Immigrant Businesses in New York City
For more than a century, immigrant entrepreneurs contributed substantially to the US economy. Compared to the country’s early waves of immigration, the present new Americans are seen to be more entrepreneurial than native-born residents. Historically the Census data reveal that immigrants tend to be self-employed than the native-born residents. However, from early part of the twentieth century, there has been a palpable change in the composition of new entrants and subsequent explosion in immigrant-run.
New York City Strengths The impact of immigrants on New York City’s economy has been impressive, and small businesses are considered to be one of the important of segments of the city’s economy and are owned largely by immigrants. Immigrants constituted 36 percent of the city’s population but accounted for 49 percent of all self-employed in 2000. Immigrant entrepreneurs are credited for the increase in new businesses across the city and turning around depressed neighborhoods in five boroughs in the past two decades.
During the 1990s, the number of self-employed, foreign-born individuals increased by 53 percent. The immigrants dominate businesses in Jackson Heights, Sunset Park, Flushing, Sheepshead Bay, Brighton Beach and Elmhurst, and created a larger number of jobs compared the city. As such, they are seen as
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Immigrant entrepreneurs have become most essential dependable parts of the city’s economy. Family networks with established local roots give head-start to a potential entrepreneur. Some of them hone their skills to create successful large companies, ranging from food manufacturing companies to banks and software solutions. Rags-to-riches stories abound in this community who come with little, working as much long hours in a week and use their ingenuity and work ethic to flourish professionally and economically. Weaknesses.
Limitations of labor statistics and under reporting by many immigrant entrepreneurs make it difficult to compile data as how many businesses are owned by immigrants in the city. Typically, immigrants start out by opening small family-run businesses such as flower shops and accounting offices to newstands, day care centers and construction companies. Some venture out to become street vendors, cab owners or single proprietors selling various articles to real estate, few work from home, and market goods from native countries, etc.
Many of the enterprises fail and a majority of the successful ones do not scale to next level. However, the majority of entrepreneurs are able to draw enough monies to support themselves and their families, recognizing entrepreneurship as survival tool and ticket to prosperity. The role city administration, either in as a partner or promoter, is seen to be far from satisfactory as there is a lack of effective business service delivery mechanism for immigrant businesses, and leaders of the group view themselves as tremendous potential that is yet to be unlocked by the city officials.
There is a feeling that immigrant entrepreneurs are not getting required attention in the city’s long-term economic development policies. The entrepreneurs are missing huge opportunities to expand their businesses. Only a fraction of immigrants who own restaurants or other retail businesses have expanded into larger space or created stores in additional locations. Vendors tend to cling to their pushcarts rather than owning stores. Few businesses develop customized ethnic products to export to other states where there are ethnic markets, and a large number of firms managed by immigrants are content with serving their own ethnic people.
Compared to other fledgling businesses, immigrant entrepreneurs face a number of additional hurdles arising from failure to understand the rules and regulations businesses in the city have to comply, and lack of credit history and access to credit is another barrier. Cultural and language barriers compound these problems. Inadequate communication skills diminish their scope to sell merchandize and services in markets outside their ethnic boundaries, or to garner assistance from government and nonprofit organizations.
Without credible help, immigrant business owners get inappropriate and bad advices from friends, family or accountants, and make costly mistakes. Others turn to professionals from their native language and professionals take advantage of them. Many immigrant entrepreneurs are penalized for failing to comply with rules they are not versed well with such as the need to incorporate with the state for business tax payments or applying for a permit to have a sign. For many immigrants, the biggest barrier is the proficiency of English – the ability to speak and comprehend.
Though majority of immigrants do operate successful businesses without strong English skills, catering a customer base comprised of immigrants who speak their native language. Yet, lack of proficiency in English makes it difficult for others to file correctly applications for loans and contracts and feel fearful to approach the government or nonprofit service agencies. Large majority of immigrants do not establish a checking or savings account, and do not have a credit history, limiting their entry into banking system. Absence of credit history limits their chances of receiving bank financing to start a business. Implications for the future
It is anticipated that the new immigration will to fuel much of the future growth of the city’s population over the next decades. The new arrivals will succeed as their predecessors with entrepreneurial talents. The burgeoning immigration population will create demand for businesses that provide services and make goods, ranging from companies that import or export food products to firms involved in providing legal services to new arrivals. With the advent of global economy, and concomitant increase in outsourcing and corporate mergers, it is likely that small, home-grown businesses will become essential to New York City’s future success.
According to US Small Business Association, small firms generated 75 percent of new jobs nationwide. The same trend will replicate in the city due to immigrant entrepreneurs. For example, in Queens there was a 21 percent increase of the firms with 10 employees or less between 1990 and 2005 during the same period. In the next 25 years, immigrants will continue to contribute to the city’s population. These forecasts augur well for the local economy as the immigrants have been starting enterprises at higher rate than native-born New Yorkers.
The projected stakes for the city are high, with estimated 900,000 new residents by 2030, and city needs new job generators. City’s traditional sources employment growth such as securities industry have been creating less number of new jobs, and several largest corporations based in the city are creating new jobs in other cities and countries than the city.
Bowles, Jonathan. “World of Opportunity. ” Februray, 2007. Center for an Urban Future. 7 June 2007. <http://www. nycfuture. org/images_pdfs/pdfs/IE-final. pdf>.