Needed: More immigrants
St. Louis Business Journal
June 15, 2012
By Amir Kurtovic
St. Louis needs more Beriz Nukics. Many more, according to a new study looking at the impact of immigration, or the lack of it, in St. Louis.
In 2002, Nukic opened a small coffee roasting company in the Bevo Mill area to sell traditional Turkish coffee to the Bosnian immigrant population. Nukic, himself a refugee from Bosnia who lost most of his family in the war there, also sold popular Bosnian foods such as Burek, Sirnica and Doner Kebab from the store, which barely had enough room for three tables and six chairs.
Today, Nukic's coffee is sold in 38 states, and he has two restaurants, one in a building he bought at 5053 Gravois Road and one in a 6,000-square-foot strip mall he built in south St. Louis County, at the intersection of Reavis Barracks and Lemay Ferry roads. In 2010, he launched a frozen foods business, selling traditional Bosnian dishes in grocery chains such as Schnucks, Dierbergs and in stores in 29 other states. He employs about a dozen people and plans to keep expanding his distribution of coffee and frozen foods around the country.
But Nukic's story, is not as common here as some would like it to be.
Nationally, immigrants make up about 13 percent of the population but were responsible for 28 percent of all businesses started in 2011, according to the 2011 Kauffman Index of Entrepreneurial Activity, published by the Kauffman Foundation of Entrepreneurship.
St. Louis lags far behind the national numbers. Once a melting pot of immigrants, about 20 percent of St. Louisans were foreign-born at the turn of the last century. That number now sits at about 4.5 percent.
"Refugees and immigrants start a disproportionately high number of businesses in this country, and we could be doing a heck of a lot better if we had even more immigrants," said Anna Crosslin, president and CEO of the International Institute, a nonprofit that helps refugees resettle here.
The St. Louis County Economic Council, the St. Louis Development Corp., the World Trade Center St. Louis and the International Institute of St. Louis have put together a study to measure the economic impact of foreign-born people in St. Louis and to determine what the region can do to improve its standing. The study, which cost $25,000 and was paid for by the William T. Kemper Foundation, will be published June 19, but it clearly shows that the lack of immigration impacts the region's economic and income growth, said Tim Nowak, executive director of the World Trade Center, St. Louis.
Other Top 20 metropolitan areas have four to fives times the number of foreign-born residents and have averaged 40 percent faster economic growth over the past decade, according to the executive summary of the study provided to the St. Louis Business Journal. If St. Louis would have kept pace with those cities in attracting immigrants, income growth would have been 4 percent to 7 percent higher and housing prices would be 26 percent higher in the city of St. Louis and 20 percent higher in St. Louis County over the last decade, according to the study, which was authored by Saint Louis University economics professor Jack Strauss.
And it's not just ethnic restaurants and small businesses that Nowak has in mind. Immigrants started 25 percent of U.S. public companies that received venture capital since 1991, according to a 2006 study published by the National Venture Capital Association. The names of some of those companies may ring a bell: Intel, Google, Yahoo! and eBay all fall into that category.
One of St. Louis' biggest success stories on the immigrant front is Rose International, an IT consulting company started in 1993 by a husband and wife duo of Indian immigrants. Sue Bhatia, the CEO of Rose International, came to the U.S. in 1987 and enrolled in a master's program at the University of Missouri, St. Louis. After working locally in the IT industry, including for McDonnell Douglas, Bhatia and her husband, Gulab, decided to put their skills to work on their own terms.
Almost two decades later, their company has about 6,000 employees and reported 2011 revenue of $360 million. Rose International has 20 offices across the country and a software development facility in New Delhi, India.
"The only reason immigrants choose to stay in the popular immigrant cities such as San Francisco and New York is due to their own community ties and support," Bhatia said. "In 1987, there was only one Indian grocery store and very few Indian families (in St. Louis). For most people, that can be lonely, unless you are open to embrace the local community."
While the International Institute and area Catholic organizations have helped to resettle refugees here, Crosslin said the region has not done a good job of attracting foreign-born people who enter the country through the regular immigration process.
A 2006 review of Census numbers by the Brookings Institution found that St. Louis ranked 21st in number of refugees but a dismal 60th in the amount of foreign-born residents. In comparison, Chicago ranked third in both categories.
The difference of the economic impact between refugees and immigrants often boils down to education. While refugees came to the U.S. because of wars, persecution and economic and political instability, immigrants often come because they have marketable skills in high-demand industries or because they seek more opportunities for their children.
Attracting more foreign-born people is especially important for the city of St. Louis, which has seen population declines for decades, Crosslin said. City population decreased from about 395,000 to less than 320,000 between 1990 and 2010, according to the U.S. Census Bureau. Refugees were the city's single largest inflow of population during that period, when close to 7,000 refugees from Bosnia and Herzegovina settled mostly in the South City area, Crosslin said.
Those 7,000 led to secondary migration as refugees started bringing over family members and attracting other Bosnians from across the U.S. The Bosnian population in St. Louis now is estimated to be between 60,000 to 70,000, Crosslin said.
The early Bosnian refugees formed a nucleus in south St. Louis City, opening restaurants, bars, bakeries, butcher shops and ethnic grocery stores and revitalizing the area.
The Bosnian community mirrored the Vietnamese refugees, who began arriving in St. Louis in the early 1980s and were the early catalyst that led to the revitalization of South Grand Boulevard, Crosslin said. The International Institute has sponsored about 4,000 Vietnamese refugees since 1979. But both of those groups of immigrants resettled after brutal wars in their countries.
Economic development officials expect the new study to demonstrate why the region could use more immigration, maybe not prompted by an international conflict.
"It is our hope that when we roll this out that the leaders in the region put together a task force to look at what we can be doing not only to attract immigrants but also to retain them," Nowak said.
Engineer from India
George John, an Indian immigrant who came to St. Louis in 1971 at age 10, said his parents insisted that all of their children get a good education.
"My parents said we could be anything we wanted, as long as it was either a doctor, an engineer or an accountant," John said.
John became an engineer, and at age 33 started EDSI Engineers and Surveyors, a company he has since grown to 32 employees that have handled major projects for the city of St. Louis, Chesterfield, the Metropolitan Sewer District and the Missouri Department of Transportation , among other clients.
John, who is also the new president of the 120-member St. Louis chapter of the Entrepreneurs' Organization, said the region needs to attract more immigrants who want to start business here. "A lot of the people who come here now, especially the IT folks from India, they're not entrepreneurs," John said. "They're working fulltime on temporary visas and they eventually go back or move to other cities."
Sierra Leon supplier
Sawa Harjo, a 36-year-old refugee from the war-ravaged African nation of Sierra Leon, sells beauty supplies five days a week at area flea markets.
Harjo, who came to St. Louis in 1999, also works full time for the Missouri Department of Mental Health as a developmental assistant, helping people suffering from mental disorders.
She decided to open her business in 2009 because, she said, it was in her blood.
"My mother and father were all business people, so it's a family thing. When I first came here, it was confusing and I didn't know what I had to do to start a business, but I got more comfortable later," Harjo said.
Her story is familiar to many who deal with refugees and immigrants in St. Louis. After getting settled in, learning the language and the culture, many of them start businesses.
Lebanon to lunches
Fouad Wehbe came to St. Louis from Lebanon in 1983 to study engineering at Washington University. But when he got his degree in 1988, he was faced with a sluggish economy and tough job market. Instead of waiting for a good job offer, he went into business for himself, opening a small grocery store in north St. Louis City.
In 1995 he opened Wehbe's Cafe downtown, a small sandwich and coffee shop that counted among its customers both Francis Slay Sr. and his son and St. Louis Mayor Francis Slay, who also have Lebanese roots.
Wehbe's Cafe closed in 2007, after a failed expansion to Chesterfield left the small business saddled with debt, Wehbe said. But he is now back downtown in the same location with Tortilla Grille, which opened in July 2011 and features a fusion menu of wraps and foods popular around the world. The restaurant employs four people and serves about 130 customers daily.