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Immigrant Entrepreneurs Are Leading the Way for High-Tech Companies

JAECKLE FLEISCHMANN & MUGEL, LLP • www.jaeckle.com

A study by Duke University and University of California at Berkeley concluded that over 25 percent of engineering and technology companies started in United States between 1995 and 2005 had a least one key founder who was an immigrant to the United States.1 According to the study, almost 80 percent of immigrant founded companies were in the field of software or innovation/ manufacturing-related services. These companies generated an estimated $52 billion in sales in 2005 and employ nearly 450,000 workers in the U.S.

“The percentage of international patent applications filed by immigrant inventors from the United States has more than tripled since 1998.”
Not only are immigrants to the U.S. founding cutting edge companies, but they are also making significant contributions to the development of intellectual property. The study examined the World Intellectual Property Organization (WIPO) Patent Cooperation Treaty (PCT) records revealing that an estimated 24.2 percent of

1 Master of Engineering Management Program, Duke University and School of Information, U.C. Berkeley, America's New Immigrant Entrepreneurs (Jan. 4, 2007). 2 Stuart Anderson and Michaels Platzer, American Made: The Impact of Immigrant Entrepreneurs and Professionals on U.S. Competitiveness (Nov. 2006), available at: http://www.nvca.org/pdf/AmericanMade_study.pdf continued on page 2

IMMIGRATION TOPICS

A study commissioned by the National Venture Capital Association (NVCA) also looked at the growing number of immigrants starting venturebacked companies. 2 This study analyzed the founders of all venture-backed public companies and found that over the last fifteen years, 25 percent of those companies were founded by immigrants. The greatest numbers of immigrant-founded companies are in the high-tech-

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nnovation is key to moving companies and the global economy forward. But where are innovation and progress coming from in recent years? Two studies have found that immigrant entrepreneurs are increasingly starting new high-tech companies in the United States

international patent applications filed from the United States in 2006 had immigrant inventors or co-inventors. This is more than triple the percentage filed by immigrant inventors in the United States in 1998. Immigrant patent applications are most often in the areas of chemistry, human necessities including medicine, electricity generation and communications.

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Immigrant Entrepreneurs Are Leading the Way for High-Tech Companies
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Jaeckle Fleischmann & Mugel, LLP BUFFALO 12 Fountain Plaza Buffalo, New York 14202-2292 Phone: 716.856.0600 Fax: 716.856.0432 AMHERST 400 Essjay Road, Suite 320 Amherst, New York 14221-8228 Phone: 716.250.1800 Fax: 716.250.1806 ROCHESTER 190 Linden Oaks Rochester, New York 14625-2812 Phone: 585.899.2930 Fax: 585.899.2931 PHOENIX 7047 East Greenway Parkway, Suite 250 Scottsdale, Arizona 85254-8113 Phone: 480.659.2213 Fax: 480.659.3419

nology sector, where 40 percent of companies operating today were founded by immigrants. These companies, primarily in the high-tech manufacturing, information technology and life sciences industries, are transforming technology and creating jobs; immigrant founded venture-backed public companies employ an estimated 222,000 workers in the United State and account for more than half of the employment generated by public venture-backed high-tech manufacturers. Immigrant founded venture-backed public companies are not only innovative but successful, boasting market capitalization exceeding $500 billion. Immigrants are also having a strong impact among venture-backed private companies. Of the companies responding to the NVCA survey, 47 percent were founded by immigrants and almost two-thirds of those have started or intend to start more companies.

immigrant founded venture-backed public companies, followed by immigrants from Israel (12 percent) and Taiwan (11 percent).

“Foreign nationals were awarded 55 percent of Master’s degrees and 67 percent of Ph.D.s in electrical engineering from U.S. universities in 2005.”
Many immigrants come to the United States for educational opportunities and then remain in the U.S. to pursue professional goals including starting new companies. Foreign nationals were awarded 55 percent of Master’s degrees and 67 percent of Ph.D.s in electrical engineering from U.S. universities in 2005, according to the NVCA study. Integrating immigrant innovators into an existing business or spinning off new companies with immigrant founders can present unique challenges, but these challenges should not prevent a company’s growth. Jaeckle Fleischmann is well prepared to assist universities, emerging companies and funders that are confronted with these issues. If you have any questions regarding immigration, intellectual property, venture capital, or business start-up matters, please contact Daniel P. Joyce at 716.843.3945 or djoyce@jaeckle.com or J. Montieth Estes at 585-8992949 or mestes@jaeckle.com.
Thank you to Marissa A. Coheley, University at Buffalo Law student and Legal Intern, for assistance in the preparation of this article.

IMMIGRATION ATTORNEYS Daniel P. Joyce (NY, PA) 716.843.3945; djoyce@jaeckle.com Tehsheng (Abby) Ma (NY,) 716.843.3905; ama@jaeckle.com Thomas E. Brydges (NY) 716.843.3812; tbrydges@jaeckle.com PARALEGAL Sharon L. Darisse 716.843.3946; sdarisse@jaeckle.com
ADMISSIONS INFORMATION by state, follows respective attorney name
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Where are these Entrepreneurs Coming From?
Immigrants from over 60 countries have founded engineering and technology companies in the United States. Both studies report that nationals of India started the most companies. According to the DukeBerkeley study, Indian immigrants founded more engineering and technology companies from 1995-2005 than immigrants from the United Kingdom, China, Taiwan and Japan combined. The NVCA study reports that Indian immigrant entrepreneurs have founded 22 percent of the

This Jaeckle FYI, prepared by the attorneys at Jaeckle Fleischmann & Mugel, LLP, is intended for general information purposes only and should not be considered legal advice or an opinion on specific facts. For more information on these issues, contact one of the attorneys listed above or your existing Firm contact. Prior results do not guarantee a similar outcome. The invitation to contact is not a solicitation for legal work in any jurisdiction in which the contacted attorney is not admitted to practice. Any attorney/client relationship must be confirmed in writing.

JAECKLE FLEISCHMANN & MUGEL, LLP
© Jaeckle Fleischmann & Mugel, LLP 2007.

For FYIs on additional topics, or more information about Jaeckle Fleischmann & Mugel, LLP visit our website at www.jaeckle.com. ,


				
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posted:5/25/2009
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