Asian American businesses have huge impact on US economy

Asian Americans businesses have helped shape Silicon Valley.

From the nail salons in Manhattan to the tech companies in Silicon Valley, from the grocery stores in Chinatown to the motion picture production studios in Los Angeles, from the ubiquitous Chinese American restaurants in almost every city to the Panda Express franchise, Asian American entrepreneurs have had a huge impact on the US economy.

In 2020, there were 612,194 Asian-owned businesses employing about 5.2 million in the United States, the highest among all minority groups, according to the US Census.

Even though AANHPI make up only 7% of the US population, their economic impact as consumers and entrepreneurs far surpasses their relatively small numbers, says the US Census.

As the US population has become more diverse, so has ownership of the nation’s businesses.

There were more Hispanic-owned businesses overall and more minority-owned businesses in various sectors in 2020 than a decade earlier, according to the Census Bureau’s 2021 Annual Business Survey (ABS).

The diversity of business owners mirrors the changing profile of the nation’s population. The 2020 Census found that the population of nearly all race and ethnicity groups in the United States had grown since 2010 with the exception of the White alone population, which declined during the decade.

A large share of Asian-owned firms — 23.8% — were in the Accommodation and Food Services sector in 2020. The number of Asian-owned businesses in this sector far outnumbered ownership by other minority groups.

Asian-owned businesses had the largest estimated receipts ($841.1 billion) among minority race groups.

Several entrepreneurs of Asian descent have helped shaped Silicon Valley, from David Sun and John Tu of Kingston Technology to Yahoo co-founder Jerry Yang. Among Door Dash's founders are Andy and Stanley Tang.

Among the most successful Asian American women entrepreneurs is Vera Wang, the designer who gained fame for her bridal collection and show-stopping red-carpet dresses.

Despite the lack of Asian American representation in Hollywood films, one of the most successful movie producers is Dean Devlin, a Filipino American who helped put together the recent Godzilla remakes and counts Independence Day and the Stargate franchises among his most successful productions.

In total, in 2020 there were a total 5,775,258 US firms in all sectors. They employed about 129,363,644 workers and had total annual payroll of $7.3 trillion.

Approximately 20% or 1.2 million of these employer businesses were owned by minorities. They employed about 9.9 million employees and had annual payroll of $357.4 billion.

 Other highlights of the Census report:

• Veteran-owned businesses had an estimated $926.7 billion in receipts, 3.6 million employees, and $176.6 billion in annual payroll.

• Women-owned businesses had an estimated $1.9 trillion in receipts, 10.9 million employees, and $432.1 billion in annual payroll.

• The number of Hispanic-owned businesses grew about 8.2% from 346,836 in 2019 to 375,256 in 2020 and made up about 6.5% of all businesses with an estimated $472.3 billion in annual receipts, 2.9 million employees, and about $105.6 billion in annual payroll

• There were an estimated 140,918 Black- or African American-owned businesses with $141.1 billion in annual receipts, 1.3 million employees, and about $42.2 billion in annual payroll. About 27.5% or 38,819 of these businesses were in the Health Care and Social Assistance sector.

• There were an estimated 40,392 American Indian and Alaska Native-owned businesses with $39.7 billion in receipts, 243,523 employees, and about $9.6 billion in annual payrolll.

• There were an estimated 8,822 Native Hawaiian and Other Pacific Islander-owned businesses with approximately $8.8 billion in receipts, 60,129 employees, and $2.3 billion in annual payroll.

EDITOR'S NOTE: For additional commentary, news and views from an AANHPI perspective, follow @DioknoEd on Twitter.

A $30 million fund launched to bolster start-ups led by founders of Asian descent

Having impacted Hollywood since it was founded four years ago, Gold House is turning its attention to Silicon Valley.

Gold House, the premier collective of Asian and Pacific Islander leaders, launched  its $30 million fund — Gold House Ventures — to deliver market-first social impact in corner offices. 

"Gold House was forged to rewrite a history that's been handed to us. It's time to ensure that what we believe is who we can become — not just for the API community but for all communities through equitable hiring, multicultural consumer engagement, and collective economic success," said Bing Chen, President of Gold House and General Partner of Gold House Ventures.

The fund invests in founders of API descent; corrals capital through its preeminent investor network; delivers industry-focused accelerators; provides extensive marketing and talent recruitment support; and contributes 100% of management fees and profits back to Gold House to further the nonprofit's history-making work.

Asians are among the least likely demographic to be promoted to management. In technology, Asians account for ~30% of the total workforce but are less than 14% of executive ranks and single digits in the C-Suite and boards. However, an estimated 16% of the top companies founded in the last decade have at least one API founder (despite being 7% of the nation's population) while nearly 42% of last year's Forbes Midas list was API — underscoring an opportunity to remove the ceiling by founding companies.

RELATED: 

• AAPI hit a bamboo ceiling in Silicon Valley
• AAPI women challenge culture of Silicon Valley
• Asian immigrants transforming Silicon valley

Gold House Ventures invests across industries and stages — always in lockstep with world-class investors. Investing partners include Accel, Alley Corp, Bain Capital, Basis Set, Bling Capital, CircleUp, Coatue, Decibel, Eniac, Floodgate, General Catalyst, GGV, Goodwater, Graph Ventures, Imaginary Ventures, Juxtapose, Lightspeed, Maveron, Mayfield, NEA, Northzone, Tribe, Trinity, Upfront, Wing VC, and Xfund.

"Many iconic companies are founded and run by API entrepreneurs. We want to back the next generation of great API founders and shine a spotlight on their success to inspire more to pursue their entrepreneurial dreams," said Eric Feng, GP of Gold House Ventures and former GP at Kleiner Perkins.

Gold House Ventures' investors include C-suite executives of major corporations; successful API founders (Binance Labs, YouTube, Twitch, DoorDash, Credit Karma, Zuora, Zola, FiscalNote, Honey, GOAT, and more); and cultural leaders with business success such as lifestyle icons Eva Chen, Michelle Phan, Padma Lakshmi, and Prabal Gurung; Grammy-winning musicians Anderson .Paak, Agnez Mo, Dumbfoundead, and Transparent Arts; artists Bowen Yang, Daniel Dae Kim, Gemma Chan, and Ronny Chieng.

Gold House has a long history of supporting diverse entrepreneurs through the leading API founder network, marketing benefits via extensive media and entertainment partnerships, and accelerators like Gold Rush (the preeminent API founder accelerator), — whose new, biannual class also debuts today.

"Since Gold Rush launched three years ago, alums have raised over $370 million in follow-on funding, with women representing over half of our participants and the ethnic diversity of each cohort reflecting API representation in the U.S.," said Megan Ruan, GP of Gold House Ventures.

EDITOR'S NOTE: For additional commentary, news and views from an AAPI perspective, follow @DioknoEd on Twitter.

Asian immigrant entrepreneurs invigorate California's economy

By David Wagner
REPRINTED WITH PERMISSION OF KPCC

Immigrants take big risks coming to California. When they get here, many decide to take another risk: launching their own company.

Immigrants are actually more likely to start a business than people born here. California consistently ranks as one of the states most reliant on immigrants for new business creation.

“California is very much a hotbed of immigrant entrepreneurship,” said Harvard Business School professor Bill Kerr.

Nationwide, about 25% of new companies are founded by immigrants, according to Kerr’s research. But that rises to about 42% in California.

Immigrants in California are starting everything from strip mall restaurants to some of the state’s largest employers — and they’ve shaped California’s economy in the process.

Chancee Martorell, executive director of the Thai Community Development Center, is trying to keep that entrepreneurial spirit alive in the heart of Los Angeles’s Thai community.

“Otherwise, you end up just seeing a community of chain stores that really have no history in the community,” Martorell said.

Later this year, her nonprofit will open a new food hall called the Thai Town Marketplace. It’s currently under construction in East Hollywood. The stalls will be run by low-income immigrants starting their first businesses.

The Thai Community Development Center is building the food hall, and will provide small business training, charging each stall owner below market-rate rent.

“They just need to bring the stove, the oven and their ingredients,” Martorell said.

The Thai Town Marketplace has been Martorell’s passion project for more than a decade. She led the campaign to officially designate this neighborhood as Thai Town 20 years ago.

Since then, she has seen rents for commercial space going up, and low-income entrepreneurs still struggling to get traditional bank loans.

Martorell wants this food hall to maintain Thai Town’s cultural identity, and give today’s immigrants their shot at opening a small business.

“We really have to work hard to preserve mom and pop, immigrant-owned businesses,” she said. “Because it's becoming more and more difficult, challenging and riskier — and just economically not feasible for them to continue.”

Iririn Srirada will have a prime piece of real estate in the food hall. Her stall will face the sidewalk. She’s calling it So Zaap.

"It means delicious. So delicious,” Srirada said.

She moved to L.A. 14 years ago from Northeastern Thailand. She’s currently testing out her budding food business a few days a week at the East Hollywood Farmers’ Market.

One recent afternoon, dad was helping out, grinding fresh ingredients with a mortar and pestle for a spicy and sweet papaya salad.

"I'm trying to bring in Thai food that's authentic,” Srirada said, “from the beginnings of my family, making it that real way."


L.A. has the largest Thai population outside of Thailand. Srirada is betting a lot of people here crave something closer to what they’d get back in Thailand.

JAMES BERNAL /KPCC

Customers flock to this Thai food stall in the Los Angeles farmers' market.

Since coming to L.A., she’s had a lot of different jobs. She’s driven for Uber, and been a server in a restaurant. She prefers being her own boss.

"It's a happier situation than being under someone,” Srirada said. “It's just better.

Working in someone else’s restaurant wasn’t ideal, she said, but it’s where she discovered a valuable skill.

“They didn't have sweet desserts,” Srirada said. “So I made mango sticky rice for them.”

It was a hit with customers. She branched out, selling her food at a Thai temple in North Hollywood. So Zaap is her first attempt at starting her own business.

It’s hard, tiring work. But she said, “I love it a lot, and I hope that everything goes well."

Why immigrants are more likely to start a business

Back in Thailand, Sririda had a successful career in the makeup industry. Her original plan coming to Los Angeles was to break into Hollywood as a makeup artist for film and TV. But she couldn’t get her foot in the door.

That’s a pretty common story for immigrants who launch their own companies, said Harvard’s Bill Kerr.

Immigrants may have difficulty transferring skills or degrees from their home country to the U.S. A lack of good job opportunities can push them into entrepreneurship.

“They may find starting their own company to be the most attractive option,” Kerr said.

But entrepreneurship is not a fallback for everyone. Many come to California with a specific business plan in mind.

“Especially if you are launching a scalable, nationally and internationally focused business,” Kerr said, such as a Silicon Valley tech startup.

Nearly half of California’s Fortune 500 companies were started by immigrants or the children of immigrants. And that’s a boon for job creation and tax revenue throughout the state.

“They are really the engines for our local economy,” said Linda Lopez, who heads the Los Angeles Mayor’s Office of Immigrant Affairs.

Lopez said nearly two-thirds of L.A.’s “main street” businesses — think dry cleaners, restaurants and nail salons — are immigrant-owned, according to a 2015 study

"[Immigrant-owned] businesses generate about $3.5 billion, or 45.6 percent of all self-employed income in the city,” Lopez said.

Back at the East Hollywood Farmers’ Market, Iririn Srirada has big plans for So Zaap. After a few years in the food hall, she hopes to move into her own space.

“We should open up more locations,” she said. “Here, we should have enough savings that I can go out and continue competing with others. I can keep going.”

The California Dream series is a statewide media collaboration of CALmatters, KPBS, KPCC, KQED and Capital Public Radio, with support from the Corporation for Public Broadcasting, the James Irvine Foundation and the College Futures Foundation.