As the legal battle rages on around Donald Trump’s chaotic travel ban and moratorium on refugees – not to mention last year’s “Breaking Point” poster depicting an EU overwhelmed by a flood of asylum seekers – you could be forgiven for thinking that the West faces an existential threat unparalleled in its history. Yet as politicians rush to placate and at times inflate public fears about the negative impact of refugees on jobs, public services and national security, a growing body of research strongly suggests that refugees – far from being passive welfare claimants – create businesses and jobs wherever they go. Instead of accelerating the West’s economic decline, refugees might just be a part of the solution.
Forced to flee from violence and persecution, countries accept refugees for humanitarian reasons rather than self-interest. Nevertheless, there is also a convincing economic rationale for welcoming refugees with open arms. Throughout history, people fleeing destruction and persecution have contributed hugely to their adoptive countries. From the Huguenots who arrived in England in the 17th century bringing with them their expertise in textiles, watchmaking, carpentry and science, to the Jewish diaspora that escaped war-engulfed Europe to America’s great benefit, and the Cuban refugees that have become inseparable from Miami’s culinary and cultural identity, nations have long reaped the benefits of harbouring those with no place else to go.
Fast forward to today, where a succession of devastating wars in the Middle East – Afghanistan, Iraq and now Syria – has led millions to flee in search of refuge, mostly to other countries in the region, but also into Europe and North America. Yet despite both academic research and the historical record suggesting otherwise, voters in many developed countries are alarmed by what they see as an influx of welfare scroungers or worse – terrorists. This has led to a political reluctance to take in greater numbers of refugees, and has meant that countries are missing out on a potentially dramatic boost to their cultural and economic prosperity.
This is not to say that refugees do not face a whole host of challenges once they arrive in their host countries. While many bring with them valuable skills and education – this is particularly true of the current wave of Syrian asylum seekers – finding regular employment nonetheless poses substantial difficulties. Despite many having had successful careers back home, refugees often struggle to get hired in the formal economy. While the reasons vary – from language barriers, unrecognised qualifications and extended unemployment during the asylum period, to uncertainty around working rights and even blatant prejudice – the outcome is the same: unemployment, and frequently destitution. Of those refugees that do find jobs, over half feel overqualified for them.
In response to this frustrating underutilisation of skills, talent and experience, some are positing entrepreneurship as a solution. Unlike a traditional job, being an entrepreneur enables a refugee to circumvent many of the difficulties inherent in the hiring process and pursue a passion or idea on its own merits. As a vehicle of social mobility less determined by social standing or cultural origin, entrepreneurship is often an ideal career path for individuals without any roots or contacts in their new country. The resilience a person acquires in the process of leaving his or her home, livelihood and culture – while undoubtedly arduous – may also prepare them for the challenges of starting and running a new venture.
Take Turkey for example, where over the past five years Syrian refugees have set up over 4,000 businesses, bringing with them $220 million in capital and making up over a quarter of all new foreign-owned firms established annually. Pioneering research carried out in Uganda by Oxford University professor and director of the Refugee Studies Centre, Alexander Betts, found that the presence of refugees from neighbouring countries dramatically boosted local purchasing power, employment and human capital. In the capital city of Kampala, 21 percent of refugees run businesses that employ other people. A study in the state of Ohio calculated that local refugees benefited local and state government coffers by $2.7 million in 2012, while their businesses contributed $12 million in local spending and supported 175 jobs. And data from the Australian Bureau of Statistics shows that refugees make twice as much money from their own businesses as people arriving on skilled and family visas.
Given that the UK has been criticised for not doing its fair share in admitting refugees, how relevant is the notion of the entrepreneurial refugee to these shores? While compared to some of its European neighbours (including Germany, Sweden and Italy) the UK has not accepted a large amount, it has still committed to bringing over 20,000 Syrian refugees by 2020, without counting the roughly five to ten thousand from other countries that are granted asylum each year. On top of the further 120,000 refugees already estimated to be here, the UK has a substantial number of refugees – and by extension potential entrepreneurs – to work with.
Ensuring that refugees are quickly integrated into the UK’s social and economic structures is essential if they are not to be perceived by the public as a burden. Yet as it stands, asylum seekers here face a hard time finding their feet once – or rather if – their applications are accepted. With the abolition of the Home Office Refugee Integration and Employment Service (RIES) in 2011, government strategy has been lacking in this area, while cuts in public funding to legal aid and refugee charities have exacerbated the problem.
Furthermore, given the complexities and inevitable delays refugees face in acquiring bank accounts and National Insurance Numbers, many fail to access benefits and social housing before the termination of their meagre asylum support. With no right to work until an asylum decision has been reached and problems finding employment afterwards, it is no wonder that many end up in poverty and homelessness.
Yet it doesn’t need to be this way, and a look at the data on refugees suggests a way forward. While unemployment and underemployment are high among UK refugees, official government statistics also reveal that they are the most likely to be self-employed of all migrant groups (themselves more likely to be working for themselves than the native-born). This corroborates recent research by think-tank the Centre for Entrepreneurs which found – based on an analysis of publicly registered companies – that migrants start more companies and create more jobs per head than the UK-born. However, while case studies abound of refugees turned successful entrepreneurs – from Michael Marks of Marks & Spencer and Rashmi Thakrar of Tilda Rice to Adnan Medjedovic and Edin Basic, two Bosnian refugees who founded thriving UK gourmet pizza chain Firezza – many could still do with a helping hand.
To satisfy that need, several promising initiatives have emerged in the UK that aim to support refugees in starting companies. The Entrepreneurial Refugee Network (TERN) was set up in 2016 by several university graduates that had volunteered in European refugee camps and become passionate about developing a novel solution to the crisis. TERN is an incubator programme that helps a select group of refugees start businesses by addressing the obstacles – including isolation, lack of UK specific business knowledge and non-existent credit history – that prevent them from doing so.
TERN describes its mission as “supporting refugees to become agents of their own change”, which it does by providing them with training, mentorship, networks and investment. Having just completed an initial pilot, it is set to launch its first complete programme in just a few weeks, with 15 participants chosen from around 60 applicants. According to Charlie Fraser, co-founder and director at TERN, refugees “are mobile and quick to gravitate to gaps in the market.”
As one programme gets off the ground, another has gone from strength to strength over the past few years. Her Equality Rights and Autonomy (HERA) trains female survivors of human trafficking in entrepreneurship. While not identical to refugees, survivors of human trafficking and exploitation usually have just as little say in leaving their homes, while in any case a large proportion go on to seek asylum. As Gokce Tuna, HERA’s UK Programme Director explains: “While awaiting a decision, the women are unable to undertake paid work, and once granted asylum they face significant challenges finding employment”.
Originating mostly from Africa and Eastern Europe, “most of them grew up in poverty and sometimes have no family left, which combined with scarce local job opportunities makes them prime targets for traffickers.” Tuna emphasises the educational deficiencies, unfamiliarity with local norms and lack of stable accommodation that continue to disadvantage the women even once they have been granted asylum.
Every year, HERA puts selected trafficking survivors through an intensive entrepreneurship training programme hosted and supported by Imperial College Business School. During three activity-packed weeks in the summer, up to 50 participants learn about developing a business idea, managing finances and marketing and presentation, while also gaining expertise in negotiation skills, networking and business etiquette. Upon completion, each woman receives a certificate from the Imperial Business School and is paired up with a HERA mentor in their area of interest for a minimum of 12 months. They also attend monthly seminars to continue their development.
While some do go on to become entrepreneurs, HERA students have also gone on to pursue successful careers as nurses, social workers, doctors, managers, lawyers and fashion designers, to name just a few. According to Tuna, an impressive 85% either start ventures, find employment or continue their education, with only a small remainder failing to stay in touch. She stresses that it isn’t primarily about getting the women to start businesses; “entrepreneurial skills and an entrepreneurial mind-set are important in every area of life”.
Instead of seeing refugees as a one-way burden on the economy and the state, we need a different vision that celebrates their potential to improve and rejuvenate our societies – as entrepreneurs or otherwise. This isn’t wishful thinking – the evidence supports it – but it will require drawing attention to inspirational success stories, reframing the negative narrative around refugees, and supporting initiatives that help fulfil their potential.
Follow Maximilian Yoshioka on Twitter: www.twitter.com/M3Yoshioka
This article was originally featured in the Huffington Post.