Innovation is a key driver of economic growth and a necessary component for building a brighter future. Lately, innovative work around the world has been focused on developing Artificial Intelligence (AI), which many researchers and economists have argued could lead to an explosion of economic growth in the coming decades.1 Models that predict this exponential growth suggest that advanced AI could automate research, fueling accelerating gains in productivity and creating transformative growth.
What does AI and the potential of exponential economic growth have to do with international students? Studies show that 42% of the top US-based AI companies had a founder who came to the US as an international student.2 This is just the latest in a long list of sectors where innovation and entrepreneurship are driven by international students.
Today, we’re diving into the latest data showcasing how international students create jobs and pioneer cutting-edge innovation. Read on to discover how international students drive the global economy from their destination of choice.
Key Insights at a Glance
- International students support over 360,000 jobs in Canada and the US, and over 250,000 in Australia.
- In the US, 71% of full-time, university graduate students studying computer and information sciences—the most common field for AI researchers—are international students.
- Among first generation newcomers to Canada, 13.3% of those who held at least a bachelor’s degree owned an incorporated business with employees. For comparison, 11.5% of Canadians third generation or more owned a similar business.
- About 39% of the 100 fastest growing companies in the UK have a foreign-born founder or co-founder.
International Students Help Economies Avoid Recession
International students play a critical role in driving economic growth, from their contributions as temporary residents to their impacts as job creators post-graduation. While balancing better controls of student flows with positive student outcomes is important, significant limits on student mobility can negatively impact destination economies.
For example, in response to the proposed student cap in Australia, some economists have suggested that the Australian economy would enter a recession without international students. That’s because international students drive support for over 250,000 Australian jobs,3 which is nearly 2% of all jobs in Australia.4
It’s likely that other destination countries are also avoiding economic recession thanks to the jobs supported by international students:
International students supported over 368,000 jobs in the US in 2022/23,5 an increase of 10% over the previous academic year. In fact, one US job was created for every three international students in the US.
Similarly, in 2022, international students supported over 361,000 Canadian jobs, or 246,000 full-time equivalents.6
What’s more, the importance of international students to the global economy goes beyond just supporting current jobs. Projections show that the population of citizens aged 65 and over will reach 20% or more by 2030 in each of the “Big Four” English destinations. This means that international students will be critical to replacing retirees over the next decade, especially in high-demand fields such as health care and the trades. Without these international students, Australia, Canada, the US, and the UK will all face shrinking workforces and a lack of educated graduates ready to unlock future economic development.
Experts have argued that, just as the risks of climate change were warned about decades before they came to pass, we are now on notice about the demographic changes that will reconfigure our economy and our society in the next 20 years.7
International Students as Innovators and Job Creators
In addition to supporting jobs and replenishing the workforce, international students play a critical role as innovators, finding new solutions to global challenges and, in turn, creating jobs. For instance, the chart below showcases how many billion-dollar startups were founded by former international students in the US:
In 2022, 143 of the billion-dollar startups in the US had a founder that first came to the country as an international student. For comparison, this number was just 21 in 2018. This incredible growth helped drive local economies, with these billion-dollar startups creating an average of 860 jobs each in 2022.
Given this track record of innovation, it’s not surprising to see international students leading the charge in advanced AI in the US. As previously highlighted, 42% of the top US-based AI companies had a founder who was a former international student in the US. And this figure will likely grow: 71% of full-time graduate students at U.S. universities in computer and information sciences—the most common field for AI researchers—are international students.8
Former Graduates Driving Creation of New Companies in the UK and Canada
The US isn’t the only destination in which former international students are innovating and creating new jobs. International graduates founded nearly 60% of British university startups in 2020. This entrepreneurship is widespread, as over 800 startups were founded from 94 different UK universities according to findings by venture capital firm Creator Fund. Additionally, about 39% of the UK’s 100 fastest growing companies in 2023 had a foreign-born founder or co-founder.9
The story is similar in Canada, with studies showing a correlation between education attainment and the likelihood of business ownership. Among first generation newcomers, 5.4% of those who held a bachelor’s degree were owners of an incorporated business with employees. Further, 7.9% of those who held a graduate degree owned such a business. That’s a combined 13.3%. For comparison, only 11.5% of Canadians who were third generation or more held at least a bachelor’s degree and owned a similar business. In total, immigrant entrepreneurs account for 33% of all Canadian business owners with paid staff.10
ApplyBoard itself, one of Canada’s fastest growing tech companies, was founded by former international students. We’ve been pioneering AI work in international ed to help millions of students around the world increase their access to a global education.
Looking Ahead
International students are key drivers of the global economy, spurring innovation and supporting millions of jobs in their home countries and wherever they chose to study. And international education provides them with the skills and experiences they need to build diverse and inclusive mindsets, develop cutting-edge technologies, and fill critical skill-gaps once they complete their studies.
Indeed, entrepreneurship and innovation go hand-in-hand. Former international graduates have founded some of the most innovative startups around the globe, spurring new jobs and stronger local and global economies. And they are leading the way on new technologies that have the potential to reshape the way we work, including artificial intelligence.
Given how critical these students are to driving both innovation and economic stability, we strongly advise the international education sector in “Big Four” destinations to consider and recognize the long-term consequences of any decision that could result in barriers for these trendsetters. Student demand has already shifted away from many of the “Big Four” destinations due to months of change in 2024. With many destinations looking to increase their appeal to students—including South Korea, France, Taiwan, India, Japan, and Iran—supporting international students throughout their study abroad and post-graduation journey will be critical in the coming years. International students create huge potential wherever they go, and those countries that recognize and amplify this potential will be poised to change the world for the better.
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FOOTNOTES:
1. Vox, How AI could explode the economy. March 2024.
2. NFAP, AI and Immigrants. June 2023.
3. Nairametrics, Australian authorities project loss of 250,000 jobs dependent on foreign students. June 2024.
4. According to the Australian Bureau of Statistic’s July 2024 Labour Force Survey.
5. NAFSA, New NAFSA Data Reveal International Student Economic Contributions Continue to Rebound. November 2023.
6. IRCC, Economic impact of international education in Canada — 2022 update. November 2023. This is the latest available data, and measures jobs supported both directly and indirectly.
7. Fortune, Here’s what an aging workforce means for America’s employers. September 2022.
8. NFAP, AI and Immigrants. June 2023.
9. The Entrepreneurs Network, Job Creators: 2023. August 2023.
10. Policy Options, Immigrant entrepreneurs need targeted support. May 2023.
