Immigration is an important driver of the United States technology industry – without immigrants, it’s not quite clear that many of the biggest tech companies would have been started.
While immigrants make up less than 15% of the nation’s population, they started one out of four new tech businesses over the last couple of decades.
And their influence is even bigger when looking at the most successful tech companies, according to Bond Capital’s Mary Meeker, who publishes the highly influential Internet Trends report each year.
Half of the 10 largest public companies by market cap in the U.S. and 13 of the top 20 were started either by a first generation or second generation American, according to information compiled for Meeker’s new 2019 report.
Among the top public companies with first-generation immigrant founders are Alphabet Inc. (NASDAQ: GOOGL)’s Google (Sergey Brin, Russia); NVIDIA Corporation (NASDAQ: NVDA) (Jensen Huang, Taiwan); and QUALCOMM, Inc. (NASDAQ: QCOM) (Andrew Viterbi, Italy). Four of the founders of PayPal Holdings Inc. (NASDAQ: PYPL), are first generation immigrants.
Overall, 60% of the highest-value tech companies were founded by first- or second-generation Americans, according to Bond’s Internet Trends.
Highly valued private tech companies founded by immigrants include WeWork, started by Israeli immigrant Adam Neumann; DoorDash, founded by Chinese immigrant Tony Xu; Slack, which was started by three immigrants, Canadian Stewart Butterfield, Russian Serguei Mourachov and British immigrant Cal Henderson; and Instacart, started by Indian immigrant Apoorva Mehta.
The Value Of Immigration
The trend has gone on for at least a couple of decades. Bill Gates told Congress back in 2008 that for every tech worker admitted to the country, five American jobs are created. The Partnership for a New American Economy reported in 2011 that immigrants had founded one out of five Fortune 500 companies established in the previous quarter century.
But it continues now as federal policy focuses more on reducing immigration than at any time in recent decades. In tech, meanwhile, there’s typically less support for closing borders.
“America has succeeded, and achieved its present position of global dominance, because it has always been good at importing the talent it needs,” Suketu Mehta wrote in an article last month in Time Magazine that argues immigration is critical for the nation’s future economic growth.
In addition to founders, several top companies are also led by immigrants. Tesla Inc. (NASDAQ: TSLA) CEO Elon Musk, who also is the founder of Space X, is originally from South Africa. Uber Technologies Inc. (NYSE: UBER) CEO Dara Khosrowshahi was born in Iran and came to the U.S. as a child with his family. Microsoft Corp. (NASDAQ: MSFT) CEO Satya Nadella is an immigrant from India.
Effect On Silicon Valley
And it’s not just the people at the top. Some estimates say more than 70% of Silicon Valley tech workers are immigrants, wrote Mehta, the author of “This Land is Our Land: An Immigrant’s Manifesto.”
Mehta’s article argues for an increase in immigration, not just to make sure tech companies are started, but for a variety of financial reasons, including the fact that starting next year Social Security will pay out more than it collects as retirees draw more than the workforce can add.
“America’s problem, in the years ahead, isn’t going to be that too many people are coming here,” Mehta argues in the article. “It’s going to be that too few might want to.”
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