| Description |
Migrant entrepreneurship has received increasing attention
from policy makers, stakeholders and scholars. In both the
Action Plan for the integration of third country nationals and
the 2020 Entrepreneurship Action Plan, the European
Commission emphasises that entrepreneurship represents an
alternative form of decent and sustainable employment for
migrants. This also follows recent academic and non-academic
studies on the topic (European Commission, 2016; Rath, Solano
and Schutjens, 2019).
There are at least four reasons why policies and measures
should focus on supporting migrant entrepreneurs, especially
in early stages of the business:
• Self-employment represents a way towards
empowerment. Although it cannot be taken for granted that
self-employment provides migrants with a higher income in
comparison to those who opted for a salaried employment (see
Bradley, 2004), self-employment represents a way to tackle
unemployment, and underemployment - professional
downgrading and employment in poorly paid, dangerous and
demanding jobs (Rath, Solano and Schutjens, 2019).
Furthermore, through migrant entrepreneurship, migrants can
improve their social status in the receiving society (Allen and
Busse, 2016; Basu, 2001; Solano, 2015).
• The impact of migrant entrepreneurship goes way
beyond the benefits for the individual entrepreneur. In
quantifiable terms, the number of firms, the employment
creation, the volume in trade and sales are increasing,
something that may benefit the economy in general (Desiderio,
2014). Migrant entrepreneurs also bring about qualitative
economic and market changes that result in relatively new
products and processes. They gravitate to particular
neighborhoods or areas, thereby creating interesting places for
leisure and consumption and revitalizing these areas (see,
Aytar and Rath, 2012).
• A relevant number of migrants starts a business. While many international migrants are economically active as
wage workers (i.e., employees), a small but significant number
has chosen or would like to start a business. About 13 per cent
of all foreign-born migrants in OECD countries are selfemployed (OECD, 2010 and 2013). The same happens for the
EU28 countries, in which around the 12% of foreign population
is self-employed (Eurostat, 2017). In many countries the rate of
self-employment among migrants is higher than the one of
natives (Eurostat, 2017; OECD, 2010 and 2013).
• Migrant-owned business are likely to fail and to be
in low-profitable sectors. Despite self-employment and
entrepreneurship represent a promising alternative option for
migrants to access the labour market, they need to be
adequately supported by policies and initiatives. In fact,
migrant enterprises have higher failure rates than nativeowned ones and tend to concentrate in low-profitable sectors
(e.g., petty trade) with no possibilities of growth (Desiderio and
Mestres 2011; OECD, 2010; Rath and Schutjens, 2016).
The difficulties that migrant entrepreneurs have in running
the business is due to some specific obstacles that migrants –
and, more in general, vulnerable groups -face when they want
to start a business. The obstacles are well-known and there is
an extensive literature on this (Desiderio, 2014; Rath and
Swagerman, 2016):
• they have difficulties in accessing credit, especially
for financial institutions. As they often lack collaterals (e.g.,
they do not own a house), financial institutions are likely to
deny credit to them. Consequently, migrant entrepreneurs
normally receive small loans from relatives, friends and other
migrants. This hampers the possibility of entering in sectors
that requires a relevant starting capital, which are normally
more profitable.
• migrant entrepreneurs have difficulties to deal with
the bureaucracy of the host country. They have difficulties in
understanding all the administrative steps to start the business.
• they (often) lack of familiarity with the (business)
environment and the market where they start the business.
Having only limited knowledge of the context of the destination
country – with often information received from other migrants
– tunnels them towards ethnic and/or not profitable markets.
• a limited personal network, which is often
composed of other migrants, does not help in dealing with
bureaucracy or accessing information on potential unexplored
market – as other migrants have often limited information as
well.
In conclusion, migrant entrepreneurship may represent an
alternative way to access the labour market of the host
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country. However, migrant entrepreneurship often results in
low-profitable highly-demanding micro businesses, which do
not represent a decent form of employment. This is because of
the barriers that migrants face when it comes to start a
business.
Migrant entrepreneurship needs to be supported to become
an alternative form of decent employment. Policy makers and
support providers (e.g. public employment services, NGOs,
microcredit institutions) often face many obstacles in the
design and implementation of support policies for migrant
entrepreneurs.
This handbook is addressed to policy makers in the field and
support providers and aims at summarizing the main kinds of
support that can be provided to migrant entrepreneurs and the
factors for successful support measures. In doing this, we
present some good practices.
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