and Chinese and Taiwanese in California.

The study also looked at California's Silicon Valley and Research Triangle Park in North Carolina to examine the role of regional tech centers in engineering and technoloy growth.

Over half—52.4 percent—of Silicon Valley startups had one or more immigrants as a key founder, while California's average was 38.8 percent.

And in Research Triangle Park, 18.7 percent of startups had an immigrant founder. The rest of the state averaged 13.9 percent.

Advocates of increasing the H-1B visa quota said the Duke research bolsters their case. Skilled immigrants add value to the U.S. economy, said attorney Marcy Stras, head of the business immigration practice at the Washington-based law firm Baker Hostetler.

"I'm very happy that there's something the government can take note of that positively proves that," Stras said.

Critics of previous Duke engineering studies have asserted that the reports are primarily intended to boost political support for increasing H-1B visa quotas.