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Summary: Immigrant Entrepreneurs and Economic Growth - How Immigrant Small Businesses are Supporting Main Street

Bringing Vitality to Main Street: How Immigrant Small Businesses Help Local Economies Grow

L-R: David Dyssegaard Kallick, Jennifer Rodriguez, Kate Brick, Mihailo Temali, Luis Parodi
(Image: Roey Yohai) 

January 28, 2015

Welcoming Remarks:

  • Susan Segal, President and CEO, Americas Society/Council of the Americas

Keynote Speaker

  • Robert Annibale, Global Director, Community Development and Microfinance, Citi

Panelists:

  • David Dyssegaard Kallick, Senior Fellow and Director of Immigrant Research Initiative, Fiscal Policy Institute
  • Luis Parodi, Vice President, Community and Economic Development Manager, Fifth Third Bank
  • Jennifer Rodriguez, Executive Director, Mayor’s Office of Immigrant and Multicultural Affairs, City of Philadelphia
  • Mihailo Temali, CEO and Founder, Neighborhood Development Center, Minneapolis
  • Kate Brick, Policy Manager; Director, Immigration and Integration Initiative, Americas Society/Council of the Americas

Summary 

On January 14, AS/COA released a new report that demonstrates how immigrants are playing an outsize role in “Main Street” businesses—grocery stores, restaurants, retail stores, and other enterprises that are critical to neighborhood growth and vitality. In addition to quantifying the contributions of immigrant small business owners in the country’s 50 largest metropolitan areas, Bringing Vitality to Main Street: How Immigrant Small Businesses Help Local Economies Grow, authored by David Dyssegaard Kallick and co-produced with the Fiscal Policy Institute, takes an in-depth look at the economic contributions of Main Street immigrant business owners in three specific metro areas: Philadelphia, Minneapolis–St. Paul, and Nashville. With this analysis it describes cross-sector efforts to support and encourage immigrant entrepreneurship in these places.

Panelists discussed the report’s findings on immigrant contributions to Main Street businesses, innovative efforts to support these business owners and promote immigrant integration at the local level, and the implications—especially for cities and local governments—of the Obama administration’s recent executive actions on immigration. The launch was part of AS/COA’s Immigration and Integration Initiative, which promotes immigrant integration and positive dialogue on the economic contributions of immigrants in gateway cities across the country.



Immigrants are more entrepreneurial—especially on Main Street

It has been well established that immigrants tend to be entrepreneurial. They account for 13 percent of the U.S. population yet make up 18 percent of business owners. However, as the report finds, they are especially active in “Main Street” businesses, accounting for 28 percent of such business owners nationally. Between 2000 and 2013, immigrants accounted for all of the growth in Main Street businesses in the United States. “This report provides further evidence of an enormous economic contribution that immigrants of all backgrounds and journeys are making as…owners of small businesses, as entrepreneurs, as employers, as investors, and revitalizers of our inner cities,” said Bob Annibale in his keynote address.

In Philadelphia and Minneapolis–St. Paul, the story of growing and more diverse immigrant populations is one of neighborhood and economic revitalization. In these places immigrants played a critical role in arresting and reversing population decreases, and with this have changed the face of business corridors that were previously in decline. Nashville offers an interesting point of comparison, as that metro area never experienced population loss. Nevertheless, immigrants in Nashville—whose ranks have grown from 2 percent of the total population in 1990 to 12 percent by 2013—account for 32 percent of small business growth in the 2000-2013 period, and 29 percent of Main Street business owners.

According to David Kallick, the findings regarding immigrant business activity on Main Street are especially noteworthy because “this is an area that has not gotten the kind of economic development attention that it ought to.” As such, it represents a significant opportunity for cities seeking to spur greater neighborhood-level economic growth and revitalization, as we saw in Philadelphia and the Twin Cities, or a general economic boon to areas like Nashville.

Local innovations for immigrant integration

All three of the metro areas profiled in the report have seen the emergence of diverse efforts to integrate immigrants and spur immigrant entrepreneurship—from city government intiatives to support immigrant entrepreneurship in traditional commercial corridors through designated business district managers in Philadelphia to the private development of market spaces for immigrant entrepreneurs in Nashville and the establishment of pioneering Islamic, reba-free lending programs in Minneapolis–St. Paul.

Panelists stressed the importance of culturally competent, community-focused work. Whether in the name of assuaging tensions between immigrant and receiving communities, integrating immigrant entrepreneurs into existing local economic development initiatives, or facilitating immigrant interactions with government agencies, the panelists highlighted the role of painstaking, face-to-face efforts to build trust and establish relationships. “There is no shortcut for community engagement,” said Jennifer Rodriguez. “There is not an email that you will send to an immigrant group that you have not established a relationship with that will get good outreach.” Ultimately, Kallick noted, these efforts pay off for everyone. As he an example, he pointed to the fact that many business owners in the city are confused by licensing and permit requirements and benefit from city and non-profit efforts to make regulations more clear.

Panelists noted that such efforts must be coupled with an overall message of welcoming, and highlighted the costs of actions that are perceived to be anti-immigrant. In response to comments by Kallick about the effects of legislation like Arizona’s SB1070 or Nashville’s English-only referendum that failed to pass in 2009, Nashville’s Luis Parodi said, “It takes us many years to build a reputation, and that’s what we wanted to build in the city of Nashville, but it could take just seconds to destroy what you’ve built for so many years.”

These initiatives are leading the nation when it comes to local innovations, especially considering that unlike cities with disproportionately large immigrant populations, such as New York or Los Angeles, these metro areas are near the national average of immigrant population share, and saw their immigrant population spike over a relatively short period of time. According to Kallick, choosing localities with this profile was intentional. “We had these discussions early on [around] what will people in North Carolina, what will people Arizona, in Detroit, what will they think is a reasonable comparison point.”

Impact of Executive Action

Late last year, President Obama announced executive actions that would, among other things, extend eligibility for deferred action of deportation and work authorization for up to five million individuals. Such sweeping action has concrete ramifications for local governments and immigrant-serving organizations, noted moderator Kate Brick.

In particular, Philadelphia is concerned about notario and immigration services fraud that could prey on immigrants seeking to apply for deferred action. In response, the city has passed legislation cracking down on potential fraud. “We are requiring notarios, or anybody that serves immigrants, to register with the city, and we are requiring certain disclosures to be provided,” in their offices and advertising material, often in multiple languages, said Rodriguez.

Panelists agreed, however, that despite the challenges, executive action offers an immense opportunity for immigrant communities, and particularly for immigrant small business owners who may now have the opportunity to enter the financial mainstream for the first time.