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Entrepreneurship and Migrants

Publication Papers

As industrialised countries face profound economic uncertainty and rising unemployment, a protectionist instinct may arise to limit international migration. That instinct is often based on the perception that the number of jobs is fixed and should therefore go toward natives rather than foreign migrants. Since the financial crisis, the United States has enacted legislation which discourages firms receiving financial bail-out funds from hiring foreign labour. The Czech Republic, Spain and Japan have each offered financial incentives for out-of-work foreign migrants to return to their native country. However, such action can be misguided, not only because migrants provide a solution to future demographic pressures and a new source of demand, but because migrants often participate in entrepreneurial activities.

This report reviews what factors influence entrepreneurship among immigrants and considers questions such as how culture influences entrepreneurship, what can enhance the success of migrant entrepreneurs and how different migration policies may help or hinder entrepreneurship. When reviewing these issues, it is important to consider different forms of migrant entrepreneurship. Some migrants start a business because they lack other employment options while, at the other end of the spectrum, often highly skilled migrants start very successful job-creating firms. This paper discusses different types of entrepreneurship and what factors can foster their success.

The document is structured as follows: Section 2 provides some background on the significance and nature of migrant entrepreneurship. Section 3 discusses what factors turn a migrant into an entrepreneur. Section 4 considers migrant involvement in high-growth, job creating firms and their contribution to innovation. Section 5 contains an overview on how migration policy differs across OECD countries and how that may have enhanced or hindered entrepreneurship. Section 6 outlines some empirical questions that can be tested and possible data sources. Finally, section 7 presents some conclusions and policy implications.