Migrant businesses and entrepreneurship

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 | 2 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.

Objective: The objective of the study is to design an EU-wide scheme to attract high-skilled non-EU resident entrepreneurial innovators, and to facilitate the creation and development of high-potential companies in Europe. The study fits to the EC’s objective to boost innovation, growth and investments by unleashing the EU’s full capacities and competitiveness, while addressing the consequences of demographic ageing and offsetting skills shortages in the continent. Summary: The study will recommend a scheme to attract 20,000 migrant entrepreneurs per year to the EU through the creation of an electronic platform of services to potential migrant entrepreneurs, possible financial support and a promotion campaign. The direct objectives of the schemes are to facilitate access to the EU for non-EU nationals (visa scheme), create incentives (including linking to financial support), facilitate access to EU ecosystems, incubator schemes and private funding (via the platform) as well as to inform aspiring entrepreneurs. The study will include amongst other an assessment of existing (public and semi-public) initiatives in following EU Member States: Austria, Cyprus, Czech Republic, Denmark, Estonia, France, Ireland, Italy, the Netherlands, Portugal, United Kingdom, and Spain. Moreover, it will benchmark these against schemes in a number of non-EU countries with successful entrepreneurial support initiatives.

Research Questions Where do Chinese migrant entrepreneurs come from and why do they migrate? Where do they settle, and how do they organize their economic and social activities? How are they perceived by local and migrant African entrepreneurs in their host country? Does this perception correspond to the discourse of cooperation propagated by the Chinese and African governments? How does the Chinese presence influence the development of African host societies? Contribution to International Research This comparative study on the Chinese migration into two West African countries explores the economic and political processes triggered by the Chinese migration. It analyses the interactions of the local population with the Chinese migrant entrepreneurs as well as the former’s innovative reactions toward the strategies and practices of the latter. The combination of the different regional research capacities at the GIGA within one research team allows us to address this multidimensional research problem with adequate regional and multidisciplinary competences and research strategies. Research Design and Methods Our research field is characterized by high degrees of informality, especially regarding migratory paths, residence status, economic activities, social organization and the political action of all actors involved. In view of this, existing quantitative data on the micro- and meso-levels could not be taken as a reliable basis for our analyses. Moreover, the economic interests that characterize our field had the effect of reduced acceptance on the part of our informants of standardized instruments such as questionnaires. For these reasons, our research concentrates on coordinated qualitative comparative case studies within and across Ghana and Senegal in order to produce reliable research findings. In accordance with our research questions, qualitative data collection was conducted on a micro-level, drawing on the method of actor-centred participant observation and its adaptations in narrative interviews. Additional semi-structured interviews were conducted to ensure comparability across cases. In addition, visual ethnographic methods were applied (photo essays, network-mapping) as a basis for joint interpretation in the overarching research context. Preliminary Results We had assumed that networks formed the dominant model of social organization for both the African and the Chinese actors and groups we studied, and that networks were the key factors to understanding the interaction between these two groups. In the field, however, we were unable to establish any empirical evidence that the Chinese individual economic sojourners (or small groups forming family-owned businesses), whose business models tend to be highly speculative, are engaging in any form of meaningful social and economic interaction with their African counterparts beyond primarily functional and opportunistic buyer–seller or employer–employee relationships. African traders also did not reveal any stronger motivation to open their networks to their Chinese counterparts. Based on our observations, we conclude that a wide range of African actors engages in innovative practices not through social exchange and mutually beneficial cooperation with the Chinese newcomers but by creatively appropriating the unintended opportunities that Chinese actors provide in the local African settings through their distinct social and economic practices. However, the significations that are inscribed into the diverse Chinese social and economic practices and the stimuli they represent are contested between diverse African actors, since their social and economic positioning, their interests and interpretations, and their capacities for adaptation differ greatly. The Chinese business strategy of large-scale wholesale trading in combination with the low cost of the commodities they sell has facilitated the engagement of larger social strata with limited financial means in trading activities. These changes in market access, not least, have had a profound impact on Senegalese and Ghanaian market orders. Not surprisingly, many of the new traders whose access to this profession has directly benefited from the Chinese presence also closely observe the latter’s business strategies. All interviewed Chinese traders, for instance, unanimously employed the logic of high turnovers at small profit rates, aspiring to maximize incomes through sheer volume. Once the African traders have realized that trading in Chinese goods provides solid opportunities for capital accumulation and growth, they have turned their gaze toward China as source for their commodities.

Employment, unemployment and participation rates by place of birth and sex.