This is the first in a 2-part guest commentary series on immigration and its importance to the U.S. economy.

A healthy economy requires a skilled workforce and vibrant growing businesses. An immigration policy that attracts skilled workers and entrepreneurs can stimulate state economic growth as well as enrich the cultural fabric of our region. Doing so represents an opportunity for Connecticut, one of only eight states experiencing a population decline. Many of the wealthiest residents and educated young are defecting to other states with a temperate climate and greater opportunities.

The state economy is static for a variety of reported reasons including downsizing, a difficult business environment and outplacement. According to a 2016 survey, a lack of skilled workers is a major challenge for Connecticut businesses. It is estimated that, as a result of looming retirement and migration to other states, Connecticut businesses will have to replace upwards of 16 percent of their current workers over the next five years. A state policy that encourages and facilities the migration of young skilled workers and entrepreneurs could help to grow our population and in doing so improve the economy.

Before considering immigration initiatives, it is worth reflecting on the history of U.S. immigration and the positive impact that immigrant entrepreneurs can have on the economy.

Waves of immigration

The U.S. population is one born of waves of immigration. The tidal flow began in the 17th century when immigrants from England and Northern Europe came in search of religious freedom and economic opportunity. The American Revolution and wars in Europe stemmed the flow until the early 19th century. A second wave began in the 1820s. Immigrants at this time were largely Germans seeking farming opportunities in the Midwest and later, Irish famine victims who settled on the East Coast.

The lure of the California Gold Rush and opportunities in railroad construction added to this trend. These opportunities attracted many Chinese immigrants until job competition and concerns about racial differences resulted in the Chinese Exclusion Act of 1882. The combination of restrictive legislation and economic depression resulted in a period of decline in immigration.

The third wave of immigration began in the late 19th century. American states seeking to increase their populations and railroad companies in need of laborers sought to attract immigrants. At this time it had become easier and cheaper for Europeans to travel to the U.S. More than 23 million people, mainly Europeans, immigrated during the period known as “The Great Wave.”

In the early 20th century, labor competition again became a concern and Congress responded with the enactment of a “national origins” quota system. The system limited immigration by assigning each nationality a quota based on its representation in past census figures. The effect of national quotas coupled with the Great Depression severely curtailed immigration until a major policy change occurred in 1965.

At that time, national quotas were replaced with a preference system designed to unite immigrant families and attract skilled workers. The enactment of the preference system resulted in the fourth major wave of immigration that continues today. It has been the largest immigration wave in U.S. history.

Entrepreneurs

According to a recent national study: “Immigrants play a disproportionate role in American entrepreneurship” representing around a quarter of all entrepreneurs. This is comparable to figures for innovation and patent filings, where immigrants also represent about a quarter of all U.S. inventors. The immigrant share of entrepreneurship has been increasing dramatically since the mid-1990s. It is estimated that between 35 percent and 40 percent of new firms have at least one immigrant entrepreneur connected to the firm’s creation.

According to the study, immigrants coming as children are more likely to start larger firms than immigrants arriving as adults. Moreover, firms created by immigrants who have grown up in the U.S. are generally associated with better outcomes, in terms of lower closure rates and higher representation among larger firms.

At the state level, Connecticut is home to many successful companies with at least one founder who was an immigrant or child of an immigrant, including United Technologies Corporation, Pitney Bowes, General Electric, and Terex. Those four companies together employ more than 550,600 people and bring in more than $217 billion in revenue each year.

Immigrants from all over the world continue to make significant contributions to the Connecticut economy. Today, 13.9 percent or 499,643 of Connecticut’s 3.6 million residents are foreign born; 18.5 precent of state businesses are owned by immigrants, with a total net business income of $2 billion. That is 15 percent of all net business income in the state.

The 2-part series concludes Tuesday with recommendations on what Connecticut and the nation can do to help immigrants drive economic growth.

Denise Collins is a business lawyer based in Stonington. She practiced and trained with leading corporate law firms in Europe for 10 years. Tony Sheridan is president and CEO of the Chamber of Commerce of Eastern Connecticut and former first selectman of Waterford. He emigrated from Ireland at age 19.