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September 30, 2005

Above-Average Rates of Entrepreneurship for Immigrants and Hispanics

The Ewing Kauffman Foundation, which does some excellent work in promoting entrepreneurship, released a new study (pdf) on entrepreneurial activity across the country.

The level of entrepreneurial activity over the eight years ended in 2004 has been fairly constant at an average of 0.36 percent of the adult population creating a new business each month. This rate translates into about 550,000 new businesses each month.

The study also examined rates of immigrant entrepreneurship, and the results for Hispanics are notable:

Two especially surprising findings from the study are: (a) that the Latino rate of entrepreneurship increased from 0.38 percent in 1996 to 0.48 percent in 2004, which was higher than the white, non-Latino rate of 0.39 percent; and (b) that immigrants have substantially higher rates of entrepreneurship than native-born individuals. The average rate of entrepreneurship for immigrants was 0.46 percent compared to 0.35 percent for the native-born.

As you might infer from our previous commentary on the Hispanic market on Tidbits, such as this recent post, we are not surprised by these findings in the least.

For example, it is not coincidence, in our view, that the areas of the country in which entrepreneurial activity has increased the most in recent years has been the South and West, according to the Kauffman study. As we pointed out just yesterday, Southern and Western states have received an steadily increasing share of immigrants in recent years.

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