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Immigrants As Entrepreneurs [New Jersey Business (NJ)](New Jersey Business (NJ) Via Acquire Media NewsEdge) They established our favorite restaurants, have been the shoemakers and tailors we've run to, and the cherished gardeners we've counted on. Today, New Jersey's immigrant entrepreneurs also have founded and head companies in many other fields, including those in which the state historically has been a leader. According to the 2010 US Census, more than one in five of New Jersey's 8.8 million residents was foreign born. The Hispanic or Latino community totaled nearly 1.6 million, or 17.7 percent of New Jersey's population. The total Asian population (725,726) accounted for about 8.3 percent of the state's population, including 292,256 Asian Indians (3.3 percent) and 134,442 Chinese (1.5 percent). State Department of Labor figures reflect the significant contributions these Asian Indian and Chinese entrepreneurs have made to the state's economy, with each accounting for 8.7 percent of the state's business ownership in 2007 - more than the national average for these ethnic groups. Nationwide, the Garden State ranks among the top six states for the concentration of immigrant-founded engineering and technology companies, reports the Kauffman Foundation of Entrepreneurship. These are companies in bioscience, computers/communications, defense/aerospace, environmental, innovation/manufacturing-related services, semiconductors and software. While the mix of immigrants varies by state, Kauffman reports the highest percentage of immigrant-founded engineering and technology firms are located primarily in the gateway states of California (31 percent), Massachusetts (9 percent), Texas (6 percent), Florida (6 percent) and New York and New Jersey (5 percent each). While in 2007, California led the states in the proportion of new high-tech companies with at least one immigrant founder with 39.6 percent, New Jersey has now taken over the top spot with 45.1 percent. Consistent with the national pro-file, Asian Indian- and Chinese-horn entrepreneurs are founding the majority of high-tech firms in New Jersey. Since 2006, Indians have founded an astounding 57 percent of all engineering and technology firms in the state; Chinese and German entrepreneurs each accounted for 9 percent of the high-tech firms. Anil Bansal, a founder, director and executive chairman of Iselin-based Indus American Bank and president of the Asian Indian Chamber of Commerce, suggests two main reasons New Jersey has become so attractive to Asian Indian science and technology-trained professionals. First, New Jersey was established as a major IT hub with AT&T Bell Labs, and many high-tech businesses were opened as offshoots of work at the Labs. Second, as a major pharmaceutical center, New Jersey attracted many Asian Indian chemists, engineers and technologists who pursued their higher education in the US, then worked for technical or pharmaceutical firms and ultimately started and grew related companies here. Pankaj Mohan, PhD, founder and CEO of Oncobiologics, Inc., Cranbury, is one such entrepreneur. Oncobiologics is a biopharmaceutical company that is developing next-generation biotherapeutics to address areas of oncology, immuno-oncology and immunology. Born in India, Mohan studied and taught in the United Kingdom and was transferred to the US - to Indiana - by Eli Lilly in 1999. He worked there for 14 years, then signed on with Genentech in California, and ultimately was offered a job at Bristol-Myers Squibb in New Jersey. "I knew I wanted to found my own company, so, molded my professional experience - both technically and from an entrepreneurial standpoint - to do that. With my 'large pharma' contacts here, New Jersey was the right state for me," he says. In March, just 15 months after starting the company in 2011, Oncobiologics has grown to nearly 40 employees and its operations are now funded by revenue instead of investor capital. "Considering how challenging it is to build a self-supporting company, especially in the biotech industry, I'm very proud of that," Mohan says. He attributes that achievement largely to the state's strong talent base and its welcoming attitude towards the biotech industry. Bansal, also born in India, received a technical degree in India and then obtained his master's degree in material science at the University of Notre Dame and an MBA at Syracuse University. Bansal was working for the US Department of Defense's Defense Advanced Research Projects Agency when he learned DARPA wanted to transfer him to Houston. Bansal's Indian-horn wife didn't want to move so far away from her family in New Jersey, so he was incented to start his own company. He opened a computer store and then launched a web-based business developing websites. In addition to the professional reasons for settling in New Jersey, Bansal believes Asian Indians are attracted to the state because it is close to New York, yet offers the physical land many prefer to have for their homes. Having their businesses in New Jersey also avoids the need to commute to New York and enables them to spend more time with their families. Also, because all immigrant groups typically feel safer and more secure living near each other, they appreciate the Asian Indian communities that have developed here. "Once immigrants create a neighborhood, the economic activity feeds on itself," Bansal says. "The growth of the Asian Indian community in the Edison area is not unlike the growth of the Cuban community in Union City." John Lau, president of Appliedinfo Partners, Somerset, was born in China and raised in Hong Kong. He and his family came to the US when he was 14 and settled in Chinatown, where Lau finished high school. He graduated from Stony Brook (NY) University with bachelor's and master's degrees in physics. "We truly saw America as the land of opportunity," Lau says. Bitten by the entrepreneurial bug, he got a job as an import-export trainee with DCH Trading, a family-owned company affiliated with the highly successful Hong Kong-based DCH Auto Group. He then used his technical training and analytical skills to learn how to program the company's first computer. "While I wasn't formally trained in business, I learned a lot by observing," Lau recalls. A former Stony Brook professor then introduced him to Citibank, where he received on-the-job management training in the technical area. From there, he moved to Shearson American Express as vice president of data communications and honed his managerial and people skills. Lau passionately wanted to start his own business, so he left Shearson and started a business in his basement: buying PCs from the "grave market" and reselling them. "It was the entrepreneurial spirit at work. I figured if it failed, I could get a job." After six years, he was grossing $100 million and had become an authorized Apple, IBM and Compaq reseller. He also had become aware of programs that encourage Fortune companies to work with minority vendors. He decided to liquidate his inventory and with his wife, Betty, start their current business, Appliedinfo Partners, an information technology and service business, which is in its 23rd year. Lau used a combination of his own savings and credit cards to start his business, but when he needed more money to grow the company, he didn't feel welcome at American banks, so he went to a Chinese bank in New York. He has since become very comfortable using American banks and believes there is little discrimination in lending today. In fact, as former chairman of the Chinese American Chamber of Commerce (CACC), Lau sees banks "knocking on doors" to lend to Asians. "They're good borrowers because, culturally, they're good savers; there's a high probability they'll pay you back." Also culturally, Chinese entrepreneurs look askance at set-asides, believing they are some sort of welfare program. Knowing otherwise, Lau educates Chinese entrepreneurs about minority- and women-owned business initiatives, as certification can help them attain government and corporate contracts. William Yeh, president and CEO of CSI Technology Group, Keasby (Woodbridge Township), came to the US from Taiwan on a student visa and obtained his graduate degree in engineering from New Jersey Institute of Technology. In addition to improving his English language and technical skills, being at NJIT exposed him to the market opportunities in the exploding computer equipment sector and helped him gain the hacking that enabled him to found his first business: supplying computer equipment to government agencies. He secured a minority vendor contract with the State of New Jersey and then started selling smaller numbers of units to individual municipalities. His company was doing well when a new opportunity arose in 1997. The Atlantic County Prosecutor's Office, one of CST's equipment clients, asked Yeh to develop software for criminal case tracking. Through word of mouth on the system's success, variations of the initial software, which has undergone significant development over the past 15 years, are now installed in the offices of all 21 County Prosecutors, the Attorney General's office, the State Police, the Board of Public Utilities and the state Supreme and Appellate courts. CSI custom applications also are installed with the North Carolina Attorney General, New Mexico Public Defender and the Oklahoma Department of Corrections. The company has grown to 73 employees - 47 in the US - and through Yeh's contacts in Taiwan, CSI has demonstrated its latest product, a Computer Aided Dispatch/Records Management System for use by government agencies, that it plans to show in other Asian countries. Franchise Mavins Immigrants also have proven extremely successful as franchise owners. Celestina Quintana emigrated to the US from Spain at the age of nine with her parents and seven siblings. Both factory workers, her parents had to borrow money to pay for their passports. they settled in Newark, where there were plenty of factory jobs, and "thanked the Lord" for allowing them to come to America. With the opportunities afforded them in the US, they truly believed, "If you don't make it here, you won't make it anywhere." Quintana started "working" at age 10 - babysitting, helping out at church Bingo nights for tips and as a dental assistant. She loved working, and from that time on, "no one ever bought me a piece of clothing." At 28, claiming she "knew as much about business as about going to the moon," Quintana and a girlfriend started a clothing store in Harrison and, two years later, opened a second shop in Newark. They ultimately closed the Harrison store, but the Newark store was so successful that when Quintana wanted to "branch out," she sold the store and, with acceptance into the McDonald's franchise program, used that capital, her entire life savings, to invest in her first McDonald's restaurant. "McDonald's is so inclusive to minorities, women, African Americans, Asians, Latinos ... that's certainly one of the things that drew me to the company," Quintana says. In February, she celebrated her 20th anniversary as the owner and operator - with her husband and children - of five McDonald's franchises in Jersey City, three in Newark, and one each in East Orange and Irvington. "When we came to the US, my parents didn't come for a handout, but for a job," Quintana recalls. "There was no sense of entitlement; they didn't expect the country to give them anything. They expected to work hard. If more people would take advantage of the opportunities this country offers, we'd be much better off." Money Matters One of the most difficult challenges all entrepreneurs face - but immigrant entrepreneurs, in particular - is raising capital, especially for startups. Oncobiologics' Mohan feels fortunate he was able to secure seed money through a government grant that "gave me the courage to start my company." He also received invaluable assistance from the Raritan Valley Community College Small Business Development Center and $3 million in government-backed SBA loans through Hopewell Valley Community Bank. But along the way, he had to rely on "angel" contacts. He suggests that state incentives such as providing tax benefits for "angels" might result in more private investment in job-creating ventures. Meanwhile, just as Chinese and Korean banks were formed to support their respective ethnic customers, Indus American Bank was established in 2005 to support the South Asian population through its headquarters in Iselin and branches in Jersey City, Parsippany and Hicksville, New York. "It wasn't that Indians were being discriminated against in lending, but all new immigrants find it easier to deal with their own kind," says Indus American's Bansal. "It's the same with any ethnic group; they find it easier to communicate with those who speak their language and understand their culture." Andrew Appow is a partner and Joanne Lee a staff accountant with The Mironov Group, Edison. Chinese by birth, Appow was raised and came to the US with his parents from Jamaica at age 17. Lee came to the US from Korea. Lee initially worked for a small accounting firm that served Korean clients who were both linguistically challenged and were faced with following tax laws that were new to them. Mironov's immigrant clients, even the "old school entrepreneurs who were educated overseas, don't speak or read English well or use computers." they typically have assistants or comptrollers who help with the financial end of the business or hear something about certain tax issues and come to Mironov for further clarification. Appow agrees that financing can be a particular challenge for immigrant entrepreneurs. "Many of the small, immigrant-owned businesses do not have good bookkeeping or financial records, and their tax returns may not reflect those of a credit-worthy prospect. This often prevents them from having access to funds from national institutions." Lee adds Asians often are inclined to use funds from family members, as it's perceived as 'free' money; interest typically isn't charged for money loaned to relatives. "Of course, there's a problem if more money is needed than the family can come up with because they never borrowed money from a bank before, so there is no credit history." Conclusion Whatever their heritage, immigrant entrepreneurs have many characteristics in common: They came to the US because it's "the land of opportunity"; they studied and worked hard; and they didn't expect hand-outs. Above all, they embraced the entrepreneurial spirit with their persistence, energy, enthusiasm and dedication - all characteristics that certainly have contributed to their success. (c) 2013 New Jersey Business & Industry Association |