International Diversity and Entrepreneurship in Louisville

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.)

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.

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).