Startups are a crucial component of the US economy. Dubbed “the engine,” this subset of high-growth business ventures has bolstered job creation, driving innovation and generally making the US economy more dynamic and productive.
We’ve seen how small companies conceived in cramped garages can grow into corporate mammoths. From Apple to AirBnB, startups disrupt traditional industries and introduce brand-new inventions while adopting new marketplace approaches.
But it’s the stories behind these startups that reveal their greatest virtue: diversity.
A new report by the National Foundation for American Policy (NFAP) has found that the men and women behind some of the most essential contributions to the US economy come from richly diverse foreign backgrounds.
— Forbes (@Forbes) November 5, 2018
They make up more than half (50 of 91, or 55 percent) of America’s startup companies valued at US$1 billion or more. They are key members of management or product development teams in more than 80 percent of these companies.
At 75 of the 91 companies, at least one immigrant was in charge of a key management or product development position, such as CEO, Chief Technology Officer (CTO) and Vice President of Engineering – crucial positions in a company’s growth and innovation.
“Since in every successful startup company each co-founder makes a key contribution to start the company and move it toward success, it is likely none of the billion-dollar companies with at least one immigrant founder would have been created or exist in the United States if the foreign-born founder had not been allowed to come to America,” the report wrote.
Far from the (untrue) narrative painted about immigrants – ie. that they are low-skilled and stealing jobs from similarly qualified Americans – the report uncovered that these highly-educated founders then went on to create an average of more than 1,400 jobs per company.
For a majority of these founders, US universities – another target under the Trump administration’s agenda to reduce immigration – empowered their start to success.
NFAP data show close to one in four (20 of 91) of these startup companies were founded by immigrants who first came to the US as international students.
All universities listed in the chart above are either Ivy League or highly-ranked public universities in the US. Stanford and Harvard, where a total of nine founders studied, consistently feature in the top 10 in the most respected global ranking league tables.
Among the 25 founders named are SpaceX’s Elon Musk, originally from South Africa (Business and Physics, University of Pennsylvania), Moderna’s Noubar Afeyan, originally from Lebanon (PhD Biochemical Engineering, Massachusetts Institute of Technology) and Cloudfare’s Michelle Zatlyn, originally from Canada (MBA, Harvard Business School).
The report also highlights the contentious H-1B visa program, which enabled many of these tech entrepreneurs to remain in the US, start their business and hire new personnel for their fast-growing business. The H-1B visa is what US companies use to employ high-skilled foreign nationals long-term, including recent graduates from US universities.
The Trump administration has since increased denials and Requests for Evidence of H-1B visa holders, a move analysts have blamed for driving foreign talent elsewhere to institutions in Canada and Australia.
NFAP interviewed 91 US startup companies valued at over US$1 billion (as of October 1, 2018) that are not publicly traded on the stock market and are tracked by Dow Jones VentureSource and The Wall Street Journal.