Skip to main content
Log in

Immigration, opportunity, and assimilation in a technology economy

  • Published:
Theory and Society Aims and scope Submit manuscript

Abstract

We examine access to institutions and opportunity for entrepreneurs in a rising tech economy. A significant proportion of entrepreneurs and CEOs of tech firms in the American economy are either first- or second-generation immigrant minorities. Are these minority entrepreneurs assimilating into a rising economic elite? To what extent is the technology economy segmented by ethnic boundaries and sectors? On a range of empirical measures, including access to financial and social capital, firm performance, and normative beliefs on fairness and cooperation, we find second-generation immigrant minority tech entrepreneurs to be strikingly similar to their white counterparts. This study sheds new light on the institutional environment of a new regional technology economy, whereby barriers of entry are high in terms of human capital but economic competition is structurally and culturally open to immigrant minority entrepreneurs.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5
Fig. 6

Similar content being viewed by others

Notes

  1. In general, we use “immigrant minority entrepreneurs” and “minority entrepreneurs” to refer to non-White entrepreneurs who are either 1st or 2nd generation immigrants, while “white immigrant entrepreneur” refers to White immigrants from both generations. We use more precise language regarding generation when relevant to our analysis. “Native” entrepreneurs refers to entrepreneurs who were born in the United States from US-born parents (3rd + generation) regardless of race.

  2. Due to anonymity issues, we refrain from discussing national origins in more detail when considering the small number of individuals from certain countries, potentially making our survey’s respondents identifiable.

  3. We check the robustness of our results to different specifications of race in the robustness checks section.

  4. For the series of ANOVA tests that follow, we maximize the number of observations per test rather than keeping it constant with listwise deletions for the few missing observations across some tests but not others. If intergroup differences do exist, maximizing the number of observations per test is the more cautious and conservative approach given the small size of our population and some of our subgroups of interest. This being said, all the tests presented here were re-run with a listwise deletion approach to keep the sample constant across tests, and the results are identical to those presented here, save for two ANOVA tests—the proportion of those with a white collar father and the use of accelerator programs—for which significance fell below 0.05. These are available from the authors upon request.

  5. Cramér’s V for the association between nativity (first/s-generation/natives) and economic sector is 0.19. For the association between a binary specification of nativity (born abroad/born in the US) and economic sector, it is 0.187. For the association between a binary specification of race (White/non-White) and economic sector, it is 0.134. For the association between a 5-way specification of race (White/Black/Hispanic/Asian/Other) and economic sector, it is 0.179.

  6. In addition, we compared annual salaries among 154 respondents who had another job before founding a tech firm. The resulting graph (available upon request) is substantively identical to Figure 3.

  7. Regression analyses without inverse weighting show virtually identical results.

  8. These results are not included in this article due to space constraints but are available upon request.

  9. In these series of tests, note that we do not apply Bonferroni corrections since they make for more conservative tests. Applying Bonferroni corrections would be substantively meaningful in cases of apparently strong intergroup difference across our series of test, but since we do not find them here, we do not need to resort to that more conservative strategy. Had we found strong intergroup differences, we would have applied Bonferroni corrections as a robustness check.

References

  • Alba, R., & Nee, V. (2003). Remaking the American mainstream: Assimilation and contemporary immigration. Cambridge: Harvard University Press.

    Google Scholar 

  • Albion, R. G. (1939). The rise of New York port, 1815–1860. New York: Charles Scribner’s Sons.

    Google Scholar 

  • Baltzell, D. (1964). The Protestant establishment: Aristocracy and caste in America. New York: Vintage.

    Google Scholar 

  • Baomol, W. J. (2002). The free-market innovation machine: Analyzing the growth miracle of capitalism. Cambridge: MIT Press.

    Google Scholar 

  • Blau, P. M., & Schwartz, J. E. (1997). Crosscutting social circles: Testing a macrostructural theory of intergroup relations. New York: Routledge.

    Google Scholar 

  • Bonacich, E., & Modell, J. (1980). The Economic Basis of Ethnic Solidarity: Small Business in the Japanese American Community. Berkeley, London, and Los Angeles: University of California Press.

  • Bourdieu, P., & Passeron, J.-C. (1970). Reproduction in education, culture and society. London: Sage Publications.

    Google Scholar 

  • Bowman, N. A., & Park, J. J. (2014). Interracial contact on college campuses: Comparing and contrasting predictors of cross-racial interaction and interracial friendships. The Journal of Higher Education, 85(5), 660–690.

    Google Scholar 

  • Bowles, J., & Giles, D. (2012). New Tech City. New York: Center for an Urban Future.

    Google Scholar 

  • Brubaker, R., Loveman, M., & Stamatov, P. (2004). Ethnicity as cognition. Theory and Society, 33, 31–64.

    Google Scholar 

  • Chang, M. J., Astin, A. W., & Kim, D. (2004). Cross-racial interaction among undergraduates: Some consequences, causes and patterns. Research in Higher Education, 45(5), 529–553.

    Google Scholar 

  • Clemens, E. S., & Cook, J. M. (1999). Politics and institutionalism: Explaining durability and change. Annual Review of Sociology, 25, 441–466.

    Google Scholar 

  • Coleman, J. S. (1990). Foundations of social theory. Belknap: Cambridge.

    Google Scholar 

  • Cometto, M. T., & Piol, A.. 2013. Tech and the City: The making of New York’s startup community. Mirandola Press.

  • DellaPosta, D., & Nee, V. (2019). Emergence of diverse and specialized knowledge in a metropolitan tech cluster. Social Science Research, 86, 102377.

    Google Scholar 

  • DiPrete, T. A., Gelman, M. C. T., Teitler, J., & Zheng, T. (2006). Segregation in social networks based on acquaintanceship and trust. American Journal of Sociology, 116(4), 1234–1283.

    Google Scholar 

  • Dobbin, F. (2009). Inventing equal opportunity. Princeton: Princeton University Press.

    Google Scholar 

  • Dobbin, F., Sutton, J., Meyer, J., & Scott, R. W. (1993). Equal opportunity law and the construction of internal labor markets. American Journal of Sociology, 99, 396–427.

    Google Scholar 

  • Domhoff, G. W. (1967). Who rules America. Englewoods Cliffs: Prentice-Hall.

    Google Scholar 

  • Drouhot, L. G., & Nee, V. (2019). Assimilation and the second generation in Europe and America: Blending and segregating social dynamics between immigrants and natives. Annual Review of Sociology, 45, 177–189.

    Google Scholar 

  • Duncan, B., & Trejo, S. J. (2015). Assessing the socio-economic mobility and integration of U.S. immigrants and their descendants. Annals of the American Academy of Political and Social Sciences, 657(1), 108–135.

  • Edelman, L. B. (1990). Legal environments and organizational governance: The expansion of due process in the American workplace. American Journal of Sociology, 95, 1401–1440.

    Google Scholar 

  • Edelman, L. B. (1992). Legal ambiguity and symbolic structures: Organizational mediation of civil rights law. American Journal of Sociology, 97, 1531–1576.

    Google Scholar 

  • Feliciano, C., & Lanuza, Y. R. (2017). An immigrant paradox? Contextual attainment and intergenerational educational mobility. American Sociological Review, 82(1), 211–241.

    Google Scholar 

  • Florida, R. (2014). The rise of the creative class—Revisited. New York: Basic Books.

    Google Scholar 

  • Foner, N. (2000). From Ellis Island to JHFK: New York’s two great waves of immigration. New Haven and New York: Yale University Press and Russell Sage Foundation.

    Google Scholar 

  • Fox, C., & Guglielmo, T. A. (2012). Defining America’s racial boundaries: Blacks, Mexicans and European immigrants, 1890-1945. American Journal of Sociology, 118, 327–379.

    Google Scholar 

  • Glaeser, E. (2011). Triumph of the City: How our greatest invention makes us richer, smarter, greener, healthier, and happier. New York: Penguin Books.

    Google Scholar 

  • Gurin, P., Dey, E. L., Hurtado, S., & Gurin, G. (2002). Diversity and higher education: Theory and impact on educational outcomes. Harvard Educational Review, 72, 330–366.

    Google Scholar 

  • Hurtado, S. (1998). Enhancing campus climates for racial/ethnic diversity: Educational policy and practice. Review of Higher Education, 21, 279–302.

    Google Scholar 

  • Imoagene, O. (2017). Beyond expectations: Second-generation Nigerians in the United States and Britain. Oakland: University of California Press.

    Google Scholar 

  • Ignatiev, N. (1995). How the Irish became white. New York and London: Routledge.

    Google Scholar 

  • Jiménez, T. (2017). The other side of assimilation: How immigrants are changing American life. Berkeley and Los Angeles: University of California Press.

    Google Scholar 

  • Kao, G., & Thompson, J. S. (2003). Racial and ethnic stratification in educational achievement and attainment. Annual Review of Sociology, 29, 417–442.

    Google Scholar 

  • Kasinitz, P., Mollenkopf, J. H., Waters, M. C., & Holdaway, J. (2008). Inheriting the City: The children of immigrants come of age. New York and Cambridge: Russell Sage Foundation and Harvard University Press.

    Google Scholar 

  • Kelly, E., & Dobbin, F. (1998). The rise and decline of antidiscrimination enforcement. American Behavioral Scientist, 41, 960–984.

    Google Scholar 

  • Kerr, S. P., & Kerr, W. R. (2016). Immigrant entrepreneurship” NBER Working Paper Series, working paper 17–011.

  • Landes, D. (1969). The unbound Prometheus. New York: Cambridge University Press.

    Google Scholar 

  • Lee, J., & Zhou, M. (2015). The Asian American achievement paradox. New York: Russell Sage Foundation.

    Google Scholar 

  • Light, I. (1973). Ethnic Enterprise in America. Berkeley and Los Angeles: University of California Press.

    Google Scholar 

  • Light, I. (2005). Ethnic economy. In R. Swedberg & N. Smelser (Eds.), The handbook of economic sociology. Princeton and Oxford: Princeton University Press.

    Google Scholar 

  • Light, I., & Bonacich, E. (1991). Immigrant Entrepreneurs: Koreans in Los Angeles, 1965–1982. Berkeley and Los Angeles: University of California Press.

    Google Scholar 

  • Lobo, A., & Salvo, J. J. (2013). The newest new-Yorkers. 2013 Edition. New York: Department of City Planning.

  • Marshall, A. (1920) (Eighth edition). Principles of Economics. London: MacMillan.

  • Massey, D. S., & Denton, N. A. (1993). American apartheid: Segregation and the making of the underclass. Cambridge: Harvard University Press.

    Google Scholar 

  • Massey, D. S., Charles, C. Z., Lundy, G. F., & Fischer, M. J. (2002). The source of the river: The social origins of freshmen at America’s selective colleges and universities. Princeton: Princeton University Press.

    Google Scholar 

  • McPherson, M., Smith-Lovin, L., & Cook, J. M. (2001). Birds of a feather: Homophily in social networks. Annual Review of Sociology, 27, 415–444.

    Google Scholar 

  • Min, P. G. (2008). Ethnic solidarity for economic survival: Korean greengrocers in New York City. New York: Russell Sage Foundation.

    Google Scholar 

  • Molica, K. A., Gray, B., & Treviño, L. K. (2003). Racial Homophily and its persistence in newcomers’ social networks. Organization Science, 14(2), 123–136.

    Google Scholar 

  • Moretti, E. (2012). The new geography of jobs. Boston and New York: Houghton Mifflin Harcourt.

    Google Scholar 

  • Moykr, J. (1990). The lever of riches. New York: Oxford University Press.

    Google Scholar 

  • Morgan, S. L., & Galbgiser, D. (2014). Mexican ancestry, immigrant generation, and educational attainment in the United States. Sociological Science, 1, 397–422.

    Google Scholar 

  • Mulas, V., & Gastelu-Iturri, M. (2016). New York City: Transforming a City into a tech innovation leader. World Bank Reports.

  • Nee, V. (1998). Norms and networks in economic and organizational performance. American Economic Review, 88, 85–89.

    Google Scholar 

  • Nee, V. (2005). The new institutionalisms in economics and sociology. In N. J. Smelser & R. Swedberg (Eds.), The handbook of economic sociology (pp. 49–74). Princeton and New York: Princeton University Press and Russell Sage Foundation.

    Google Scholar 

  • Nee, V. K., Jeong-han, & Opper, S. (2010). A theory of innovation: Institutions, markets and the firm. Journal of Institutional and Theoretical Economics, 166, 397–425.

    Google Scholar 

  • Nee, V., & Opper, S. (2012). Capitalism from below: Markets and institutional change in China. Cambridge: Harvard University Press.

    Google Scholar 

  • Nee, V., & Alba, R. (2013). Assimilation as rational action in contexts defined by institutions and boundaries. In Rafael Wittek, tom a.B. Snijders, & victor Nee (Eds.) The Handbook of Rational Choice Social Research (pp. 355-380). Stanford: Stanford University press.

  • North, D. C., & Thomas, R. P. (1973). The rise of the Western world: A new economic history. Cambridge: Cambridge University Press.

    Google Scholar 

  • Owen-Smith, J., Powell, W., & Powell, W. (2004). Knowledge networks as channels and conduits: The effects of spillover in the Boston biotechnology community. Organization Science, 15, 5–21.

    Google Scholar 

  • Padgett, J. F., & Powell, W. W. (2012). The emergence of organizations and markets. Princeton: Princeton University Press.

    Google Scholar 

  • Pettigrew, T. (1998). Intergroup contact theory. Annual Review of Psychology, 49, 65–85.

    Google Scholar 

  • Pew Hispanic Center. (2013). Hispanic high school graduates pass whites in rate of college enrollment. Retrieved from http://www.pewresearch.org/fact-tank/2013/09/04/hispanic-college- enrollment-rate-surpasses-whites-for-the-first-time/ (August 2017).

  • Portes, A., & Zhou, M. (1993). The new second generation: Segmented assimilation and its variants. Annals of the American Academy of Political and Social Science., 530, 74–96. https://doi.org/10.1177/0002716293530001006.

    Article  Google Scholar 

  • Portes, A., & Rumbaut, R. G. (2001). Legacies: The Story of the Immigrant Generation. Berkeley & Los Angeles: University of California Press.

  • Powell, W. W., Koput, K. W., & Smith-Doerr, L. (1996). Interorganizational collaboration and the locus of innovation: Networks of learning in biotechnology. Administrative Science Quarterly, 41, 116–145.

    Google Scholar 

  • Powell, W. W., White, D. R., Koput, K. W., & Owen-Smith, J. (2005). Network Dynamics and Field Evolution: The Growth of Interorganizational Collaboration in the Life Sciences. American Journal of Sociology, 110, 1132–1205.

  • Rivera, L. (2012). Hiring as cultural matching: The case of elite professional service firms. American Sociological Review, 77, 999–1022.

    Google Scholar 

  • Ruef, M. (2010). The entrepreneurial group: Social identities, relations, and collective action. Princeton: Princeton University Press.

    Google Scholar 

  • Saxenian, A. (1996). Regional advantage: Culture and competition in Silicon Valley and route 128. Cambridge: Harvard University Press.

    Google Scholar 

  • Saxenian, A. (1999). Silicon Valley’s new immigrant entrepreneurs. San Francisco: Public Policy Institute of California.

    Google Scholar 

  • Saxenian, A. (2006). The new Argonauts: Regional advantage in a global economy. Cambridge: Harvard University Press.

    Google Scholar 

  • Schumpeter, J. A. (1934). The Theory of Economic Development:An Inquiry into Profits, Capital, Credit, Interest, and the Business Cycle. Cambridge: Harvard University Press.

  • Schneiberg, M., & Clemens, E. S. (2006). The typical tools for the job: Research strategies in institutional analysis. Sociological Theory, 14, 195–227.

    Google Scholar 

  • Senor, D., & Singer, S. (2011). Start-up nation: The story of Israel’s economic miracle. New York: Council of Foreign Relations.

    Google Scholar 

  • Skrentny, J. (1996). The ironies of affirmative action: Politics, culture and justice in America. Chicago: University of Chicago Press.

    Google Scholar 

  • Skrentny, J. (2002). The minority rights revolution. Cambridge: Harvard University Press.

    Google Scholar 

  • Storper, M. (2013). Keys to the City: How economics, institutions, social interaction, and politics shape development. Princeton: Princeton University Press.

    Google Scholar 

  • Waldinger, R. (1986). Immigrant enterprise: a critique and reformulation. Theory and Society, 15, 249–285.

    Google Scholar 

  • Warikoo, N. (2016). The diversity bargain: And other dilemmas of race, admissions, and meritocracy at elite universities. Chicago: University of Chicago Press.

    Google Scholar 

  • Waters, M. C. (2001). Black identities: West Indian immigrant dreams and American realities. Cambridge: Harvard University Press.

    Google Scholar 

  • Waters, M. C., & Jiménez, T. R. (2005). Assessing immigrant assimilation: New empirical and theoretical challenges. Annual Review of Sociology, 31, 105–125.

    Google Scholar 

  • Waters, M. C., Tran, V. C., Kasinitz, P., & Mollenkopf, J. H. (2010). Segmented assimilation revisited: Types of acculturation and socioeconomic mobility in young adulthood. Ethnic and Racial Studies, 33(7), 1168–1193.

    Google Scholar 

  • Waters, M. C., & Pineau, M. G. (Eds.). (2015). The Integration of Immigrants into American Society. Panel on the integration of immigrants into American society, committee on population. Division of behavioral and social sciences and education. Washington, DC: The National Academies Press.

    Google Scholar 

  • Wilson, K. L., & Portes, A. (1980). Immigrant Enclaves: An Analysis of the Labor Market Experiences of Cubans in Miami. American Journal of Sociology, 86, 295–319.

  • Zhou, M. (1992). Chinatown: The socioeconomic potential of an urban enclave. Philadelphia: Temple University Press.

    Google Scholar 

  • Zweigenhaft, R. L., & Domhoff, G. W. (1998). Diversity in the power elite: Have women and minorities reached the top? New Haven: Yale University Press.

    Google Scholar 

Download references

Acknowledgments

We thank Richard Alba, Daniel DellaPosta, Lisha Liu, Mario Molina, and two anonymous reviewers for useful comments on an earlier draft. Victor Nee gratefully acknowledges funding from the John Templeton Foundation, and he thanks Sonja Opper, principal investigator of a grant from the Marianne and Marcus Wallenberg Foundation.

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Victor Nee.

Additional information

Publisher’s note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Appendix

Appendix

Table 5 provides descriptive statistics on gender, age, parental occupation (whether or not the respondent’s parents were white-collar workers or professionals), family income at age sixteen (ranging from 1 “far below average” to 5 “far above average”), and whether or not the respondent holds a master’s degree or above. Most of these tech entrepreneurs are male; this is true across subgroups. Most come from socioeconomically advantaged families, with above-average family income and at least one parent—sometimes both—in white-collar or professional occupations. They are, unsurprisingly, highly educated; a high proportion holds a master’s degree or more.

Table 5 Mean values and (standard deviations) for background characteristics of tech entrepreneurs in NYC, by race & nativity (for F-tests: * = p < 0.05, ** = p < 0.01)

Analyses of variance and pairwise t-tests show significant differences in age, father’s occupation, and proportion of those holding a master’s degree or more. In particular, second-generation minority entrepreneurs are younger than all other subgroups, while first-generation immigrant minority entrepreneurs are more educated than all other subgroups. This latter difference, however, might reflect selection effects for immigrant tech entrepreneurs educated abroad.

Comparison of study sample to data from the American Community Survey

We ascertain the quality of our sample by comparing its demographic composition against that of self-employed individuals working in the software, data processing and internet and internet media industries in New York City in the 2013–2017 pooled data from the American Community Survey (see Table 6). This comparison is necessarily imperfect insofar as certain sectors of the tech economy in New York City (e.g., medical technology or advertising) are likely to get classified with non-tech equivalent in the ACS data, but the results are nevertheless useful.

Table 6 Mean values for demographic variables in the NY Tech Survey and the 2013–2017 pooled data from the American Community Survey for self-employed individuals working in select tech industries in New York City (for T-tests for cross-mean difference: * = p < 0.05, ** = p < 0.01). *

Our sample of CEOs is slightly younger and more male than the comparison population in the American Community Survey, but appears broadly comparable on other dimensions which are central to our study, such as nativity and race. While the ACS does not have data on parental nativity, such demographic similarity suggests our sample to be a robust empirical basis for our study.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Nee, V., Drouhot, L.G. Immigration, opportunity, and assimilation in a technology economy. Theor Soc 49, 965–990 (2020). https://doi.org/10.1007/s11186-020-09414-0

Download citation

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11186-020-09414-0

Keywords

Navigation