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Refugee Entrepreneurs

Refugees are seeking asylum in Europe in large numbers. They are dividing societies and politicians are raging without any facts about possible solutions to solve this crisis. Populism arises in every corner of Europe. People are afraid of the disorganized arrival of millions of migrants and refugees. One thing for sure: Europe needs to enable the integration of accepted refugees by offering high-quality language courses, education, and job training. But what most politicians are overseeing are the possibilities and chances of entrepreneurship.

Familiarization to the Everyday Work Life

In Germany, it is a hotly discussed topic, when and how to integrate refugees into the labor market. German authorities propose to create so-called 1-Euro-Jobs. 1-Euro-Jobs are basically basic labor jobs e.g. cleaning jobs which are paid with a symbolic 1 Euro per hour. These jobs were part of a Hartz reform in 2002 and they have been used successfully to reintegrate long-term unemployed people back to everyday work. They are called working opportunities with additional expenses compensation and everyone who is working in a 1-Euro-Job is receiving in addition to the hourly compensation social welfare benefits from the government. The German employment agency demanded the creation of 100.000 1-Euro-Jobs within German municipalities but to date, only 6.500 of these jobs exist.

1-Euro-Jobs are definitely a great way to familiarize refugees to a normal everyday work schedule but they are definitely not the answer to any problem. Education should first of all be the priority of refugee employment programs. Learning the local language and getting an Ausbildung – a 3-year job training which is substituting a college education – is essential for a successful integration. But governmental officials are overseeing the potentials of entrepreneurship.

Freedom to Conduct a Business

The Charter of Fundamental Rights of the European Union comprises 50 articles. Article 16 says: “Freedom to conduct a business”. I am a strong advocate that entrepreneurship is the key to fighting unemployment in Europe. This is true for unemployment which arose out of the financial crises in 2007-2012. It is also true for unemployed refugees. All member states of the European Union shall respect this right to conduct a business and enable policies which simplify the paperwork needed to start a business – not only for refugees but in general.

Entrepreneurship can not only reduce unemployment. When businesses are built by smart, brave, and big-thinking individuals they will also spur innovation and integration.

In general, the right to conduct a business is not limited to residents. The right applies to all natural (and legal) persons but it is oftentimes very difficult for nonlocals.

Migrant and Refugee Entrepreneurs in Europe

Migrants and refugees are making a small minority of business owners in EU member states. But this is not true for every state. In France, non-EU nationals formed 25,000 companies in 2010 which represents 4% of all newly established companies (Agence pour la création d’enterprises). It seems that non-EU nationals such as migrants and refugees have a higher tendency to entrepreneurship. This might have different reasons, for example, a lack of traditional skill set.  While migrants are apparently more likely to start a business the success rate of these businesses is still relatively low “compared to those started by nationals” (K. Kourtit and P. Nijkamp [2012], p.10).

Encouraging Refugee Entrepreneurship

It is easy to imagine that migrants are facing difficulties when they want to start a business. The freedom to conduct a business is partially limited. They face problems when securing financing for their business, the oftentimes lack the required knowledge legal requirements and regulatory processes. Language barriers and cultural differences are of course a problem as well. Authorities need to lower these barriers through targeted education and incentive programs:

  1. Identification of Entrepreneurs: Entrepreneurs may be identified by offering startup or business plan competitions to migrants.
  2. Training of Entrepreneurs: The education of migrants and refugees should not be limited to language and job training only. By offering access to courses about legal circumstances, business law, and other business related topics the barrier of starting a business may be lowered.
  3. Support of Entrepreneurs: We can support refugee entrepreneurs by offering consultation sessions or by arranging events and meet-ups where they are able to exchange their knowledge.
  4. Financing Businesses: When professionals have detected well thought out businesses governments or private investors should not refrain from giving refugee entrepreneurs the much needed financial support.

This is not about Tech-Startups

Usually, when you hear the term starting a business you might think about 20-30 years old white dudes who want to build the next Uber for dogs or Google for flowers. When we are talking about refugee entrepreneurship we have to ditch the idea to create a copy of the silicon valley. We rather have to focus on non-tech businesses. For example, we might encourage Syrian refugees to start a local Syrian takeaway restaurant which might become the next Starbucks or McDonald’s. These non-tech businesses also create more jobs than tech businesses.

Entrepreneurship as a Chance

The European Union is divided as never before. Unemployment exists everywhere and now millions of unemployed migrants and refugees are joining this total mess. Entrepreneurship might be the magical key to the high rates of unemployment. Entrepreneurship helps individuals out of unemployment. When combined with the right education and when supported the right way businesses also create jobs. When migrants are forming 50,000 well thought out businesses of which 25,000 succeed and employ an average of 6 people we created already 150.000 jobs. And we are not talking about 1-Euro-Jobs.

References

Kourtit, K., and Nijkamp, P. (2012), “Strangers on the move: ethnic entrepreneurs as urban change actors”, European Review, Vol. 20, No. 3


What is your opinion of migrant and refugee entrepreneurship? What are the best measures to lower unemployment by promoting entrepreneurship? Leave your comments and I will join the discussion!

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