Entrepreneurship could be key in the economic progress of Europe in the coming years. And, not so surprisingly, Immigrants are best suited to take up this helm. Prof. Concepción Galdón, IE Center for Social Innovation together with innovation consultant and Top 100 Women In Social Enterprise 2022 Laura McDermott tell us how.
Migrant Entrepreneurship: Reshaping a collective conception by Concepción Galdón and Laura McDermott.
Migration and perception
Few regions in the world have experienced the pain and loss that comes with nationalism and the benefits brought by integration as acutely as Europe, over barely a century. In the 20th century, Europe, the cradle of Humanism and the Enlightenment, saw some of the most heinous crimes ever committed by humankind within its territory. Immediately, the same Europe, in which millions had just died, was able to rebuild itself on the solid foundations of solidarity and a melted identity.
The prosperity created by these values turned Europe into one of the most attractive migration destinations worldwide. Migrants took jobs that ‘needed to be done’ and they created businesses that in turn generated additional jobs. Our economic growth in the face of ever-decreasing birth rates could have never happened without these migrants. Unfortunately, the pendulum might be oscillating backwards. Present generations seem not to remember lessons we learned in the hardest, saddest way.
Given the rise in populism across Europe in recent years, and a gravitation towards a ‘them versus us’ mentality, entrepreneurship among immigrants, specifically those of less affluent countries, might well be in danger. We see countless examples in European politics that indicate a move towards nationalism and monolithic identities. The danger of extremism of this sort is that it creates a ‘group polarisation’ effect, where exclusivity and closedness towards different perspectives and values become potent.
In terms of entrepreneurship, and particularly in the case of less affluent immigrants, such mental models and the systems and/or policies that follow, prevent the flourishing of new businesses.
Entrepreneurs by birth?
Many believe that migrants entering from less affluent countries are simply cheap labour, but in fact they hold many of the ingredients necessary to be an entrepreneur. Yes, an entrepreneur. Indeed, the prevalence of entrepreneurial activity among migrants is solidly established in literature (Hormiga and Bolívar-Cruz, 2014, Levie, 2007, Peroni et al., 2016). So much so that Migrant Entrepreneurship has become a research field in itself (Ram et al., 2017, Baycan-Levent and Nijkamp, 2009).
The case of Europe is no different. Research in Spain, the UK, Germany, Luxembourg, and Sweden, to name a few countries, shows trends consistent with the statements above (Hormiga and Bolívar-Cruz, 2014, Levie, 2007, Mickiewicz et al., 2019, Peroni et al., 2016, Constant and Shachmurove, 2006, Efendic et al., 2016). Moreover, migration-related variables are better predictors of entrepreneurial activity in a region than other variables relative to economic conditions (Levie, 2007).
There are plenty of examples to illustrate the wealth created by migrants in their host countries. Take Berlin-based mimycri, a circular economy brand that creates high quality bags from upcycled refugee rubber boats. The brand’s German founders began the initiative during their time in the Greek island of Chios, where they collaborated with refugees to start the organization. Moving out of their comfort zone by volunteering on the island, being resourceful through their use of materials and co-creating an organization with diverse profiles are indicative of an entrepreneurial mindset.
Another very poignant case is that of the brand Road to Damascus. Steve Ali, a Syrian entrepreneur, spent time in a jungle refugee camp in Calais before arriving to London, where he established the jewellery brand. Since beginning, the brand has received attention from figures in the fashion industry such as Vivienne Westwood. The high-fashion designer features on the brand’s social medias pages holding a ring that Ali crafted made from a nail that was snapped off the wall of the Calais shelter.
The factors leading to greater participation of migrants in new business creation are varied. The migration experience seems to self-select risk-taking individuals. Findings from a study in Spain show that migrants are less likely than local populations to perceive starting a business as risky (Hormiga and Bolívar-Cruz, 2014). In addition, there are push factors such as lower employment rates or low status in the labour market, and accompanying factors such as mixed embeddedness (Baycan-Levent and Nijkamp, 2009).
Oftentimes we read thought pieces about resourcefulness, resilience and comfort with uncertainty as being key factors for entrepreneurial success. Immigrants, particularly refugees and those of less affluent economies, are often forced to develop these characteristics as a means of survival.
Entrepreneurs in Europe
Within Europe there exists the Entrepreneurship 2020 Plan, which aims to create ‘smart, sustainable, and inclusive growth’ through entrepreneurship of immigrants. The European Commission realises the value of immigrant entrepreneurship, and acknowledges the obstacles faced on a social, policy, legal and linguistic level. That said, the 2020 plan was created and based on three pillars: entrepreneurial education and training; an environment where entrepreneurs can flourish and grow; role models and outreach to specific groups.
This focus is consistent with research. Migrants with higher educational attainment are more likely to be self-employed entrepreneurs than those with less training (Cueto and Rodríguez Álvarez, 2015). In addition, research in Sweden shows that businesses led by OECD migrants show higher growth rates than those led by natives, while businesses led by non-OECD migrants show lower growth rates (Efendic et al., 2016). This speaks to segmented integration rather than universal assimilation, according to the authors.
Attempts from key institutional bodies such as the European Commission further emphasise the need to facilitate the growth of commerce among potentially marginalised groups. According to the Commission, migrant entrepreneurship “is a powerful driver of economic growth and job creation: it creates new companies and jobs, opens up new markets, and nurtures new skills and capabilities” (European Commission, “Migrant entrepreneurs”).
Migrant Entrepreneurship: Diamonds in the rough
This reality, solidly grounded on research, should lead Europeans to understand the convenience of the abovementioned policies to integrate migrants, upgrade their training and take advantage of the opportunity they bring. However, research shows that attitudes towards migrants have less to do with economic variables and are more related to the fear of cultural impacts on the receiving nation (Hainmueller and Hopkins, 2014). It looks like, when protectionist feelings kick-in, our guts reject those different from us and our brain comes up with economic narratives to give a rational back-up to our fear.
Europe’s prosperity turned the region into a magnet for resilient, risk-taking, entrepreneurial people from all around the world. It is our belief that these characteristics should be leveraged to help immigrants cultivate economic prosperity not only for the economies in which they reside, but also for themselves and their families.
Migration is an unrivalled tool to advance the SDGs; a set of goals globally pledged and promoted by the United Nations. The same United Nations which was built on the very same values that brought Europe together and led us to the most prosperous decades in our history. Humanism, solidarity and our ability to create a joint identity are necessary for Europe to make the most of the immense opportunity Migrant Entrepreneurship can create.
- Link up with Concepción Galdón and Laura McDermott on LinkedIn
- Read a related article: Beyond politics – the economic case for migration
- Discover and study at IE Business School.
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