On the rise: Immigrant entrepreneurs

@CNNMoney May 8, 2012: 9:17 AM ET
Immigrants like Maribel Lieberman, who launched a gourmet chocolate company, are twice as likely to create a firm than those born in the United States.

Immigrants like Maribel Lieberman, who launched a gourmet chocolate company, are twice as likely to create a firm than those born in the United States.

NEW YORK (CNNMoney) -- Working for a new company? There's a more than one-in-four chance your new boss wasn't born here.

Immigrants created 28% of all new firms last year. They were also twice as likely to start a new business when compared to those born in the United States.

It's a notable shift. Nearly all new firms are small, and many are hiring new workers, seeking small business loans and shaking up established industries.

What's behind the rise of immigrant entrepreneurs?

For one, immigrants are over-represented in lower wage sectors like construction, which was hard hit during the economic crisis, according to Rob Fairlie, a professor at the University of California-Santa Cruz.

But they need to pay bills like all the rest, and so they have turned to entrepreneurialism, Fairlie said.

"Recession drove low-skilled workers into figuring out what to do," said Fairlie, who authored a recent report for the Kauffman Foundation.

He said the same applies to Hispanics, who are creating new businesses at a faster clip than any other ethnic group. Hispanics make up more than half of the nation's 40 million foreign-born, and they are starting businesses at a rate that exceeds even their population growth.

DeVere Kutscher, chief of staff at the U.S. Hispanic Chamber of Commerce, said Hispanics are playing a key role in the recovery.

"Hispanic entrepreneurs are driving economic development, and their enterprises are creating jobs and helping lead the country out of recession," Kutscher said.

The new face of small business: The figures in the Kauffman Foundation report, based on Census data and the U.S. Labor Department's current population survey, help show what the post-recession small business landscape is becoming.

Expect more like Maribel Lieberman, who left Honduras for the United States as a teenager in 1980. Her mother pleaded for the girl to drop her dreams of architecture school and train as a bilingual secretary instead.

After several jobs, she started MarieBelle New York and now employs 23 people at her own factory, selling gourmet chocolates in lower Manhattan.

"We're more accepted now, and psychologically for me, it was a great help," she said. "We're becoming more integrated into American culture, and it's giving us the freedom to achieve the American Dream."

Although she left Honduras decades ago, she joined the growing share of immigrants launching businesses here when she opened her own catering company in the mid-1990s.

Back then, immigrants made up only 14% of all new entrepreneurs. That figure has doubled, reaching 28% last year.

Startup data for 2011 are not yet available. But if the number of new firms is near a recent five-year average, immigrants launched at least 170,000 new companies last year. They have nearly doubled their rate since 1998. It's unknown how many of those were started by the estimated 11 million undocumented immigrants who currently reside here.

Javier Palomarez, president of the Hispanic chamber, links the rise of entrepreneurship to the immigrant frame of mind.

"It's certainly a boot-strap mentality: 'I had the gumption to leave where I came from to get here. By God, I'm in the land of opportunity. These people need some good baked goods, so I'm opening a bakery,' " said Palomarez.

Read more about immigrant Hispanic small business owners:

El Pichy Films: A joke turned into a company

Kanti Organics founder left Colombia and never looked back

Refundo offers mobile banking for Spanish speakers

Orinoco creates jobs on both sides of the border

From tiny jungle town to a gourmet city shop called MarieBelle To top of page

Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.