If you pay attention to the names or accents of the owners at local grocery stores, nail salons, laundromats, and delis, you might quickly realize that many of them are immigrants.

You've probably heard that immigrants are much more likely to start businesses than those born in the U.S., and when you look at the actual numbers, the difference is even more pronounced than you might expect.

According to the 2023 American Community Survey (ACS), immigrants make up only 14 percent of the total population, yet they account for 21 percent of all business owners.

When considering the labor force, immigrants represent 17 percent, but their share among business owners is even higher at 21 percent, indicating that immigrants are more likely to venture into entrepreneurship compared to their native-born counterparts.

A study by the Kauffman Foundation analyzing data from 2005 to 2010 found that 0.83 percent of the immigrant labor force started a new business each month, while only 0.46 percent of those born in the U.S. did the same.

That's nearly a twofold difference, but what accounts for this gap?

The most commonly cited reason is that degrees or certifications obtained in their home countries are often not recognized in the U.S.

Even if someone worked as a doctor, engineer, or accountant back home, they often have to pass U.S. licensing exams from scratch, leading many to choose to start their own businesses instead.

The barriers of language and networking cannot be overlooked either; in a hiring market where it's tough to break through with just a resume, gathering customers within the same community can sometimes be a quicker path to success.

In fact, the sharing of information within communities and the use of group gatherings to raise initial capital are frequently mentioned as reasons for the high rates of immigrant entrepreneurship.

Industry-wise, there is a clear trend of immigrant entrepreneurs gravitating towards sectors like food service, laundry, and retail, where they can operate without significant initial capital.

It's also common to see immigrant small business owners reducing labor costs by having family members help run the store.

According to the 2023 census data, the self-employment rate among Hispanic immigrants is 14.1 percent, which is higher than the 11.9 percent for non-Hispanic immigrants and significantly higher than the 7 percent for U.S.-born Hispanics.

Some analyses suggest that the choice to immigrate itself reflects a propensity for risk-taking.

These individuals have decided to leave familiar countries and start anew in a different place, which may make them less hesitant to take on the challenge of starting a business.

However, applying this framework to all immigrants can be problematic.

Those who come on work visas like H-1B often find it much more challenging to leave their jobs and start businesses due to visa restrictions, and there isn't even a specific visa for immigrant entrepreneurs in the U.S.

Thus, the high rate of immigrant entrepreneurship is not solely due to exceptional business acumen but rather a result of the intersection of barriers in the job market, visa limitations, and community networks.

The impact of this trend is significant.

According to a study by the American Immigration Council, as of 2024, 46 percent of Fortune 500 companies were founded by immigrants or their children.

In Gusto's 2024 new business report, 91 percent of immigrant-owned businesses that opened in 2024 employed at least one person, which is higher than the overall average of 84 percent for new businesses.

After seeing these statistics, I started to view the deli owner I pass by every morning in a different light.

In my stable job with a steady paycheck, I felt a bit of a jolt, and I couldn't help but wonder how many people that one store supports in the neighborhood.