Chinese and Indian immigrants account for two of the largest entrepreneur groups in the United States. These two groups often hold higher levels of education and run more successful businesses than their American-born counterparts, said scholars at a recent APC-CISA symposium.
by Maria Amaya Morfin (UCLA 2019)
UCLA International Institute, October 30, 2018 — “More than 70 percent of all Chinese immigrants and more than 75 percent of all Asian Indian immigrants [have come] to the United States since the 1990 immigration act that established the H1-B visa, an employment-based visa for highly skilled workers,” said Wei Li, professor of geography at Arizona State University. Li was one of five academic experts who spoke about Indian and Chinese diasporas in the United States and their respective entrepreneurial cultures at the October 13th UCLA symposium, “Social Networks in a Transnational World: Chinese and Indian Entrepreneurs in the United States.”
Hosted by the Asia Pacific Center and Center for India and South Asia, and cosponsored by the UCLA International Institute, Anderson Center for Global Management, Anderson Price Center for Entrepreneurship & Innovation and Asian American Studies Center, the symposium examined the reciprocal relationship between the social networks and entrepreneurship of U.S. immigrant Indian and Chinese entrepreneurs.
Additional academic speakers at the event included Masud Chand, chair, department of management, and associate professor of international business, W. Frank Barton School of Business, Wichita State University; Purnima Mankekar, professor of Asian-American studies, gender studies, and film and television studies, UCLA; Jing Y. Kwoh, Ph.D. student, Arizona State University; and Anuradha Basu, director, Silicon Valley Center for Entrepreneurship, and professor of entrepreneurship, San Jose State University. UCLA’s Akhil Gupta, director of the Center for India and South Asia and professor of anthropology, together with Min Zhou, director of the Asia Pacific Center and professor of sociology and Asian American Studies, both gave opening remarks at the symposium.
The meeting was also addressed by four businessmen: John Chan, CEO, Aspira Scientific; Leo Chu, president, California Casino Management ; Buck Gee, retired vice president and general manager, Cisco Systems; and Venkat Tadanki, co-founder and CEO, Secova.
Immigrant entrepreneurs and their countries of origin
In recent years China has become one of the leading economies in the world. It is both a top manufacturer and exporter of industrial goods. Similarly, India’s economy has experienced increasing growth rates, placing the country among the top-ten largest economies in the world by gross domestic product (GDP).
Economic growth in both India and China provides an incentive for international students and immigrants to return to their countries of origin and create businesses. Contrary to common belief, the majority of international students from India and China who are pursuing degrees in the United States want to return home after graduation. “Only six percent of Indian students want to stay in the U.S. permanently; most want to return home within five years, post-graduation,” said Purnima Mankekar.
California’s Silicon Valley is home to the some of the most innovative technology companies in the country, many of which are run by Indian and Chinese immigrants. Moreover, Indian and Chinese diasporas in places such as Silicon Valley contribute to the economic development of China and India, as students return home with business ideas that spark further economic growth. As Mankekar explained, “These communities have taken the Silicon Valley model back to India.”
In the United States, nearly one third of businesses created between 2006 and 2012 had one founder of Indian origin, noted Anuradha Basu, making Indian immigrants, on average, larger contributors to the U.S. economy than U.S.-born individuals.
“In 2010,” said Masud Chand, “it was estimated that the average net worth of the businesses of an Indian diaspora entrepreneur was about U.S. $85,000, compared to the average net worth of the business of an American-born entrepreneur, which was about $52,000.” Furthermore, continued Chand, the average household income of members of the Indian diaspora living in the United States tend to be higher than the average household income of the United States population as a whole: $107,000 compared to $56,000.”
It is commonly assumed that most entrepreneurs develop only one business during their lifetime or own multiple business simultaneously for an extended period of time. In reality, said Basu, “[M]any of these tech entrepreneurs are serial entrepreneurs. They don’t have multiple businesses at the same time; they have one business and they sell it or it goes bankrupt, and then they start another business.”
Social capital in business and entrepreneurship
A number of panelists and presenters discussed how social capital helps immigrant entrepreneurs establish businesses and create transnational ties between their countries of origin and the U.S. Jing Y. Kwoh cited the example of an affluent Chinese immigrant who moved to the United States without any knowledge of English. Because of his wealth and social connections in the U.S., however, he was able to hire bilingual Chinese Americans who helped him successfully start his business.
Chinese and Indian immigrants often settle in already established Indian and Chinese communities in the U.S, pointed out Kwoh. Local co-ethnics are the main clientele for businesses in these communities, aiding both their growth and success. The largest Indian communities in the U.S., for example, are located in California, New York and New Jersey, where the most successful Indian businesses are found.
Social connections reduce the amount of work and time an individual needs to invest in a business, continued Kwoh. She described case studies of entrepreneurs located in two U.S cities: Los Angeles and Phoenix. The second-largest community of Chinese immigrants in the U.S lives in Los Angeles, she observed, while the Chinese community in Phoenix accounts for less than five percent of the total population.
In Los Angeles, most Chinese entrepreneurs interviewed by Kwoh valued social connections and considered them essential in the early stages of starting business. Moreover, she said, they believed that “social capital furthered transnational connections between China and United States, which is vital [to] their strategies for business development.” In Phoenix, on the other hand, only one entrepreneur interviewed by the scholar agreed that social connections increased his business success. Another Phoenix entrepreneur said that he had never found that social connections helped him be successful in business. According to him, “[T]he only thing he could do was work harder and longer hours,” commented Kwoh.
Firsthand entrepreneurial experience
At the last symposium panel, moderated by Min Zhou, Indian and Chinese businessmen and entrepreneurs residing in the United States shared their personal experiences.
For many immigrants, lack of English language skills is a barrier to success, but social connections nevertheless help them achieve positive business results. “My father always told me, ‘You don’t have to know anything to start a business, but you have to know a lot of people so you can start your business. Going to school is best, but if you can’t afford to go to school, you better make a lot of friends — friends who will help you start a business,” explained Leo Chu, reinforcing the idea that social capital is an essential asset for starting a business in the U.S.
Vankat Tadanki led a lively discussion of the role played by The Indus Entrepreneurs (TIE) among Indian businessmen in the U.S. and other diaspora communities. In contrast to the role that social networks play in the Chinese entrepreneurial community, Tadanki noted that TIE — a global nonprofit organization founded in Silicon Valley in 1992 — provides crucial professional mentoring and networking services to Indian entrepreneurs in this country.
Most of the businessmen described entrepreneurship as something motivated by more than personal economic gain. Rather, they viewed it as changing the world with new, innovative methods and technologies.
“What drove me was not the business, what drove me was doing something [that] I thought was fun and challenging,” said Buck Gee. “I was always looking at new technology; I wanted to do something that was fun, whether it was creating new marketing or creating a new technology,” he continued.
John Chan noted that every year, governments and research companies spend more than $50 billion in applied business research, but that new technologies are insufficient for solving many of the world problems. “I did not become an entrepreneur because it was something I was meant to be,” he explained. “It was more out of necessity because the world has very big problems right now, big problems that we cannot run from.”
Creating transnational connections between their countries of origin and their country of residence contributes to the exchange of innovative ideas and cultures, as well as to the overall cultural richness of the United States, concurred the businessmen. In addition, the contributions of Chinese and Indian immigrants — whether entrepreneurs or academic researchers — have benefited economic development and employment not just in United States, but also in China and India.