Our commitment to supporting immigrant Sunset Park residents to start small businesses is grounded in a belief that promoting entrepreneurship is a key component in eliminating the economic and social disparities between marginalized communities and New York City’s middle class. An essay in a book recently published by the Drum Major Institute confirms the potential of immigrant entrepreneurship to spark the city’s economic recovery.
In Immigrant Entrepreneurism: An Engine for Economic Recovery, author Jonathan Bowles of the Center for Urban Future argues that for decades immigrant business owners have been driving the city’s economic growth, and they could play an even more crucial role as New York seeks to regain its economic vitality. Although foreign-born residents make up 37 percent of the city’s population, New York lags behind other American cities in the area of immigrant business ownership. Bowles finds that:
Of the 15 American cities that have the most Hispanic-owned businesses, New York has the lowest average receipts per establishment. The average Hispanic-owned company in the five boroughs earned just 37 percent as much as a Hispanic-owned business in Houston, 40 percent of the average in Chicago and 42 percent of the average in Miami. Similarly, New York City’s Asian-owned businesses took in a smaller amount of receipts, on average, than their counterparts in 13 of the 15 cities with the most Asian-owned businesses. The average Asian-owned company in New York City earned 48 percent as much as a similar establishment in Los Angeles, 57 percent of one in Houston and 71 percent of one in San Francisco.
Bowles cites a November 2008 study by the United States Small Business Administration, which found that immigrants are nearly 30 percent more likely to start new businesses than residents born in the US. At the same time, immigrant entrepreneurs face tremendous obstacles compared to their native counterparts, including unfamiliarity with local laws, regulations and customer preferences, limited access to credit, and language barriers. Bowles notes that:
Unable to communicate effectively, immigrant entrepreneurs are less likely to attempt to sell goods and services in markets beyond their own ethnic communities, or to seek assistance from established small business assistance providers. Without such help, many immigrant business owners take bad advice from friends, family or accountants, and make costly mistakes. Others turn to professionals who speak their language but who take advantage of them.
To unlock their potential, immigrant entrepreneurs need much more support.
Harnessing the potential of immigrant entrepreneurs will require greater attention and support from city economic development officials and the many nonprofit community organizations, chambers of commerce and business assistance groups that work with small businesses around the five boroughs. These entities should be well positioned to help immigrant entrepreneurs overcome these challenges and develop systems that enable them to grow…
A major opportunity lies with the scores of businesses throughout the five boroughs that manufacture unique ethnic products, import foreign goods for distribution, or provide specialized services to immigrant communities… With minimal support, some of the city’s small immigrant-run firms might become the next Goya Foods or Golden Krust.
The essay is part of a collection, From Disaster to Diversity: What’s Next for New York City’s Economy? The book, available online with free access at the Drum Major Institute’s website, covers a wide range of plans and ideas for New York City’s growth through responsible development. Click on the link to learn how promoting better education practices, investing in infrastructure and the environment, and strengthening vulnerable communities expand economic opportunity and improve life for every New Yorker.