New Study Examines How Stanford Alumni’s Entrepreneurship Rates Differ by Ethnicity and Nationality, Finding Substantial Gap between Asian Americans and Non-American Asians

The role of Stanford University as a leading hub for innovation and the wide impact of the university’s entrepreneurship education and opportunities on Silicon Valley and beyond are well recognized. Less explored, however, is the question of how the entrepreneurship rates of Stanford alumni differ by ethnicity and nationality. In particular, how do Asian Americans and non-American Asians alumni compare in their entrepreneurship activities, and how do their entrepreneurship rates change with participation in university entrepreneurship education programs?

Yong Suk Lee, deputy director of the Korea Program at Shorenstein APARC and the SK Center Fellow at the Freeman Spogli Institute for International Studies, and Charles (Chuck) Eesley, associate professor and W.M. Keck Foundation faculty scholar in the Department of Management Science and Engineering, had the perfect data set to answer these questions. They analyzed a representative sample constructed from the Stanford Innovation Survey, a novel survey administered in 2011 to over 140,000 Stanford alumni—all living Stanford graduates since the 1930s. The survey asks about respondents’ entrepreneurship status and whether they were active investors, and provides rich information on alumni’s ethnicity and nationality, as well as on parental entrepreneurship. 

Lee and Eesley describe the results of their analysis in a new study, “the persistence of entrepreneurship and innovative immigrants,” published in Research Policy. This is the first journal article to use the Stanford Innovation Survey. Lee sat down with Noa Ronkin, APARC’s associate director for communications and external relations, to discuss the study’s findings and policy implications.

How did you get involved with this research project and with using the Stanford Innovation Survey?

I had already been studying entrepreneurship when I happened to meet Chuck Eesley, whose research focuses on the role of the institutional and university environment in technology entrepreneurship. I learned that Chuck had conducted the Stanford Innovation Survey and that he had not yet had the opportunity to dig fully into the data.

One question I had in mind was: What does entrepreneurship look like among Stanford alumni when you compare Asian Americans to non-American Asians, who were enrolled at Stanford as foreign students? The Stanford Innovation Survey provides an appropriate empirical framework for examining this question. That is how our research paper originated, and it turned out to be the beginning of a productive collaborative relationship between Chuck and me. We are now working together on a number of other projects as part of the Stanford Cyber Initiative.   

What does the Stanford Innovation Survey allow you to research that other data sets do not?

One substantial challenge in studying entrepreneurship is that there is little available information about young startups and their founders. In many cases researchers therefore look at ex post entrepreneurs, who constitute a highly select population that limits what you can study; it doesn’t allow you to examine the question of who becomes an entrepreneur. While this question isn’t new to the literature, the Stanford Innovation Survey allows us to offer empirical advances in addressing it.

First, our data set comprises a representative sample of alumni regardless of whether or not one became an entrepreneur. Second, the survey’s detailed data on alumni enables us to distinguish those from entrepreneurial families as well as examine immigrants and first-generation Americans of similar ethnicity. Third, the survey allows us to examine the relatively little-explored question of how the rate of entrepreneurship changes with participation in university entrepreneurship education programs.

Thanks to the survey’s detailed demographic data, we can compare the differences in entrepreneurship both across and within ethnicity and nationality. For example, we look at how intergenerational correlation of entrepreneurship—that is, the relationship between one’s choice to become an entrepreneur and his/her parental entrepreneurship experience—differs by nationality. This question speaks to how flexible a society is to increasing entrepreneurship and how rigid the job structures are in different societies.

What are your main findings?

First, we find that, among Stanford alumni, Asian Americans are quite entrepreneurial, even more so than white Americans (with 3.3% higher startup rate), but that Asians of foreign nationality are substantially less so (they have about 12% lower entrepreneurship rate than Asian Americans). Such discrepancy also holds for investing as an angel investor or venture capitalist, or utilizing Stanford networks to find funding sources or partners. So despite the similar cultural traits that Asian subgroups may share, the societal institutions one faces and one’s upbringing create a major gap in entrepreneurship rate.

In addition, we see that non-American Asians have lower participation rates in Stanford’s entrepreneurship education programs compared to their Asian American counterparts, and that participation in these programs does little to reduce the gap in entrepreneurship rate between Asian Americans and non-American Asians. We cannot draw from this any conclusion about the value of the university’s entrepreneurship education programs. All we can say is that mere exposure to them as a student doesn’t diminish the gap in entrepreneurship between Asian Americans and non-American Asians.

Finally, we find that parental entrepreneurship status is a strong predictor of one’s decision to become an entrepreneur; that parental entrepreneurship is lowest among Asians, especially non-American Asians; and that the degree of intergenerational persistence in entrepreneurship is substantially higher among non-American Asians compared with Asian Americans. The correlation between one’s entrepreneurship status and one’s parents’ entrepreneurship experience is particularly high for East Asians (e.g., Koreans and Chinese) compared to U.S. citizens, for whom it doesn’t differ by ethnicity.

Do your findings apply in any way to populations beyond Stanford alumni?

Clearly the sample of Stanford alumni isn’t representative of the general population, but results based on it may generalize to other samples of selective-admission college-educated alumni. Moreover, Stanford does play a significant role in entrepreneurship and innovation in Silicon Valley and beyond, and understanding entrepreneurship activity among students from a research university such as ours is critical to understanding high-growth entrepreneurship and how social environments influence entrepreneurs.

What are the policy implications of your study?

First, this study speaks to the need to develop a more nuanced discourse of immigration policy. Current discussions of immigration policy are often consumed by debates about low-skilled immigrants. Our findings suggest that high-skill immigration policy should be examined and evaluated separately from low-skill immigration policy. They also suggest that we should not just narrowly look at entrepreneurship and job creation by immigrant entrepreneurs, but also consider long-run effects. We see that young Asian immigrants who grow up in the United States are significantly more entrepreneurial than Asian foreign students, despite similar educational credentials. Allowing immigrants to settle in and attain the cultural and institutional features of the American education system at a young age could therefore positively influence entrepreneurship and innovation, at least among high-skilled populations.

Second, there may be lessons here for Asian countries that are pursuing various policies to promote entrepreneurship and innovation. The low levels of parental entrepreneurship and the high intergenerational persistence in entrepreneurship that we see among non-American Asians in our sample bring to relief the underlying socio-economic constraints on entrepreneurship in Asian countries. Sending their young people for education abroad with the goal of bringing them back home isn’t enough to break out from these constraints. A different approach is to develop policies that promote transnational bridging, encouraging high-skilled Asian Americans and emigrants that choose to remain here after education to engage with their home countries.

Under the guidance of the Aspen Institute Congressional Program, thirteen members of Congress convened at Stanford University from March 2-5 to discuss policy options regarding the current North Korea crisis. The representatives deliberated with scholars and practitioners to acquire a better understanding of North Korea and its ruling regime, review the regional actors and their interests, assess the range of potential solutions to the crisis, and determine the role of Congress on this issue.

A report summarizing the program’s dialogue is now available for download. In addition to providing non-attributed comments from the proceedings, the document also includes the itinerary for the three days, the names of participants, as well as a collection of relevant publications.

The Aspen Institute Congressional Program was established in 1983 by former U.S. Senator Dick Clark. The program is for members of the United States Congress, and is both nongovernmental and nonpartisan in design. The program gives senators and representatives the opportunity to delve into complex and critical public policy issues with internationally recognized experts. Lawmakers are given the opportunity to explore policy alternatives in off-the-record settings, while simultaneously building relationships crucial to finding solutions.

"Although peace was the prevailing theme of the opening night at the Pyeongchang Winter Olympics, the air in the VIP box was charged with awkwardness and intimidation," said researchers at the Shorenstein Asia-Pacific Research Center in a recently published article. "The real test for Moon's leadership begins now."

The full article in East Asia Forum is available here.

When U.S. Vice President Michael Pence recently met with Japanese Prime Minister Shinzo Abe in Tokyo ahead of the Pyeongchang Winter Olympics, he declared that “The United States-Japan alliance is the cornerstone of peace, prosperity, and freedom in the Indo-Pacific.” Examining U.S.-Japan security relations is a priority of Stanford’s U.S.-Asia Security Initiative (USASI) at the Shorenstein Asia-Pacific Research Center. Just days prior to the Vice President’s remarks, USASI and the Sasakawa Peace Foundation (SPF) co-hosted the 2018 the U.S.-Japan Security and Defense Dialogue Series, where a key theme was coordination and cooperation in the long-standing U.S.-Japan security relationship.

Held in Tokyo from January 31 through February 2, this workshop convened senior Japanese and American policymakers, military leaders, scholars, and regional experts to discuss Japan's security strategy and the alliance between Japan and the United States. It is part of a dialogue series that deepens a discourse on contemporary Asia-Pacific security issues, while building bridges between American and Asian academics, government and military officials, and other defense and security policy specialists. Over the course of three days, core participants held frank discussions with scholars, government officials, and military leaders from both countries about the status of the U.S.-Japan security alliance given the present array of challenges in the region; met in private with key members of the Japanese government and the United States Embassy; and also engaged in candid conversations with military leaders that analyzed Japanese and American combined military planning and operations.

“This year’s workshop was the second meeting of the US-Japan Security and Defense Dialogue Series,” said USASI Director, Ambassador Karl Eikenberry. “It continues to be an excellent venue for the exchange of views between government and military officials, academics, and those with policy experience on U.S.-Japan security relations.”

Workshop Co-Host, Lieutenant General Noboru Yamaguchi, Japanese Ground Self Defense Force (Retired) and Special Advisor to the Sasakawa Peace Foundation, commented: "The issues we discussed were timely and important as the security environment surrounding the alliance is serious and cooperation among Japan, the United States, the Republic of Korea, and other partners, while improving, has a long way to go."

Solidifying the U.S. Alliance with Japan

(From left to right: General Vincent Brooks, Commander, UNC/CFC/USFK; Ambassador David Shear; Ambassador Michael Armacost; and Workshop Co-Hosts Ambassador Karl Eikenberry and Lieutenant General, (Retired) Noboru Yamaguchi)

(From left to right: General Vincent Brooks, Commander, UNC/CFC/USFK; Ambassador David Shear; Ambassador Michael Armacost; and Workshop Co-Hosts Ambassador Karl Eikenberry and Lieutenant General, (Retired) Noboru Yamaguchi)

Day One of the dialogue saw participants engage in a series of frank discussions on many of the challenges facing the U.S.-Japan security alliance, including American and Japanese assessments of security trends in East Asia; training, operations, and strategic planning between the U.S. and Japan armed forces; and security cooperation and instability on the Korean Peninsula.

“The Workshop is an unique opportunity for participants to share their views on political, economic, and security developments in the Indo-Pacific area,” reflected Ambassador Eikenberry. “It provides a way for the United States and Japan to explore ways to achieve the shared goal of maintaining peace and prosperity in the region.”

Visits with U.S. Mission and Japan Foreign Minister

Highlights for Day Two included a meeting between core dialogue participants and key officials at the U.S. Embassy in Japan, including Ambassador William Hagerty. The day ended with a consultation with Japan Foreign Minister Taro Kono. APARC faculty and affiliates at that meeting included Ambassador Eikenberry, Ambassador Michael Armacost, USASI Associate Director Dr. Belinda Yeomans, and visiting scholar Dan Sneider.

“The diversity of the participants made the dialogue especially interesting,” said Ambassador Armacost. “The presentations and comments were both thoughtful and practical.” The frank and open dialogue about the operation of the U.S.-Japan security alliance, noted Sneider, covered topics ranging “from the broad strategic level to the nitty gritty issues of alliance coordination and cooperation. Both Japanese and American participants have found this to be refreshing and revealing.”

Fleet Activities Yokosuka

(Meeting with Commander of the Japanese Self-Defense Fleet, Vice Admiral Kazuki Yamashita)

(Meeting with Commander of the Japanese Self-Defense Fleet, Vice Admiral Kazuki Yamashita)

The 2018 U.S.-Japan Security and Defense Dialogue Series closed with a group of the U.S. and Japanese participants visiting United States Fleet Activities Yokosuka. There, they met with the Commander of the U.S. 7th Fleet, Vice Admiral Phil Sawyer, and had a working lunch aboard USS Chancellorsville. They subsequently toured the Memorial Ship Mikasa (famous for serving as Admiral Togo’s flagship during the Russo-Japanese War) and met with the Commander of the Self-Defense Fleet, Vice Admiral Suzuki Yamashita at his headquarters. The conversations throughout the day focused on the importance of the alliance and the challenges of conducting combined U.S.-Japanese naval and joint operations.

Chatham House Rule applied to the dialogue, but a workshop report with no direct attribution or remarks will soon be made available to the public.

June 2018 Update: the 2018 workshop report is now published. Read it now.

A Japanese version of the workshop report is also available.

The report from the inaugural U.S.-Japan Security workshop of May 2016 is also available. 

The U.S.-Asia Security Initiative is part of Stanford University’s Walter H. Shorenstein Asia-Pacific Research Center (APARC). Led by former U.S. Ambassador and Lieutenant General (Retired) Karl Eikenberry, USASI seeks to further research, education, and policy relevant dialogues at Stanford University on contemporary Asia-Pacific security issues.

Former U.S. ambassador to South Korea Kathleen Stephens spoke on the "PBS News Hour" about the first high-level talks between North Korea and South Korea in more than two years. The two nations agreed to hold future military talks aimed at easing border tensions and the North pledged to send a delegation to the Olympic Games next month.

Stephens called it a good first step and an “all-too-rare positive development” on the peninsula. The decrease in potential for disruptions to next month’s games could—according to Stephens-be seen as the first deliverable by South Korea’s new president, Moon Jae-In, on a promise to reengage with the North.

Ambassador Stephens said it was not surprising that denuclearization did not come up during Tuesday’s talks, noting North Korea’s position that the issue is one to be dealt with the United States. Ambassador Stephens speculated that once the Olympics closed, the peninsula might experience a period of reduced tensions along with confidence building. However, she believes that come the spring there would still remain important questions about military exercises as well as nuclear weapons.

Asked about news reports of discussions within the Trump administration on the possibility of targeted strikes against North Korean military sites, Ambassador Stephens described it as a very risky strategy, adding that the discussions alone could prove unnerving in South Korea as well as North Korea.

The full interview is available on PBS.

In advance of talks between North Korea and South Korea, APARC’s Daniel Sneider says the most immediate threat on the peninsula actually comes from the latter.

In a piece for The Hill, Sneider writes that by embracing North Korea’s offer for dialogue, South Korean President Moon Jae-in—who seeks a peaceful Olympic Games, good relations with China, and reduced tensions with the North—risks diminishing America’s presence in the region.

The challenge for the U.S. administration, accordng to Sneider, is to afford South Korea freedom to explore opportunities for dialogue, while ensuring that such freedom does not result in driving the United States off the peninsula.