By Falguni Bhuta

The number of startups founded by immigrants to the United States has shot up sharply over the past 10 years, according to a study released Thursday by DukeUniversity.

The new study, started by a team of researchers at Duke’s Pratt School of Engineering, says the percentage of startups founded by immigrants in Silicon Valley has grown to 50 percent in 2005.That’s a sharp rise from 1999, when a professor at the University of California at Berkeley found that immigrants led 24 percent of all technology businesses started in Silicon Valley between 1980 and 1988.

About one in four technology startups in the U.S. have at least one key founder that was foreign born. On a nationwide basis, about 26 percent of startups were founded by immigrants in 2005, the study says. Foreign-born skilled workers are making large contributions to the technology and engineering industries in the United States. Immigrant-founded companies produced $52 billion in sales and employed 450,000 workers in 2005, the study said. About 80 percent of the immigrant-founded companies were in just two industry fields of software and innovation and manufacturing-related services.

One of the main researchers behind the study, Vivek Wadhwa, said the study was fueled by the current debate in the country surrounding immigration and outsourcing.

“The debate is about illegal workers who jump over the borders,” said Mr. Wadhwa, executive in residence at Duke’s Pratt School of Engineering. “The bigger issue is the skilled immigrants who build value, skilled jobs, and provide [intellectual property] that will fuel growth in the United States in the next decade.”

Currently, the Congress has a cap on the number of temporary work permits for skilled workers and green card issues for immigrants and that needs to change, he said.

“We need to have more [skilled] immigrants,” he said. “We want these people to come and build businesses, to think like Americans and build like Americans; we need high fences but big gates.”

India-born Mr. Wadhwa himself has been a technological entrepreneur founding two companies in the Research Triangle area in North Carolina and immigrated to the United States in 1980.

Indians lead the pack Another interesting finding of the study was that Indians founded more engineering and technology companies in the U.S. in the past decade than immigrants from the U.K., China, Taiwan, and Japan combined, creating 26 percent of all the immigrant-founded companies.

Manish Chandra is one such Indian-born immigrant who is the founder of a Silicon Valley startup called Kaboodle. The 39-year-old entrepreneur came to the United States from India in 1987 and worked with several technology companies in Silicon Valley before founding his Santa Clara, California-based social shopping web site in March 2005.

“We as Indians, because of our culture, are entrepreneurial in nature,” Mr. Chandra said. “The systems and processes in our mother country are not so well-defined so we have to take the steps in carving out our own destiny.”

Some other factors in the success of Indians as entrepreneurs are social and technological ecosystems such as TiE that nurture other business-minded people. TiE is an organization for Indian entrepreneurs that provides resources and networking to its members and has chapters worldwide. The TiE Silicon Valley chapter, however, is one of the biggest in terms of members and activity.

Since its conception, TiE has helped a few hundred startups get off the ground with funding or guidance, Mr. Chandra said. His own startup acquired seed funding and guidance through networking at TiE, he said. The contribution of the Indian Institutes of Technology by providing its bright graduates was another factor in the growth of Indians as entrepreneurs in the United States, he said.

California at the Top

Some other observations from the study said that California was the state with the highest number of immigrant-founded companies (39 percent), followed by New Jersey (38 percent), and Georgia (30 percent).

Immigrants were not far behind in filing patent applications. Foreign nationals residing in the U.S. were inventors or co-inventors in more than 24 percent of international patent applications filed from the U.S. in 2006, according to the World Intellectual Property Organization patent databases. The largest group of immigrant non-citizen inventors were Chinese (Mainland and Taiwan-born), followed by Indians, Canadians, and the British.

The DukeUniversity researchers sourced the information from a list of engineering and technology companies founded in the U.S. in the last decade from Dun & Bradstreet’s database. There were 28,766 companies in that list with more than $1 million in revenues and 20 or more employees, and company branches with 50 or more employees.