"50% of firm founders [in Silicon Valley] are foreign born"

http://www.economist.com/blogs/freeexchange/2010/09/economic_growth

by cwan • 16 years ago

97 55 16 years ago

_delirium• 16 years ago

I'm not sure this is even an SV-specific phenomenon; small-business founders in the U.S. have long been disproportionately foreign-born. I wonder what the statistics would be for restaurant owners.

achille• 16 years ago

Heck, 50% of this entire industry is foreign born.

hugh3• 16 years ago

I hear that 95% of the entire world is foreign-born!

acon• 16 years ago

Is that really true? I would guess most people live in the country they were born in.

qasar2• 16 years ago

Although I don't think being an immigrant is a defacto stamp of approval of any sorts, the adversity you face as an immigrant kid does change you.

OR being an outcast of any sort.

The analogy I think of is you're brain is like a clay pot being formed in your youth. Hard hands (hard experiences) either create something amazing or destroy you. And then your teenage years cure you into that state.

sloak• 16 years ago

I think it is incorrect to assume an immigrant kid faces adversity. Most of the emigration to SV is from well-off families with well-adjusted kids and they settle in well-off areas.

qasar2• 16 years ago

Perhaps SV is unique but vast majority American immigrants certainly do not come from 'well off families' and live in 'well off areas'.

But thats all beside the point I was getting at - i'm saying facing significant adversity creates a unique type of person.

gojomo• 16 years ago

What gives these foreigners the right to come over here and make American jobs? That leaves fewer jobs for native-born Americans to make!

Jx• 16 years ago

What gives these Europeans the right to come over here and take Americans' land? That leaves less land for native Americans!

ww5202• 16 years ago

I think you fail to see the irony in OP's comment.

timr2• 16 years ago

Yeah, that's funny and all...but I'm rather embarrassed for HN's analytical skills right now.

Fifty percent of firm founders are foreign-born you say? OK. What percentage of valley residents are foreign-born? Or, hey...what percentage of foreign-born residents outside the valley start businesses. Without answers to these questions, the 50% stat is just a sound-bite.

hackerdude• 16 years ago

As far as I can tell, the report doesn’t say 50% of founders are foreign-born. Rather, it says (middle of page six) that 50% of tech companies have at least one foreign-born founder. That’s very different. To use a very simple example, if you had 100 startups, each with three founders, 50 of which had 3 native-born founders and 50 of which had 1 foreign-born and 2 native-born founders, you’d have 50% of companies with a foreign-born founder, but only 17% of the founders would be foreign-born.

The question that needs to be answered is: do immigrant technology workers found technology startups at a higher or lower rate than native-born technology workers? Surprisingly, I’ve never seen that question addressed. I’ve seen articles that imply an answer, but once I dig a bit it always seems that the data doesn’t actually justify the implied conclusion.

mynameishere• 16 years ago

That's a lot of points for an intensely cliched piece of sarcasm.

Here's a clue: You're an artist with real ambition, so where do you go? Paris or New York. On arrival you notice the huge percentage of aspiring artists who are imports from all around the world. What does this mean?

1. Paris and New York are incapable of art and depend on foreigners.

2. Paris and New York have developed art scenes of such strength that they are known world-wide as the places to go if you have ambition.

#2, obviously. Well, not obvious if you're making cheap political shots, but whatever. SV is known all over the world as the destination for ambitious entrepeneurs and that has mathemetical ramifications of no polical meaning.

bpodgursky• 16 years ago

Not especially surprising, nor damning of american-borns. Those with the motivation, skills, and education to move abroad (to anywhere!) and start a business are going to, on average, outperform the population which was born there. Not because they are naturally better, but because they were self-selected by being there in the first place.

Just like I'd be willing to bet that americans living abroad are overrepresented as entrepreneurs wherever they happen to be living.

fizx• 16 years ago

It's also possible that due to discrimination in the hiring market, their opportunity cost is lower.

omd• 16 years ago

That's not only true for entrepreneurs, but anyone who excels in their field. Here in Europe a lot of Americans and other foreigners stand out because they were chosen for their skills. Otherwise they wouldn't be here. The Europeans I know in Silicon Valley didn't go there on their own accord, they were invited to come.

rubashov3• 16 years ago

> Not especially surprising, nor damning of american-borns

I disagree. I wouldn't be sanguine about it. Previous major waves of technical innovation were lead by well established Americans. Something has changed.

A plausible hypothesis (not that I'm convinced) is that high immigration has driven down wages in technical professions. So native born Americans are less inclined to bother.

I think it's important to point out that two American eras of high growth and prosperity had essentially zero immigration. From 1921 to 1965 immigration was practically nothing. This was a period of extreme American innovation.

keeptrying2• 16 years ago

I dont think its got anything to do with wages. Especially for founders of technology/science-based companies.

Rather I think Americans dont take tough courses in college - ie science/technology courses. How many computer science (for eg:) MS courses even have Americans enrolled in them?

Americans take it easy in college. Heck, if I'd been born here I'd have done the same. :)

wheels• 16 years ago

From 1921 to 1965 immigration was practically nothing.

Uhm, what? Perhaps in raw numbers, but the world wars drove vast numbers of european intellectuals to the US.

eduardo_f• 16 years ago

I don't think it's damning of American-borns, I think it's actually the opposite. As a foreign-born founder of a US startup, I wish my home country was as attractive as the US for starting my business. I think America should be proud of its capability to attract top talent.

ww5202• 16 years ago

Immigrants by self-selection are already risk-takers, that fits well as a trait to be an entrepreneur.

osopoderoso• 16 years ago

Immigrants are not only risk-takers, they are mainly avoiding poverty and looking for better conditions.

sbowles• 16 years ago

On behalf of my fellow Canadians in the US, I can safely say most of us are simply opportunists.

patrickgzill• 16 years ago

What percentage of people who live in SV are foreign-born?

According to San Jose Business Journal, in 2003 36.5% were foreign born. http://sanjose.bizjournals.com/sanjose/stories/2003/09/01/da...

I guess/estimate if you adjusted for those native-born who are either working at family businesses already (2nd or later generation of a family owned business), or are following their parent's lead on a trade or profession (son of lawyer becoming a lawyer, daughter of ob-gyn becoming a doctor), you would find that the quoted stats are not very important or relevant.

(just adding another data point to the discussion)

xelipe• 16 years ago

Good question. In SV there are cities with a foreign born population that is well above 50%. Another question I would ask, what is the percentage of SV founders that are Native Californians?

kd0amg2• 16 years ago

The H1-B thing seems like a bit of a non-sequitur to me. I thought H1-B was for getting hired to a specific position (i.e. not for founders)?

paul_mara• 16 years ago

The article mentions that the H1-B is a path towards citizenship; citizen or green-card holders can then become founders.

hippich3• 16 years ago

you can be founder on h1b/tourist visa, but you can't work for this company and be paid unless company you (co)founded will hire you.

hippich3• 16 years ago

H1b is just a start. Once you get there, you can get new opportunities. It's way harder to be hired by someone if you are on tourist visa.

djhworld• 16 years ago

This is really just a symptom of the magnetism of Silicon Valley.

To put it into context, here in the UK there is no where really quite like it, in terms of supporting tech startups and harbouring a community that has such prestige and heritage from over the years. From our perspective Silicon Valley is always going to be seen as having greener grass than ours.

MC27• 16 years ago

I'd imagine immigrants aren't so laden with debt, so they have more freedom. Many countries don't charge their native students for higher education, those that do, are often subsidised and repayments are linked to their earnings. So if you earn a small salary, you pay nothing.

senthil_rajasek• 16 years ago

Right, debt is the burden that keeps all americans from becoming job creators. I am scared to think of what would happen if I don't repay my student loans.

usaar3332• 16 years ago

I don't imagine this being that large of problem this is with majors like computer science. By going to a public school and interning during the summer (maybe even part time during the year), you can easily come out debt free (if not positive).

alextgordon• 16 years ago

Yes but percentage of CS students actually finish with low debt? I would imagine it's lowish.

runT1ME• 16 years ago

People who are born in the US probably have less incentive to leave 'home'. High probability that they've developed business relationships and a network of people in their hometown or place of schooling, giving them an advantage that is taken away if they move to Silicon Valley.

HectorRamos• 16 years ago

How is that different from anyone else not born in the US? They also have a 'home' and established business relationships.

pkaler• 16 years ago

Click through to the David Brooks NYTimes article. The real story here is that there is a mismatch between supply and demand. http://www.nytimes.com/2010/09/10/opinion/10brooks.html?_r=1...

One of the perversities of this recession is that as the unemployment rate has risen, the job vacancy rate has risen, too. Manufacturing firms can’t find skilled machinists. Narayana Kocherlakota of the Minneapolis Federal Reserve Bank calculates that if we had a normal match between the skills workers possess and the skills employers require, then the unemployment rate would be 6.5 percent, not 9.6 percent.

The Economist article expands upon this thesis for the high-tech industry. Just as there aren't enough skilled machinists, there also are not enough skilled founders in the domestic market.

csomar• 16 years ago

How did those founders get Visa to come here and build their firm? Did they all start with 1 million dollar?

IdeaHamster• 16 years ago

Maybe it's time to rerun this poll: http://news.ycombinator.com/item?id=688053

mahmud• 16 years ago

169 out of 531 total were first-generation, foreign born immigrants (much like myself :-)

That makes it 32% of all HNers who bothered to vote.

If you count those whose parents are immigrants, it jumps up to 52%.

vbsredlofb• 16 years ago

What really surprises me is the other half. Americans? Who could have thought?

helmut_hed• 16 years ago

As a tech guy who has repeatedly been hired by companies founded or run by Indian immigrants, I have only this to say about the immigration of foreign entrepreneurs: more, please

johngalt• 16 years ago

This is great news. People are drawn from the world over to SV to build a business. Makes me wonder if we relaxed immigration rules for entrepreneurs we could push this even further.

The idea that we could draw in more founders just by letting them come here... seems like an easy win. All those startups and all the high skill workers they'd attract. Imagine the synergy of all that talent in one place. It could be the next renaissance.

known• 16 years ago

What % of jobs Americans create outside USA?

"50% of firm founders [in Silicon Valley] are foreign born"

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