Immigrants Start One Quarter Of Tech Companies, But Congress Is Making It Harder For Them To Succeed

A new study from the Kauffman Foundation found that in 2011, one-fourth of tech start-ups were founded by immigrants. In Silicon Valley, 43.9 percent had at least one immigrant founder. As the authors of the study wrote, “high-skilled immigrants will remain a critical asset for maintaining U.S. competitiveness in the global economy.”

This is nothing new. As ThinkProgress has noted in the past that “immigrants founded almost half of the U.S.’s top 50 start-up companies and are vital management or development employees at roughly 75 percent of the nation’s leading cutting-edge companies.”

However, Forbes notes that — for the first time in decades — these numbers are actually in decline. The change was especially dramatic in Silicon Valley, where “the percent of companies with at least one immigrant founder fell from 52.4 percent to 43.9 percent.” Tougher immigration policies put in place since 9/11 have made it more difficult for high-skilled immigrants to be successful in the United States, and this is causing reverse “brain drain.” That is, highly skilled and US-educated immigrants are going to India and China, where more economic opportunities exist for them.

This is a serious problem because the economic contribution immigrants make is disproportionately large: immigrants started 28 percent of all US business in 2011, but account for just 12.9 percent of the population. In addition, twenty-nine members of the Forbes 400 list of wealthiest Americans are immigrants.


Congress recently tried to address the problem by attempting to offer more green cards to foreigners with advanced degrees in science, technology, engineering, or math (STEM). The GOP-sponsored STEM Jobs Act, which is discussed in detail here, provided 55,000 green cards to foreign STEM students, but — by ending a larger diversity lottery for green cards — would “[result] in a small net reduction in immigration.”

Democrats offered a very similar bill, but one that would not result in an overall reduction in immigration. However, Republicans refused to compromise on the measure, and the Democratic bill never received a vote. On September 20, the House voted down the Republican bill 257–158. A two-thirds majority was needed to pass the bill since House rules were suspended.

Greg Noth