Lowering Institutional Barriers for Immigrant Entrepreneurs

How can local planning and policy efforts better support immigrant entrepreneurs? Immigrant-owned businesses not only generate jobs and economic activity in the local economy but are vital parts of the social fabric of many neighborhoods.

In "Immigrant Entrepreneurship and Economic Development," Xi Huang and Cathy Yang Liu examined economic development policies in 16 "welcoming" cities — cities outside traditional immigrant gateway cities. Their article in the Journal of the American Planning Association (Vol. 85, No. 4) reviews 20 local business development policy types geared towards immigrant entrepreneurship to discover if any policy gaps exist in supporting immigrant entrepreneurship.

Supporting Immigrant Entrepreneurs in Cities

The authors found that many programs already exist, particularly in cities that are not considered to be traditional gateway cities, however, those programs do not fully meet the needs of immigrant entrepreneurs. Instead, the unaddressed needs are dealt with in ways outside of existing policy.

Immigrant entrepreneurs face many challenges in starting and financially managing their businesses. Language barriers, xenophobia, and racism, particularly for immigrants from Latin America and Asia, prevent immigrant entrepreneurs from accessing wider markets and additional capital. Immigrants are also underrepresented in capital-intensive industries, like real estate.

Even with all of these barriers, immigrant-owned businesses have proven to be resilient, generating more than $121 billion in 2010.

The welcoming cities in the policy analysis are located in the Sun Belt and the Rust Belt and include cities like Pittsburgh and Atlanta. The authors present the case that these cities, particularly cities in the Rust Belt, are very interested in attracting immigrants to their cities to compensate for the loss of population in recent decades. Because of this, they have developed new programs to attract immigrants and support their entrepreneurial endeavors.

One crucial finding from this analysis is that municipalities often focus on disseminating existing information effectively and work to help immigrants overcome language barriers that would prevent them from accessing institutional support. While these certainly address some of the gaps in knowledge that immigrants experience, they are not enough to effectively support immigrant businesses.

The authors did their work before COVID-19 became a pandemic. That crisis and others have exposed how institutions continuously fail to help so many. The institutional barriers that maintain structures of marginalization and inequity are ubiquitous in our society.

For many immigrants and the communities in which they live, government agencies like ICE and a variety of institutions continuously demonstrate racist and discriminatory practices.

Promoting existing institutions, economic development practices, services, and programs will not address an important issue that is mentioned a few times in this article: access to capital. The access to capital for immigrant entrepreneurs, and other American minority business owners, is essential for their small businesses to be successful.

Rethinking Institutions for Immigrant Entrepreneurs

While certain municipal programs may have been designed specifically to support immigrant entrepreneurs, many financial institutions were not designed to ensure that immigrant entrepreneurs and other minorities can maintain thriving businesses.

The authors offer suggestions from their assessment of economic development policies that would help immigrant entrepreneurs.

It is important for planners and planning students to think about how each city — because each has its unique challenges — can lower the barriers for immigrant entrepreneurs. But more broadly, how can new institutions and programs be designed to meet the needs of those whose needs are not being met by current institutional structures? Doing this would also allow planners to completely rethink economic development practices to better serve all communities across the country.

Convening the necessary stakeholders to make the necessary changes will be difficult, but we must be willing to meet this challenge.

Top image: Family with store. Getty Images photo.