International Diversity and Entrepreneurship in Louisville

Maude Toussaint-Comeau

Through small-business creation, immigrants foster job growth in our economy. Ethnic economies are important to the health of the regional economy as a whole. By forming clusters of services, sometimes in declining areas, immigrants create vibrant commercial corridors that strengthen and revitalize distressed communities, helping to spur overall economic growth.

Louisville, Ky., is one example of a city that is increasing in diversity due to international immigration, where ethnic minority or immigrant-owned businesses are profoundly affecting the area’s social and commercial vibrancy. Changes are noticeable in the cultural landscape, with new restaurants, houses of worship and a diverse range of goods in groceries that serve both immigrants and native-born residents. According to the most recent data available on the characteristics of businesses and their owners, in 2007 there were 52,778 firms in Jefferson County alone; 14 percent of those enterprises were ethnic/minority-owned. In the state of Kentucky, 5,559 Asian-owned businesses generated sales and receipts of $2.1 billion and employed 16,941 people; 3,663 firms were Latino-owned, with sales and receipts of $906.9 million, employing 6,705 people.1 There are major implications of this growing ethnic diversity and entrepreneurship in the Louisville area; discussions are needed regarding sustainability and encouragement of this growing business sector.

The Foreign-Born and the Self-Employed

International migration to Louisville began in the 1800s, when what is now the Scotch-Irish majority first established its roots. With regard to the more recent migration flows, the Japanese have the longest tenure in Louisville, with many arriving in the 1980s. In general, Asian groups migrated in the early 1990s and the years just prior. The next wave was made up of refugees from Bosnia to Somalia. Bosnians arrived after 1995, during and after the regime of ethnic cleansing in the former Yugoslavia. The typical Mexican immigrant worked as a laborer in the agricultural industries of local surrounding counties before moving into the city.

Louisville’s foreign-born population is still very far below the national average, but it has been growing rapidly. The city is part of a new group of places (which also includes Indianapolis, Ind.; Birmingham, Ala.; Knoxville, Tenn.; and Nashville, Tenn.) that are seeing bursts of foreign arrivals despite a history of not receiving many immigrants. These cities experienced a doubling of their immigrant population during the first decade of the 21st century. According to the U.S. Census, Louisville’s overall population increased by 10.5 percent during the last decade. Almost half of that increase is due to immigration; between 2000 and 2010, the immigrant population increased from 30,600 to 61,615. All of the 13 counties in the Louisville Metropolitan Statistical Area (MSA) experienced this demographic shift, with Jefferson County receiving the highest share of foreign nationals. More than two-thirds of immigrants in the Louisville MSA now reside in Jefferson County. (See Table 1 below.)

TABLE 1

Foreign-Born Population in the Louisville MSA


County Population 2000 (Total) Foreign-Born Population 2000 (Share) Population 2010 (Total) Foreign-Born Population 2007-2011 (Share)
Jefferson 693,600 3.4% 741,096 6.1%
Clark 96,500 1.8% 35,613 1.5%
Shelby 33,300 3.9% 42,074 5.8%
Floyd 70,800 1.1% 39,451 0.4%
Meade 26,300 1.9% 28,597 1.6%
Nelson 37,500 1.3% 43,437 1.5%
Bullitt 61,200 0.7% 74,319 1.1%
Harrison 34,300 0.9% 18,849 1.3%
Henry 15,100 1.3% 15,416 1.4%
Oldham 46,200 1.5% 60,316 4.0%
Spencer 11,800 0.8% 17,061 1.1%
Trimble 8,100 1.2% 8,809 1.6%
Washington 10,900 0.9% 11,717 1.7%

SOURCE: U.S. Census

Close to half of the immigrant self-employed businesses in Kentucky are located in the Louisville metropolitan area and surrounding counties.2 Table 2 (below) compares the characteristics of self-employed individuals in the state who are foreign-born versus native-born. Immigrants are 22 times more likely to be self-employed than are native-born workers—close to 40 percent of immigrants are self-employed compared with just above 30 percent of the native-born population, although the latter are more likely to have incorporated businesses. The highest proportion of Kentucky’s immigrants comes from Asia, followed by Latin America, Europe, North America and Africa. Immigrants who are self-employed tend to be younger than their native-born counterparts, and include a higher proportion of females. More than two-thirds speak English well or very well. A good portion of immigrants from the last two decades have assimilated into the economy through self-employment. A dichotomy is observed at both ends of the educational attainment spectrum for self-employed immigrants with low educational attainment (less than a high school diploma) and high educational attainment (a college degree or more), with both well represented.

TABLE 2

Characteristics of Self-Employed in Kentucky


  Foreign-Born Native-Born
Employment
Self-employed (out of those working) 38.00% 31.00%
Work in incorporated businesses 55.04% 66.36%
Work in unincorporated businesses 42.01% 30.06%
Work unpaid / family member 2.95% 3.58%
Country of Origin
U.S. 99.38%
Puerto Rico (U.S. territory) 0.10%
Latin America 29.24%
Asia 37.10%
Europe 22.60%
Africa 2.95%
North America 7.62%
Oceania 0.49%
Educational Attainment
Less than high school diploma 21.60% 17.24%
High school diploma 21.87% 32.54%
College and above 56.51% 43.44%
Other Demographics
Average age 45 50
Female 38.57% 33.71%
Married 71.99% 71.89%
Language Proficiency
Speak English well / very well 79.36%
Speak English not well / not at all 20.65%
Period of Entry to the U.S.
1970s or earlier 30.22%
1980s 19.16%
1990s 33.17%
2000 or later 17.44%

SOURCE: Author’s calculations based on 2005-2009 ACS; figures are for the state of Kentucky.

The industries that attract the most self-employed immigrants are health services, entertainment, construction and professional services. (See Figure 1 below.) Among those working in the health services industry, 67 percent are employed in medical offices and/or as physicians. In the entertainment category, 66 percent work in eating and drinking establishments. The most common businesses in the professional services category include management and technical consulting (17 percent); landscaping (10.4 percent); and services to buildings and dwellings, cleaning and maintenance (17 percent). Also included in this category are nail salons (29 percent); private household service (24 percent); personal and household goods repairs (15 percent); and automotive repair and maintenance (10 percent).

FIGURE 1

Industry Distribution of Self-Employed Foreign-Born


Figure 1

SOURCE: Author's calculations based on 2005-2009 ACS; figures are for the state of Kentucky.

Conclusion

With a high propensity to choose self-employment, and spanning both ends of the educational and skills spectrums, immigrant entrepreneurs are making their mark in a full range of businesses and industries in the Louisville area. And with a fast pace of assimilation into self-employment—some are business owners just a decade after arrival in the U.S.—new immigrants and their businesses seem poised to bring value to the region and help solidify its economic health.

Opportunities exist to help strengthen and support immigrant entrepreneurs. Many of these entrepreneurs have low educational attainment and do not speak English. They can be expected to find it more difficult to navigate the requirements of business ownership, which in turn might undermine the viability of their business ventures. Also, refugees (who often abruptly leave their native countries) are likely to be less connected to a network than other immigrant groups. Programs such as RISE (Refugees and Immigrants Succeeding in Entrepreneurship) that help economic development among refugees and immigrants may provide the support these individuals need.

On the whole, more questions remain than answers. More data are needed to measure the full scope of immigrant businesses and their economic impact. Equally important is understanding the extent to which immigrant business owners are accessing financial institutions, which is key to sustaining their businesses. The more recent flow of immigration into Louisville presents an unfolding case for understanding through analysis the opportunities and challenges faced by immigrants nationally, as well as the value they bring as entrepreneurs to emerging immigrant-receiving places in the U.S.

Endnotes

  1. U.S. Census Bureau, Survey of Business Owners. [back to text]
  2. The data used for the analysis in this section are the American Community Survey (ACS), 2005-2009 five-year estimates. The data are available only at the state level and PUMA (Public Use Micro Areas). Slightly more than half of the immigrant self-employed/businesses in the state are in the PUMAs that are included in the Louisville metropolitan area and surrounding counties. [back to text]

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