Cross a border with nothing but a suitcase, and — statistically — you become more likely to run a business than the people who never left. This holds across most of the OECD and across countries with wildly different immigration systems, from generous asylum states to employer-sponsored visa regimes. It is not true everywhere, and not by the margin the folklore suggests. But the pattern has held long enough, in enough places, that economists have stopped treating it as an anecdote about hustle and started treating it as a data series that needs an explanation with fewer adjectives and more mechanisms.
The numbers travel further than the myth
The headline figure comes from the OECD’s International Migration Outlook 2024, which devoted a full chapter to the subject. In 2022, 17 percent of the self-employed across OECD countries were migrants, up from 11 percent in 2006 — roughly 10 million people running their own enterprises, who between 2011 and 2021 added nearly 3.9 million jobs to their host economies. In the United States, the Kauffman Foundation’s startup index has tracked a similar climb: immigrants made up 28.5 percent of new entrepreneurs in 2014, against 13.3 percent in 1997, and an immigrant was, in the Foundation’s own words, “nearly twice as likely to be an entrepreneur as a native-born American.” In the United Kingdom, researchers working from Companies House filings found migrants behind roughly one in seven UK companies, with 17 percent of migrants having started a business against 10 percent of the UK-born.
| Market | What is measured | Migrants / foreign-born | Native-born / earlier baseline | Source |
|---|---|---|---|---|
| OECD average | Share of the self-employed who are migrants | 17% (2022) | 11% (2006) | OECD, International Migration Outlook 2024 |
| United States | Share of new entrepreneurs who are immigrants | 28.5% (2014) | 13.3% (1997) | Kauffman Index of Startup Activity |
| United Kingdom | Share of the group that has started a business | 17% of migrants | 10% of UK-born | Centre for Entrepreneurs / DueDil, 2014 |
Two honest caveats belong next to those numbers. First, most of the OECD’s climb from 11 to 17 percent is not migrants becoming more entrepreneurial one by one — it is migrant populations simply growing larger. The OECD attributes roughly four-fifths of the increase to that demographic growth, and only about a fifth to migrants individually becoming more likely to choose self-employment. Second, the UK figure has been challenged on methodology: it counts company directors by declared nationality rather than birthplace, and treats any co-founded firm as “migrant-founded” regardless of who the other founders were. The advantage is real. It is not always as large as the press release makes it sound.
Two rival explanations, both partly true
The oldest explanation is necessity: migrants start businesses because someone will not hire them. The OECD’s own data supports a version of this — in two-thirds of the countries it studied, newly self-employed immigrants were more likely than newly self-employed native-born workers to have come from unemployment rather than a job. A closed labour market, a foreign degree nobody will recognise, an accent that costs interviews at the shortlist stage: self-employment becomes the door that opens when the others do not.
The newer explanation runs closer to the reverse: migrants are not made entrepreneurial by rejection abroad; many were already inclined that way before they left. A 2021 study in the Journal of World Business tested this directly, surveying people at the point of deciding whether to migrate and tracking who actually went. Voluntary migrants showed measurably higher risk tolerance and a greater need for achievement than people who stayed put — the same traits that predict founding a company, present before the move rather than created by it. Emigration, on this account, is not a random draw from a population; it is a filter that a certain temperament is statistically more likely to pass through.
American survey data leans toward the second story more than the first. When the Kauffman-funded research group Opportunity America asked immigrant business owners why they had started, more than half said they had always wanted to own a business, and 40 percent cited flexibility and independence; fewer than 5 percent said they simply could not find other work. Necessity and self-selection are not mutually exclusive — a person can be both temperamentally drawn to risk and shut out of the job she trained for — but the balance between them is exactly the kind of thing a press release tends to flatten into one tidy sentence.
The advantage was never a personality trait broadcast from birth. It is closer to an inheritance tax paid in reverse: the act of leaving selects for the people willing to gamble, and the destination hands the survivors a financial system that will not lend to them.
The bank that already knows you
Whatever their motive, immigrant founders share a practical problem: they usually arrive with a thin or nonexistent local credit history, and mainstream banks price that thinness as risk. The Opportunity America survey found that just over a quarter of immigrant entrepreneurs had applied for and received a bank loan; 12 percent applied and were turned down, and 16 percent never applied at all because they expected to be. The gap left by formal credit is filled, diaspora after diaspora, by an institution older than any bank: the rotating savings circle, known as a tanda in Mexico, a susu among West Africans, a kye in Korea, a chit fund in India. Members contribute a fixed sum on a fixed schedule; the pooled pot rotates to a different member each round, interest-free, on the strength of nothing but reputation inside the group. A 2020 study of African immigrants in the United States, published in the Journal of Sociology & Social Welfare, found participation in these associations associated with a 27.2 percent rise in small-business ownership among savers, alongside a 13.6 percent rise in home ownership. The mechanism is not exotic. It is simply credit, running on trust where paperwork would otherwise be required.
The advantage has a shelf life
None of this makes the migrant-owned business a safer bet than its native-owned counterpart — often the reverse. The OECD found that in several countries, including Greece, Austria, Denmark, Switzerland and Portugal, immigrants are more than 50 percent more likely to exit self-employment than the native-born, and that exit more often lands them back in unemployment than in a wage job. The advantage, in other words, is a higher rate of starting, not a higher rate of surviving — a fact that fits both rival explanations at once. If the driver is necessity, some of these businesses were never meant to be permanent; they were meant to bridge a gap until wage work reopened. If the driver is self-selection for risk tolerance, then the same appetite for a long shot that produces more founders should also, honestly, produce more failures.
What the advantage is actually made of
Put the pieces together and “diaspora advantage” stops sounding like a compliment and starts sounding like a mechanism with moving parts: a population selected, by the act of leaving, for people more willing to bet on themselves; a labour market that often will not recognise what they already know how to do; and a substitute financial infrastructure, built inside the community rather than issued by a bank, that lets that willingness turn into a shopfront. None of the three pieces is sentimental, and none of them requires the migrant to be exceptional — only to be filtered, blocked, and networked in a specific way. That is a less flattering story than the one usually told at award dinners. For anyone building policy, or a bank product, around the phenomenon, it is also a more useful one.
