Report: Immigrant entrepreneurship lags in Minnesota


Limited access to seed capital, a younger average age and, paradoxically, a high level of education could help explain this recent trend. According to the report, only 3.7% of the state’s immigrant population were self-employed in 2019, which is below levels observed in neighboring states and nationally.

“Entrepreneurial immigrants are playing an increasingly important role in the economy,” the chamber said in the report released on Tuesday, March 23, noting that they employ tens of thousands of residents. “Despite these positive numbers, Minnesota’s immigrant entrepreneurship rate lags behind the rest of the country.”

According to the American Immigration Council, an advocacy group, immigrants make up a sizable and growing portion of Minnesota’s workforce, making up nearly 10% of the state’s population. They could play an even more important role in their economy if Minnesota-born residents retire from the job market or move to other states.

Citing data from the US Census Bureau, the report, which examined various ways in which immigrants contribute to the state, found that a higher percentage of the immigrant population in Minnesota are of working age than the native-born population. Eighty-one percent of the state’s immigrants are between 18 and 64 years old, while only 60 percent of the Minnesota-born people fall into this range.

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The median age of the foreign-born is also six years younger than that of the US immigrant population, which the report says could contribute to relatively low entrepreneurship.

“It takes time for immigrants to accumulate capital and develop the business skills needed to start a business,” the report said.

In comparison, the immigrant populations in Wisconsin, Michigan, and Illinois are all of older median ages and slightly higher levels of self-employment. At the national level, the self-employment of immigrants is around 7.7%

Previously low unemployment and the labor shortage observed in Minnesota may also be a factor. Immigrants in the state may not have to go on strike alone to support themselves and their families if, according to the report, they have little trouble finding work.

How the number of jobs deleted by the coronavirus pandemic affects this assumption is not immediately clear. The report looks at the years leading up to the event.

Immigrant entrepreneurship also appears to be influenced by educational attainment. Immigrants without a college degree or other academic qualifications are more likely to start their own businesses, particularly in construction, landscaping, and hospitality, and have more immigrants in Minnesota than in neighboring states or across the country. according to the message.

The interviews conducted for the report suggest that it can be difficult for immigrants to manage the funding process for a new business. Many of them said they were unaware of the resources available to them and had no creditworthiness.

Abdirizak Mahboub, who was born in Somalia, told the report’s authors that it was initially a “challenge” for him to fund the shopping center in Willmar, Minn.

“I was connected to a small bank in Willmar by chance and happened to know the owner,” he is quoted as saying in the report.