Immigrant businesses in knowledge-based industries

Traditionally, much of the research on immigrant-owned businesses focused on the ethnic economy, that is, the extent to which demand for specialized goods by particular ethnic groups provides opportunities for immigrant entrepreneurs in those communities. This is reflected in immigrant-owned grocery stores, restaurants, and other retail and service firms catering to niche markets. More recently, attention has shifted towards the role of immigrant entrepreneurs in the broader economy, and specifically in high-tech and knowledge-based businesses. Little is known about the nature of immigrant-owned businesses in Canada. Because of data limitations, studies have tended to centre on immigrant self-employment, thereby excluding large segments of immigrant business ownership. To address this gap, this analysis uses 2010 data from Statistics Canada’s Canadian Employer–Employee Dynamics Database to describe immigrant-owned firms, in particular the extent to which they are in knowledge-based industries (KBIs) or in more traditional industries such as retail trade and food services. In addition, differences in industrial distribution by immigrant class (family, refugee, business, and economic classes) are examined. This study builds on an earlier study based on the same data set, which showed that after a period of adjustment and integration, immigrants have a higher rate of business ownership than the Canadian-born (Green et al. 2016). However, immigrant-owned private incorporated companies tend to be smaller than those owned by the Canadian-born, with these firms employing an average of four and seven paid workers respectively. The rate of unincorporated self-employment is also higher among immigrants than the Canadian-born. The analysis focuses on two types of businesses. The first is private incorporated businesses, which are considered to be immigrant-owned if at least one owner is an immigrant. Owners with at least a 10% share of the company are identified. Only private incorporated businesses with employees are included. The second is businesses owned by the unincorporated self-employed. The vast majority of these businesses do not have employees. For about 55% of unincorporated self-employed immigrants, their business is their main economic activity and self-employment is their main source of earnings (Green et al. 2016). They are referred to as primarily self-employed and the businesses they own are included in this study. The remaining 45% are excluded because self-employment is a secondary economic activity as earnings from paid jobs exceed those from self-employment. Businesses owned by immigrants aged 18 to 69 who entered Canada since 1980 are the focus of the analysis. The comparison group consists of businesses owned by the Canadian-born plus immigrants who came to Canada before 1980 (collectively referred to as ‘the Canadian-born,’ as 93% were born in Canada).