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Philadelphia Offers Immigrant Entrepreneurs This 1 Major Advantage over New York and San Francisco

The pita is fragrant, tender, and warm enough to soften the wedge of Cabot butter it enfolds. Restaurateur Michael Solomonov eats sitting at the bar of Abe Fisher, his shrine to foods of the Jewish diaspora, on a narrow, crowded street in Center City, Philadelphia. He has fetched the bread from Dizengoff, his specialty hummus restaurant next door, which also supplies Goldie, his falafel spot one block over. Goldie perches above The Rooster, a hipster deli that donates 100 percent of its profits to Broad Street Ministry, a local philanthropic organization.

The Rooster specializes in matzo ball soup. Solomonov and Steve Cook, his partner in all these enterprises, launched it as a disposal vehicle for chicken backs that are a byproduct of Federal Donuts. That's their coffee/doughnut/Korean-fried-chicken joint, with five locations around the city. Across town, Zahav, the James Beard-anointed interpreter of modern Israeli cuisine that started it all in 2008, remains one of the city's toughest reservations.

"I think there is something really beautiful about having this be here and not in New York," says Solomonov, born 40 years ago in Israel, whose cuisine he perfects and personalizes with the gusto of Glenn Gould interpreting Bach. He's been in the U.S. since he was 16, and in Philadelphia since 2001. "It is so much easier to live here. Philadelphia gave us a chance to f*ck up without going under."

While places like New York and San Francisco price out some immigrant entrepreneurs, less-expensive Philadelphia is working hard to lure them. Many, of course, are street vendors and other small-scale merchants who benefit from policies like the city's free commercial activity license. Others are social entrepreneurs inspired by their own experiences, such as Yasmine Mustafa, whose startup Roar for Good strives to protect hotel housekeepers, a largely immigrant workforce. Still others are growth companies spawned from local schools like the University of Pennsylvania, whose student body has among the highest share of international students in the country.

All told, the city boasts close to 50,000 immigrant entrepreneurs employing almost 150,000 people. (That is roughly the same, as a percentage of the immigrant population, as New York, and slightly less than San Francisco.) "The city's efforts to support immigrant entrepreneurs help make that number a reality," says Hanna Siegel, managing director of New American Economy, a coalition of business leaders and mayors focused on immigration reform.

Among those efforts is Philadelphia's annual Immigrant Business Week, when the city hosts workshops for foreign-born founders. Last year, for example, representatives from Google taught a class on using apps to raise your business profile that was translated into Chinese. Each summer the city identifies one commercial corridor and issues "passports" that shoppers get stamped at immigrant businesses in exchange for discounts or other rewards.

"It's vital that government dedicate its time and resources to areas where we can have the biggest impact, and the research shows that this should be a priority for us," says Mayor Jim Kenney, who since his election in 2015 has made pro-immigrant programs a pillar of his administration. "Immigrant entrepreneurs have driven the vast majority of our small business growth--adding resources, jobs, and vibrancy to our neighborhood commercial corridors."

A neighborhood magnet

Germantown is named for the Quaker and Mennonite families that emigrated to Northwest Philadelphia in the 17th century. So Germantown Avenue, in Mount Airy, is a fitting site for the Philadelphia Immigrant Innovation Hub (PhillyIHub), a co-working space and education source targeting immigrant entrepreneurs.

Mount Airy has missed out on the city's population growth, driven, in large part, by immigration. "We wanted to incentivize immigrant entrepreneurs to take a look at Northwest Philadelphia as a great place to settle," says Brad Copeland, executive director of Mount Airy USA, a community service organization that operates PhillyIHub.

The innovation hub opened in an old post office building in 2015. Since then more than 175 immigrants from dozens of countries have completed its free, six-week entrepreneurship program. Graduates have launched in-home healthcare services, apps, food businesses, and photography studios.

"We have seen a fair number of folks trying to connect goods and services that exist here with their home countries," says Copeland. One participant, for example, launched a solar power business based in Philadelphia and in Liberia, serving the market in Liberia.

Cobbina Frempong, who grew up in Ghana, heard about PhillyIHub from other small business owners at one of Mount Airy's community events. Part of the innovation hub's most recent cohort, he is applying its lessons to his video production company, Green District Media. For example, after learning about conducting small experiments he surveyed clients about a new service to distribute and track video content; he's now testing the service.

"When I tried this business the first time I wasn't very successful," says Frempong. "I needed someone to hold my hand through the process, which is where PhillyIHub stepped in and helped me."

PhillyIHub teaches aspiring entrepreneurs about product-market fit and value propositions. For the prosaic stuff of permits and licenses, they rely on Philadelphia's Department of Commerce, which--along with other city agencies--is beefing up its language capabilities. The department's business service managers, who work directly with small business owners, speak Spanish, Mandarin, Arabic, and French among them. The department relies on telephonic translation services or bilingual speakers in other departments to fill in the gaps.

Commerce employees also deploy into neighborhoods, dropping by businesses and offering help. "When folks are new to the country they have a natural distrust of these really large systems," says Lauren Cox, communications director for the department. By hosting community workshops and explaining programs--for example, a 50 percent reimbursement for storefront improvements that is popular along many immigrant-dense commercial corridors--"our staff builds trust on a very basic human level," she adds.

The science sector

Entrepreneurs like Solomonov base businesses on their home country's strengths: in his case, food. Entrepreneurs like Mihir Shah base businesses on their home country's deficiencies. Shah's company, UE LifeSciences, makes a handheld breast exam device for women in countries like India, where he grew up. "Immigrants bring with them knowledge of the gaps between where they are from--whether it is Malaysia or Mumbai--and life over here," says Shah. "Innovation is a way of bridging those disparities."

When Shah asked to attend college in the United States, his parents practically mandated Philadelphia because his aunt lived nearby. After graduating from Drexel University with a degree in computer engineering, Shah worked on several projects--including a GPS tracking system for commercial vehicles--that didn't scale.

During that period Shah developed a relationship with Drexel's tech commercialization office, volunteering to get a heart-related medical device tested by Mumbai cardiologists during a trip home. In 2010 he and a co-founder licensed from that office sensor technology developed by a Drexel professor of biomedical engineering and a breast surgeon now at Penn Medicine. The resulting product, iBreastExam, has been used on more than 200,000 women globally. By year's end the device will have conducted tests on a million women at a small fraction of the cost of a mammogram.

Most of UE LifeSciences' 70-plus employees are in India, its principal market to date. But the business, which has raised more than $4 million in venture capital, operates out of University City Science Center, an innovation and entrepreneurship hub on 24 acres in West Philadelphia. Sixteen of the 33 companies at the center have one or more immigrant founders. It is putting in place a Global Entrepreneur in Residence program to help foreign-born founders obtain H-1B visas while they grow their businesses here.

The Science Center not only deepens Philadelphia's pool of immigrant entrepreneurs, it also leverages the city's immigrant business community to help startups expand globally. The Global Startup Accelerator, launched late last year in conjunction with the Welcoming Center for New Pennsylvanians, a nonprofit that supports immigrant integration, is a six-week program "to help any startup expand into international markets by tapping into successful immigrant entrepreneurs, who are in abundance here," says Karina Sotnik, director of business incubation and accelerator programs at the Science Center and herself a serial entrepreneur born in Latvia.

The Global Startup Accelerator will match startups looking to expand in specific regions with local entrepreneurs from those regions "who may have gone through exits and become investors and have close ties to their countries of origin," says Sotnik. The first cohort will be matched with founders from Europe.

Not every startup at the Science Center hails from a local university, but the increasingly international nature of U.S. college enrollment naturally swells the ranks of immigrant founders. When he's not working on UE LifeSciences, Shah teaches a class at Drexel in biomedical engineering entrepreneurship. It is the same class he took 19 years ago when he was among the few foreign-born students. Today "the class is always full and about 50 percent of my students are immigrants," he says. "You draw a lot of strength from that diversity."

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Kristen Fitch

Senior Director, Marketing