February 9, 2007
Immigrants Create Jobs, Could Create More
The real job creators in major cities such as New York, Atlanta, Los Angeles, Houston and many others are immigrant entrepreneurs that are bringing foods and other products from their nation of origin to the one they’ve adopted.
“Immigrants have been the entrepreneurial spark plugs of cities from New York to Los Angeles,” said Jonathan Bowles, the director of the Center for an Urban Future, told The New York Times. “These are precious and important economic generators for New York City, and there’s a risk that we might lose them over the next decade.”
The risk, say those who have studied immigrant contributions, is that while individuals from these groups are an economic engine, they are largely ignored by local government nor given access to services that can take their small businesses to national and even international heights.
Many immigrant business owners seem to be doing well even without help. Demographic trends are on their side as immigrants and their children become a larger portion of the American population.
Companies such as Rajbhog Foods, which started out as an Indian sweets shop in Queens, found a growing audience as more immigrants came to the New York borough and also started to populate other areas around the country.
Today, Rajbhog Foods sells its vegetarian product line to stores in 41 states and Canada. Today’s Rajbhog’s consumers are not just Indians or children of immigrants but are from other ethnic backgrounds, as well. The company has developed a new line of frozen entrees, made less spicy for American tastes.
Manuel Miranda and his mother run a family business, Delicias Andinas, that produces a Colombian flatbread known as arepas. The company produces 10 million arepas a year, mostly for Colombian consumers.
Mr. Miranda believes that arepas have the same type of market potential as bagels. He is coming up with innovations such as a toaster version and has sought distribution through a website for national sales. However, progress is hindered by his lack of experience with mass production and distribution.
“I don’t have the connections. I don’t know the people who can advise how to take us to the next level,” he said.
A couple of years back, Mr. Miranda said, he was having trouble with the high cost of disposing of corn leftovers from the arepas. A city agent was able to put him in touch with a recycler and now his waste goes to hog farms.
“For us, it was a big deal,” he said. “Right now, I don’t need money. I need knowledge.”
Discussion Questions: Do demographic trends suggest that immigrant-owned companies will become more influential in the future or will assimilation make that a non-issue? What recommendations do you have for companies such as Delicias Andinas that are looking to take its business to the next level?
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I think immigrant-owned companies will get more influential, and that as they grow, their acceptance into the mainstream will start to obscure the fact that they’re immigrant-owned.
But I also think that’s a process that’s as old as American industry. The movie business started as a collection of immigrant-owned studios, if I remember my history right, and we think of bagels and pizza as all-American favorites. We all think of IBM as the quintessential big-iron computer company, but there was also the Wang corporation.
The bottom line: people come. When they start little businesses, they’re immigrants. When their businesses become companies, they become Americans, and their products become American products.
I definitely see Mr. Miranda’s arepas following a similar path. Thirty years from now, kids may well be amazed to discover they didn’t originate in Vermont – especially if he finds the expertise he needs to grow his business now.
Here’s one source I usually forget about, but it’s probably perfect for a lot of us:
SCORE, at http://www.score.org, is an organization of retired corporate executives that exists to give expert-level advice to small businesses.
They’re nationwide, and their site now says they’re also affiliated with the Small Business Administration. I think they’d be particularly valuable in operations, including production and distribution.
The increasing affluence of the traditional American consumer demands more outlets for them to spend disposable income.
At the same time, immigrants are getting treated more and more as unwelcome visitors by the same traditional American consumers.
To that end, the pockets of non-American communities will begin to look more and more like New York City did as Irish, Italian, German, Chinese, etc. groups arrived onto our shores. They clung to their neighborhoods then, and still do.
We are just seeing newer groups in larger numbers. It should be a good thing, as America was built from diversity…but we still don’t want the trees cut down in OUR backyards.
There is no doubt that immigrant entrepreneurs are a powerful engine driving small business creation. Among Hispanics, the largest ethnic group, self-employment grew 41% between 2000 and 2003 (vs. overall U.S. @ 6%) and, as a salute to empowered females, Latina business creation surged 62% during the seven years ending 2004. Ethnic entrepreneurs will be a growing factor in the U.S. for many years. Forecasts by the Census Bureau predict that in 2050, ethnic population size will be greater than the white/Caucasian population (the famous tipping point in U.S. demographics). A process of acculturation does take place over 2-3 generations but cultural traditions (especially with regard to food) stay a long time. Plus, the U.S will continue to be a magnet for immigrants from around the world wanting to improve their lives. Insofar as Senor Miranda and his Delicias Andinas flatbread: if I were in his sabatas, my priority would be to get distribution in Hispanic independent grocery retailers in key Latino markets and do this by hiring broker organizations like Acosta or Advantage who have relationships in this channel. Then as distribution and consumer sales ramp up, focus on production capacity, productivity and supply chain issues. I would leave new products and product innovation to later, for when the base business is consolidated, the Delicias Andinas brand is better-known by consumers and can be a springboard for line extensions.
Immigrant entrepreneurs have been key drivers of innovation in the retail economy for more than 100 years. They have succeeded throughout that time despite poor access to assistance from public and private resources. Today, however, the numbers of successful immigrants have reached the point where new entrants can find significant support on the private side. The public side still lags. This gap in the public sector provides a great opportunity for communities looking to develop their economic base. Smart city managers will see where they could focus services on helping these immigrant businesses and create a growth engine for local economic development. This approach could be far more cost efficient and have a longer term positive impact than the traditional methods used by most communities.
I think this commentary misses the point. All new businesses are hard to start and whether you are a first generation American or your ancestors came over on the Mayflower, you will face the same challenges but also have the opportunity to get the same rewards. That’s what makes our country so great. Both of the companies talked about in the article found an unserved market and then found a way to serve it. Does this sound familiar?
Any new company that grows will hire and create new jobs. In fact, most of the new jobs in this country are created by small business.
It is unlikely that the government will do more than it already does to help small businesses. Entrepreneurs find help for problems they can’t solve on their own. The internet is the best problem solving and research tool ever created. Many immigrants have no choice. They have to go into business on their own because they’re either undocumented or have no conventional job credentials.
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I think immigrant-owned companies will get more influential, and that as they grow, their acceptance into the mainstream will start to obscure the fact that they’re immigrant-owned.
But I also think that’s a process that’s as old as American industry. The movie business started as a collection of immigrant-owned studios, if I remember my history right, and we think of bagels and pizza as all-American favorites. We all think of IBM as the quintessential big-iron computer company, but there was also the Wang corporation.
The bottom line: people come. When they start little businesses, they’re immigrants. When their businesses become companies, they become Americans, and their products become American products.
I definitely see Mr. Miranda’s arepas following a similar path. Thirty years from now, kids may well be amazed to discover they didn’t originate in Vermont – especially if he finds the expertise he needs to grow his business now.
Here’s one source I usually forget about, but it’s probably perfect for a lot of us:
SCORE, at http://www.score.org, is an organization of retired corporate executives that exists to give expert-level advice to small businesses.
They’re nationwide, and their site now says they’re also affiliated with the Small Business Administration. I think they’d be particularly valuable in operations, including production and distribution.
The increasing affluence of the traditional American consumer demands more outlets for them to spend disposable income.
At the same time, immigrants are getting treated more and more as unwelcome visitors by the same traditional American consumers.
To that end, the pockets of non-American communities will begin to look more and more like New York City did as Irish, Italian, German, Chinese, etc. groups arrived onto our shores. They clung to their neighborhoods then, and still do.
We are just seeing newer groups in larger numbers. It should be a good thing, as America was built from diversity…but we still don’t want the trees cut down in OUR backyards.
There is no doubt that immigrant entrepreneurs are a powerful engine driving small business creation. Among Hispanics, the largest ethnic group, self-employment grew 41% between 2000 and 2003 (vs. overall U.S. @ 6%) and, as a salute to empowered females, Latina business creation surged 62% during the seven years ending 2004. Ethnic entrepreneurs will be a growing factor in the U.S. for many years. Forecasts by the Census Bureau predict that in 2050, ethnic population size will be greater than the white/Caucasian population (the famous tipping point in U.S. demographics). A process of acculturation does take place over 2-3 generations but cultural traditions (especially with regard to food) stay a long time. Plus, the U.S will continue to be a magnet for immigrants from around the world wanting to improve their lives. Insofar as Senor Miranda and his Delicias Andinas flatbread: if I were in his sabatas, my priority would be to get distribution in Hispanic independent grocery retailers in key Latino markets and do this by hiring broker organizations like Acosta or Advantage who have relationships in this channel. Then as distribution and consumer sales ramp up, focus on production capacity, productivity and supply chain issues. I would leave new products and product innovation to later, for when the base business is consolidated, the Delicias Andinas brand is better-known by consumers and can be a springboard for line extensions.
Immigrant entrepreneurs have been key drivers of innovation in the retail economy for more than 100 years. They have succeeded throughout that time despite poor access to assistance from public and private resources. Today, however, the numbers of successful immigrants have reached the point where new entrants can find significant support on the private side. The public side still lags. This gap in the public sector provides a great opportunity for communities looking to develop their economic base. Smart city managers will see where they could focus services on helping these immigrant businesses and create a growth engine for local economic development. This approach could be far more cost efficient and have a longer term positive impact than the traditional methods used by most communities.
I think this commentary misses the point. All new businesses are hard to start and whether you are a first generation American or your ancestors came over on the Mayflower, you will face the same challenges but also have the opportunity to get the same rewards. That’s what makes our country so great. Both of the companies talked about in the article found an unserved market and then found a way to serve it. Does this sound familiar?
Any new company that grows will hire and create new jobs. In fact, most of the new jobs in this country are created by small business.
It is unlikely that the government will do more than it already does to help small businesses. Entrepreneurs find help for problems they can’t solve on their own. The internet is the best problem solving and research tool ever created. Many immigrants have no choice. They have to go into business on their own because they’re either undocumented or have no conventional job credentials.