Immigrant women fuel small business growth in the United States

By: Elizabeth Kelleher, USINFO

WASHINGTON, DC – Immigrant women are one of the fastest-growing segments of small business owners in the United States and can expect to be a sizeable portion of small business owners by 2017, according to Intuit Inc.’s Future of Small Business Report, co-authored by the Institute for the Future.

Men and women among the 36 million immigrants in the United States have higher rates of starting new businesses than do native-born Americans, according to Robert Fairlie, an economist who produces the Kauffman Index of Entrepreneurial Activity. The index shows that, each month over the last three years, 310 of every 100,000 immigrant women created a business, while 220 of 100,000 native-born women did so.

In other words, immigrant women are starting businesses at a rate 41 percent higher than native-born women.

They do it for a variety of reasons: for flexibility to raise children, to avoid barriers that come with traditional jobs, or because their skills do not translate well into corporate America.

Small businesses employ slightly more than half of all U.S. private-sector workers, and these women are staking their place in the economy as job creators.

Asa Kalavade, raised in India, co-founded Tatara Systems Inc., a Massachusetts-based technology business that employs 65 people. Kalavade said in India she felt societal pressure to study something more “woman-friendly” than engineering. After earning a graduate engineering degree at University of California, Berkeley, she stayed in the United States to work at Bell Labs Research before setting off on her own.

Starting her own business was not easy. Kalavade estimates that from 1999 through 2001, some 40 venture capitalists turned her down when asked if they would exchange startup money for equity in the company.

She and her co-founder, a woman from China, did not give up, and, eventually, investors helped them start Tatara. Fairlie would say Kalavade is daring by nature. “To leave your own country and come at great cost to another country, that’s self-selecting” for entrepreneurial spirit, he said.

Today, Kalavade holds eight patents for wireless technologies. One of her patents is for technology that allows consumers to receive phone calls to their mobile phones on their computers. “I didn’t want to do pie-in-the-sky research,” she said.

Immigrant women are “prone to taking risks,” said Farhana Huq, of CEO Women, a San Francisco nonprofit that helps low-income immigrant women start businesses. “They really just put themselves on the line.”

A good example is Guadalupe Chavez, who arrived from Mexico in 1997 and, after several years working at retail jobs, took a class at CEO Women. The students were asked to write a “practice” business plan. “In my case, it was a real one,” Chavez said. She had been putting money aside. Her brothers had told her she is a good cook. So, in July 2006, she opened a Mexican restaurant, La India Bonita, in Union City, California. Her classmates painted the place.

Chavez works seven days a week, but enjoys being able to bring her young son to work occasionally. According to King, “mompreneurs” get work-life balance by being their own bosses.

Immigrant women have advantages in a global marketplace, the Intuit study says; language skills and relationships from home countries help them find suppliers and customers. USINFO contacted Kalavade in India, where she was on a business trip. When USINFO telephoned Fanta Nabay – who retails hand-dyed African cloth and handmade jewelry in California – she was on another call to Africa.

Nabay came to the United States in 2000, after rebels killed her parents in front of her and her siblings. She combines business with social purpose. Nabay got help from AnewAmerica, a business incubator in the San Francisco area, and she believes in passing along help. She sends African women money for the materials they need to make the goods she sells and then she sends them some of the profit. “I am a refugee; these [crafts] are made by refugees like me,” she said.

Nabay asks her suppliers to make meals twice a month for children in an African orphanage.
Yan Liu came to the United States in 1997 after graduating from college in China and running her father’s retail business in Shandong for two years. In 2002, she opened a jewelry store (Lireille) in Oakland, California. Her father locates gemstones and jade in China for her.

“In China, each region specializes in different products. Even within a city there are different districts specializing. You have to know those places. That’s one of our advantages,” Liu said.
Even though only two out of 10 of all small businesses succeed in their first year, immigrants might have an advantage, according to King. “Immigrants are more attuned – often more than natives – to the opportunity in America,” he said, “and women increasingly start businesses to avoid the corporate ‘glass ceiling.’ These motivating factors lead to a higher rate of success.”

Liu said, “I’m still starting, not successful yet, but I am happy with myself.”

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