This week I came upon a study of the importance of networks in the job-seeking efforts of immigrants, and it reminded me of my own grandparents’ experiences as immigrants. It also led me to some research about the entrepreneurial activities of recent immigrants.
The researchers studying networking behavior, Deepti Goel and Kevin Lang, focused on recent immigrants to Canada. They found that for many immigrants, their likelihood of finding a job was much stronger if they exploited their network than if they went through formal channels. (Actually, research has shown that this is true for everybody.) What made a network particularly strong for an immigrant was knowing somebody in the community when they first arrived there. A weaker network was one in which they had only ethnicity in common, and not a previous bond of friendship or kinship. The size of the ethnic community was not as important for job-finding as the strength of the personal connection.
However, in such cases, the pay of the jobs that the immigrants obtained tended to be lower than those obtained through formal channels. My guess is that immigrants who found work through formal channels were more likely to find high-skilled jobs, because as part of the formal job search they had to demonstrate their skill credentials. The immigrants who found job through their friends, on the other hand, were less likely to have to demonstrate their skills and therefore more likely to end up in lower-skilled jobs.
Both of my grandfathers were immigrants, and both of them exploited strong networks when they arrived in the United States. My maternal grandfather came from a small town in what is now Belarus and had several relatives in Brooklyn, where he first settled. He also had relatives in Detroit, and through one of them he got a job working for the Ford Motor Company, but the job did not suit him, and he returned to Brooklyn, where he eventually became a masonry contractor. The business was successful (although Donald Trump’s father once defaulted on a substantial contract) and allowed him to raise six children and become the landlord of a row house.
My paternal grandfather came from a medium-sized city in what is now Ukraine and had a smaller family network but a good network of hometown friends. He was a skilled lathe operator, but his efforts to unionize his co-workers caused friction with his employers. One of his brothers had made a small fortune by applying his lathe-operating skills to manufacturing cheap pens, so my grandfather decided to pursue his own entrepreneurial dreams and started a company that made inexpensive silver gift items. He never matched his brother’s success and died in considerable debt, but the business found new backers, kept my father employed, and put me and my siblings through college.
Entrepreneurship has always been a popular career option for immigrants, who see America as a land of boundless opportunities. I was reminded of this by a report on "America’s New Immigrant Entrepreneurs," by Vivek Wadhwa, AnnaLee Saxenian, Ben Rissing, and Gary Gereffi, who found that at least one immigrant was a key founder of 25.3 percent of all engineering and technology companies established in the U.S. between 1995 and 2005. In 2005, these companies generated $52 billion in sales and had created just under 450,000 jobs.
It’s interesting to note that immigrant networks are still playing a role in the foundation of these high-tech companies. One indication is the fact that immigrant entrepreneurs tend to cluster in different states, depending on their ethnicity. California is a popular destination for high-tech immigrant entrepreneurs of all ethnicities, but for those from India it accounted for only one-quarter of the companies, whereas for the Chinese it accounted for half and for the Taiwanese four-fifths. About 14 percent of the Indian-founded companies were in New Jersey, whereas only 6 percent of the Chinese-founded companies were here in the Garden State, and an insignificant number of Taiwanese-founded companies. Of course, some of this clustering may be caused by geographical concentrations of particular industries for which immigrants from one country may be especially well prepared. It’s interesting to note that high-tech firms in Denver and San Diego tend not to have been founded by immigrants, because military-related businesses (from which immigrants are often excluded) dominate those locales.
Most immigrant entrepreneurs did not come here for the sole purpose of entrepreneurship. In a survey of immigrant-founders, Wadhwa, Saxenian, Rissing, and Gereffi learned that only 1.6 percent had this goal. The overwhelming majority came to the U.S. to study or (like my grandfathers) expecting to work for someone else.