Immigrants are exceptionally important for U.S. technology development, accounting for almost half of the country’s Ph.D. workforce in science and engineering. Most notably, the contribution of Chinese and Indian scientists and entrepreneurs in U.S. high-technology sectors increased dramatically in the 1990s. These ethnic scientific communities in the United States further help transfer new technologies back to their home countries.Immigrants ; Technological innovations

William R. Kerr

English

Research Papers in Economics

U.S. Ethnic Scientists and Entrepreneurs
by William R. Kerr
April 1, 2007
ISSN 0428-1276
The data conﬁ  rm the growing sci-
entiﬁ  c contributions that ethnic 
inventors have been making in the 
United States, especially in high-
technology ﬁ  elds. In addition, 
related research using the same 
dataset ﬁ  nds that the beneﬁ  ts of 
immigration run in more than one 
direction: U.S. ethnic researchers 
make important contributions to 
the international diffusion of tech-
nology as well.
  Ethnic Patenting Data
Empirical studies of immigrant sci-
entists and engineers face substan-
tial data constraints. One source 
of potentially useful information 
that has not been exploited in such 
studies is the patent records of the 
U.S. Patent and Trademark Ofﬁ  ce 
(USPTO). Each patent ﬁ  led with 
the USPTO contains the name of 
at least one inventor, and multiple 
inventors are allowed. In total, 4.3 
million inventor names are associ-
ated with the 2.9 million patents 
that have been granted from 1975 
to 1999. 
I was able to map these inventor 
names into an ethnic-name data-
base that is typically used for com-
mercial marketing campaigns. This 
approach exploits the idea that 
inventors with the surnames Ming 
or Yu are likely of Chinese ethnic-
ity, Agrawal or Banerjee have a 
greater probability of being Indian, 
and Rodriguez or Martinez are 
likely of Hispanic descent. In cases 
of overlapping surnames (such as 
Lee), Census records are used to 
apportion ties. 
The match rate is 98 percent for 
inventors residing in the United 
States, and nine ethnicities can 
be distinguished: Chinese, Eng-
lish, European, Hispanic/Filipino, 
Indian/Hindi, Japanese, Korean, 
Russian, and Vietnamese. 
The USPTO grants patents to 
inventors living within and outside 
of the United States, with the latter 
accounting for just under half of all 
patents issued. Quality assurance 
exercises using the inventor records 
for those ﬁ  ling USPTO patents 
from abroad conﬁ  rm the approach 
works well. For example, 99 per-
cent of the inventors ﬁ  ling from 
Japan are found to be Japanese. 
Immigrants are exceptionally 
important for U.S. technol-
ogy development, accounting 
for almost half of the country’s 
Ph.D. workforce in science and 
engineering. Most notably, the 
contribution of Chinese and 
Indian scientists and entrepre-
neurs in U.S. high-technology 
sectors increased dramatically in 
the 1990s. These ethnic scientiﬁ  c 
communities in the United States 
also help transfer new technolo-
gies back to their home countries.
Federal Reserve Bank of Cleveland
Immigrants are critical to the for-
mation of U.S. technology. While 
they account for around 10 percent 
of the U.S. working population, 
immigrants represent 25 percent of 
the U.S. science and engineering 
workforce and almost 50 percent 
of those with doctorates. 
In addition to the number of sci-
entists immigrants add to the 
U.S. workforce, star immigrant 
researchers make an excep-
tional contribution in quality 
to the nation’s science as mea-
sured by Nobel Prizes, election 
to the National Academy of Sci-
ences, patent citations, and so on. 
The contributions of immigrants 
extend well beyond the laboratory, 
too. Ethnic entrepreneurs are also 
prominent in commercializing new 
technologies, especially in areas 
where high-technology ﬁ  rms are 
clustered, such as Silicon Valley.
The magnitudes of these ethnic 
entrepreneurial and scientiﬁ  c con-
tributions raise many research and 
policy questions on both short-
term and long-term horizons. This 
Economic Commentary highlights 
a new methodology for studying 
such contributions. The methodol-
ogy makes use of patent records 
for the information they contain 
about ethnic scientiﬁ  c and engi-
neering inventors. The primary limitation of the eth-
nic-name approach is that ﬁ  rst-
generation cannot be distinguished 
from later-generation immigrants.
But the approach yields quantiﬁ  -
able data in previously unavailable 
detail on the ethnic composition of 
U.S. inventors. Because the ethnic 
assignment is done at the micro-
level, greater detail on the ethnic 
composition of inventors is avail-
able annually on multiple dimen-
sions. Each patent contains very 
detailed technology categories, so 
that differences in ethnic contri-
butions across sectors can be ana-
lyzed (for example, semiconduc-
tors and biotechnology). 
Likewise, ethnic populations can 
be described annually for each 
city or state. Finally, most patents 
are assigned to a corporation, uni-
versity, or government body (for 
example, IBM, MIT, or the U.S. 
Army). The ethnic composition of 
each institution’s inventors, by city 
and line of business, can be simi-
larly described.
   U.S. Ethnic Inventors
Figure 1 illustrates the evolv-
ing ethnic composition of U.S. 
inventors from 1980 to 1997. This 
graph includes only inventors who 
resided within the United States at 
the time of their patent ﬁ  ling. The 
USPTO issues many more patents 
today than in previous years, and it 
is difﬁ  cult to interpret changes in 
the levels of patents granted. 
The trends are presented as annual 
shares of ethnic inventors to 
abstract from these issues. The 
English share, omitted from the 
graph, declines from 82 percent in 
1980 to 75 percent in 1997. The 
European ethnicity represents the 
largest foreign contributor to U.S. 
technology development. Like the 
English ethnicity, however, the 
European share of U.S. domestic 
inventors declines steadily over the 
period.
These declining English and Euro-
pean shares are partly due to the 
exceptional growth of the Chi-
nese and Indian ethnicities, which 
increase from 3 percent to 6 per-
cent and 2 percent to 4 percent, 
respectively, over the 17-year 
period. Recent data suggest that 
these upward trends have con-
tinued through at least 2002, and 
work on collecting data that con-
tinue through 2006 is ongoing. 
Growth in Chinese and Indian pat-
enting activity is particularly con-
centrated in high-technology sec-
tors, where Chinese inventors have 
supplanted European researchers 
as the largest ethnic contributor to 
U.S. technology formation beside 
the English.
FIGURE 1  ETHNIC SHARES OF U.S. DOMESTIC
  PATENTS
FIGURE 2  TOTAL ETHNIC SHARE BY MAJOR 
     TECHNOLOGIES
SOURCE: U.S. Patent and Trademark Ofﬁ  ce; and author’s calculations.
SOURCE: U.S. Patent and Trademark Ofﬁ  ce; and author’s calculations.
0
1
2
3
4
5
6
7
8
9
10
1980 1982 1984 1986 1988 1990 1992 1994 1996
Percentage of U.S. domestic patent applications
European
Chinese
Indian
Russian
Japanese
Korean
Vietnamese
14
16
18
20
22
24
26
28
30
1980 1982 1984 1986 1988 1990 1992 1994 1996
Percentage of U.S. domestic patent applications
Chemicals
Computers
Drugs
Electrical
Other
MechanicalFigure 2 explores the technology 
dimension of the contributions 
made by ethnic inventors. Patents 
are separated into six broad tech-
nology areas: chemicals, comput-
ers and communications, drugs and 
medical, electrical and electronic, 
mechanical, and miscellaneous 
(labeled “other” on the graph). The 
miscellaneous group includes pat-
ents for agriculture, textiles, furni-
ture, and the like. Growth in eth-
nic patenting is clearly stronger 
in high-technology sectors than in 
more traditional industries.
   International Technology 
Diffusion
Ethnic scientists and engineers are 
an important and growing con-
tributor to U.S. technology devel-
opment. Chinese and Indian eth-
nicities, in particular, are now an 
integral part of the country’s inven-
tion and commercialization activi-
ties in high-technology sectors. 
The dataset developed through pat-
ent records is useful for studying 
several important policy questions. 
Examples include the appropri-
ate immigration quotas for high-
skilled workers and the impact of 
foreign-born workers on native 
workers and students.
But the contributions of immi-
grants do not run in just one direc-
tion; there is a special relationship 
that exists between U.S. ethnic 
scientiﬁ  c communities and their 
home countries. Immigrants in the 
United States often retain a special 
interest in their native lands, which 
they still inﬂ  uence in ways ranging 
from ﬁ  nancial transfers to political 
inputs. 
Quantifying these ﬂ  ows is impor-
tant for evaluating whether the 
emigration of top talent to the 
United States is a gain or loss to 
the sending nation (sometimes 
referred to as the “brain drain” 
versus “brain circulation” debate). 
The extent to which technologies 
diffuse faster to countries through 
ethnic scientiﬁ  c channels is very 
important for achieving the posi-
tive gains from these expatriates.
Empirical work ﬁ  nds that U.S. eth-
nic scientiﬁ  c communities do aid 
the transfer of technologies devel-
oped in the United States to their 
native countries. This work moves 
beyond case studies by examin-
ing more than 40 countries and 20 
manufacturing industries over the 
1980–1997 period. This technol-
ogy transfer boosts the economic 
development of the home countries 
as measured by output and produc-
tivity growth. Moreover, countries 
are found to increase exports—to 
countries other than the United 
States—in the industries in which 
they receive technology stimulants, 
signifying the development of 
comparative trade advantages.
Current research is also evaluat-
ing the channels through which 
this technology transfer operates. 
Scientiﬁ  c collaboration certainly 
plays a role, with ethnic inven-
tors outside of the United States 
being found to cite ethnic inven-
tors within the United States at a 
higher rate, even after controlling 
for speciﬁ  c technological ﬁ  elds. 
This effect is most prominent 
immediately after new inventions 
are developed, with the special eth-
nic collaborations promoting both 
greater awareness of new technolo-
gies and greater tacit understand-
ing of how they work.
More recent projects with Fritz 
Foley of Harvard Business School 
are looking within the ﬁ  rm. We 
have gathered data on ﬁ  rm-level 
foreign direct investment (FDI) 
and trading patterns. On the FDI 
front, we have found evidence that 
a stronger U.S. ethnic research 
presence with multinationals facil-
itates greater FDI into the sci-
entists’ home countries. We are 
further exploring how the organi-
zational forms of FDI change—
for example, entry through fully 
owned facilities versus joint ven-
tures—and how within-ﬁ  rm trade 
is shaped.
Immigrants have a disproportion-
ate inﬂ  uence on U.S. technology 
formation and diffusion. Under-
standing these ethnic contributions 
and the scientiﬁ  c networks through 
which they operate is essential for 
crafting appropriate U.S. immi-
gration and innovation policies. 
With increasing globalization of 
research and development and 
innovative efforts, and the rapid 
development of China and India, 
these topics will continue to grow 
in importance.
   Recommended Reading
William R. Kerr. 2006. “Ethnic 
Scientiﬁ  c Communities and Inter-
national Technology Diffusion,” 
Harvard Business School Working 
Paper 06-022.
Williaim R. Kerr. 2006. “The Eth-
nic Composition of U.S. Inven-
tors,” unpublished manuscript.
A.L. Saxenian, Y. Motoyama, and 
X. Quan. 2002. Local and Global 
Networks of Immigrant Profes-
sionals in Silicon Valley. San Fran-
cisco, CA: Public Policy Institute 
of California.
A.L. Saxenian. 2006. The New 
Argonauts: Regional Advantage 
in a Global Economy. Cambridge, 
MA: Harvard University Press.
P. Stephan, and S. Levin. 2001. 
“Exceptional Contributions to U.S. 
Science by the Foreign-Born and 
Foreign-Educated,” Population 
Research and Policy Review, vol. 
20, no. 1, pp. 59–79.Wiillam R. Kerr was a participant at 
the Federal Reserve Bank of Cleve-
land’s Conference on Universities, 
Innovation and Economic Growth, 
held in November 2006.  Dr. Kerr is 
an assistant professor at the  Har-
vard Business School and a research 
associate at the Center for Economic 
Studies.
The views expressed here are those 
of the author and not necessarily 
those of the Federal Reserve Bank 
of Cleveland or the Board of Gover-
nors of the Federal Reserve System 
or its staff. 
Economic Commentary is published 
by the Research Department of the 
Federal Reserve Bank of Cleveland. 
To receive copies or be placed on 
the mailing list, e-mail your request 
to 4d.subscriptions@clev.frb.org or 
fax it to 216.579.3050. Economic 
Commentary is also available on the 
Cleveland Fed’s Web site at www.
clevelandfed.org/research.
PRSRT STD
U.S. Postage Paid
Cleveland, OH
Permit No. 385
Federal Reserve Bank of Cleveland
Research Department
P.O. Box 6387
Cleveland, OH 44101
Return Service Requested:
Please send corrected mailing label to the 
above address.
Material may be reprinted if the source is 
credited Please send copies of reprinted 
material to the editor.

U.S. ethnic scientists and entrepreneurs

http://www.clevelandfed.org/research/Commentary/2007/0401.pdf

U.S. ethnic scientists and entrepreneurs

Abstract

Similar works

Full text

Available Versions

Research Papers in Economics