The nature and scale of international migration and forced displacement has increased significantly over the past decades. Universities can fulfil their often-cited mission to lead social and economic capital formation for regional development (Stal, Andreassi, & Fujino, 2016) through incubation programmes, and especially in developing countries, where the majority of refugees are settled. With this article, we argue that higher education institutions can enhance their efforts in promoting refugee entrepreneurship by effectively empowering and integrating refugees into their new settlements (Collins, 2017).
Supporting refugees through entrepreneurship has already shown to be a successful strategy in numerous projects throughout the globe. For instance, Esmeraldes, one of Ecuador’s least developed provinces, received over 6000 refugees and 18000 asylum seekers in the past decade. Most of these refugees originated from Colombia. In time, not only their needs increased but also the negative attitudes of the locals towards them. Considering the high unemployment rate and a scant industry base in the region, the UNHCR launched a project in 2011 in collaboration with the Pontifical Catholic University of Ecuador in Esmeraldas (PUCESE) and other partners. The project aimed to enable refugees and asylum seekers to become the agents of their own integration by creating small enterprises and thus by contributing to the development of one of the under-developed regions in the country. As a result, half of the enterprises supported by the project showed a 10% increase in their earnings within the first quarter. Another group of companies achieved similar success in the following semesters. The rest of the participants was expecting to meet their targets in the coming year (Sánchez, Piñeiro & Saavedra, 2016). Such initiatives help to build capacity and increase resilience on the personal and community level (Fitzsimons, 2011). In addition, they have the potential to benefit the country’s economy and creates jobs on the national level. On a supranational level, refugees’ remittances, investment in the origin country and transfer of knowledge create dialogue and help to foster new partnership and trade routes (UNCTAD, 2018).
However, country-specific environments are often remarkably different, as observed by a longitudinal study in the Netherlands and in Australia. There are differences and challenges in the rate of labour participation between refugees and other types of immigrants in both countries (Bakker, Dagevos, & Engbersen, 2017; Collins, 2017). In Uganda, on the other hand, refugees can benefit from a relatively positive environment because the government grants them the right to work and more freely (Betts, Bloom, & Weaver, 2015). Therefore, when designing a business incubation programme, higher education institutions should identify systemic obstacles faced by refugees and adopt an inclusive approach to tackle them. Then, they can tailor their programmes based on these findings. Below we examine some of the common issues that refugees may face before they can actively engage in entrepreneurship in their host countries.
Therefore, when designing a business incubation programme, higher education institutions should identify systemic obstacles faced by refugees and adopt an inclusive approach to tackle them.
Unfamiliarity with local regulations and institutions
Setting up a business may be daunting as it involves administrative and regulatory challenges, such as filling taxation forms, obtaining work permits, meeting labour and security standards, to mention just some. Unlike economic migrants, refugees and asylum seekers often have no prior understanding or preparation in these areas, and so they often do not know how to access and make use of available resources and information in their destination countries. (Meister & Mauer, 2019). Since most refugees are not familiar with the new institutional or regulatory environment (OECD/European Union, 2019; UNCTAD, 2018), there is a need to put more emphasis on how to make legal information more accessible, and regulatory obligations and bureaucratic processes easier to understand and follow. Training programmes targeting refugee entrepreneurs may prove particularly helpful in addressing this challenge. According to a UN policy guide on entrepreneurship for migrants and refugees, the vast majority of entrepreneurship programmes have an educational component at their core (UNCTAD, 2018). With the help of such trainings, refugee entrepreneurs can develop their soft and hard business skills in accounting, organisational procedures and marketing-related activities.
To help with this challenge, a university-based programme for Tibetan refugees in India organises formal and informal events with university students, including Tibetan students, for language support. They also involve the law school’s Legal Entrepreneurship Cell, a pro bono initiative which offers legal and administrative supports to future entrepreneurs (Nayak, Salovaara, & Wade, 2019). This activity is beneficial for both groups: refugees report benefiting from the assistance offered even after the completion of the programme, while students say they gain knowledge and practical skills by working on real-life cases (Verma, 2017).
Lack of entrepreneurial mindset and motivation
Refugees’ prior working experience and entrepreneurial mindset and motivation may differ substantially from those of local entrepreneurs or other migrants. Many refugees or similar disadvantaged groups are less experienced in dealing with support organisations and are less self-confident in their ability to achieve entrepreneurship goals. Also, they have fewer financial resources and limited social capital (Bakker, Dagevos, & Engbersen, 2017;OECD/European Union, 2019). For this reason, they can be less economic opportunity-driven and, as a result, they tend to consider aspects like network ties, shared norms, and competencies earned in the host community to be more important. This calls for more intensive one-to-one support mechanisms, including coaching, mentoring, and advising by consultants. For one thing, conducting an introductory session for a couple of days in which facilitators indicate the aims and outlines of the programme, while refugees are asked to fill out surveys providing an overview of their background, motivations, as well as their preliminary business ideas, can catalyse the process of goal-setting and self-reflection.
Starting a business may not be suitable for all refugees as it demands a substantial amount of time, energy, and financial resources. After all, not all refugees are born to be entrepreneurs or have to become entrepreneurs.
Starting a business may not be suitable for all refugees as it demands a substantial amount of time, energy, and financial resources. After all, not all refugees are born to be entrepreneurs or have to become entrepreneurs. Therefore, Nayak et al. (2018) recommend developing a self-evaluation tool for refugees as a means to assess whether this is the best pathway for them or if they should look for alternative routes during the inception session. The researchers also mention a short (30 seconds to one minute) talk at the beginning of each day as a way for refugees to better understand their strengths, weaknesses, and areas for improvement. In one programme, refugees were required to introduce themselves, their company, and the key product/service of their venture. The first and final pitch talks were recorded and analysed individually with a facilitator (Nayak, Salovaara, & Wade, 2019). Additionally, to visualise their plans and set benchmarks, two tools were used: a Business Model Canvas, which shows core components of a business plan, and Milestone-based budgeting, which indicates successive stages and funding resources in the business. Although entrepreneurs reported that the activity was challenging in the beginning due to unknown business terms, by the end of the programme, they were able to envision their company and its future in more concrete ways.
Another effective practice is to bring in mentors with a refugee background, who share the language and culture of their mentees. This helps to build trust between student entrepreneurs and support providers. A focus group interview with refugee entrepreneurs in Germany reveals that collaborating with peer refugees who share a similar background creates synergy and helps to identify commonalities and bolster solidarity. (Meister & Mauer, 2019). What makes this practice particularly valuable is that refugees reported an increased sense of belonging to the host community and the motivation to contribute to society.
Hindered interaction with locals and lack of market knowledge
A lack of market knowledge of the designation country can present yet another challenge for refugee entrepreneurs. Therefore, in addition to formal training sessions on marketing and communication, a more informal yet impactful and value-adding aspect of incubation programmes for refugees is to organise networking events such as demo-days or other promotion fairs (UNCTAD, 2018). For this, universities can collaborate with other institutions, organisations and groups who also look for networking opportunities with educational institutions. Startup Refugee in Finland and InnoCampus in Turkey are two successful examples of this strategy.
Startup Refugees, a Finnish networking platform, has more than 500 members including universities, NGOs and private partners. They create a profile for each refugee applicant and map out the refugee needs. They match refugees with business experts and provide courses about entrepreneurship. Building on their collaboration with different partners, they enable refugees to participate in start-up events aiming to connect entrepreneurs with investors.
InnoCampus, on the other hand, is a mobile entrepreneurship initiative in Turkey which cooperates with different universities in some of the major refugee-hosting cities. They hold an entrepreneurship programme at these venues for some time and end the programme with demo-days during which refugees can introduce their ideas and pitch to investors. These networking activities help incubates reach out to potential markets, customers, partners, and supporters, who then create an entrepreneurial ecosystem within the region. As a result, refugee entrepreneurs can integrate into local value chains and contribute to the creation of local or regional entrepreneurial ecosystem (UNCTAD, 2018). In other words, the refugee population is empowered through the networks they create. Networking helps them build up social, cultural, and human capital as a group.
Access to financial, material, and digital resources
Provision of financial capital by the incubator through equipment and materials support is an important motivation for refugees to start up a venture or grow a business. Incubators can apply reduced rent schemes if they have available space they can dedicate for such purpose. This could foster interest among refugees or disadvantaged groups to engage in entrepreneurship since rising commercial rents are a prohibitive factor for many prospective participants of start-up events (Lyons and Zhang, 2017 in OECD/European Union, 2019). Universities can also provide support and resources on business-related matters, such as accounting and taxation. This will also help incubators to reduce costs and enhance the quality of business ventures they nurture.
In addition, incubators are increasingly using online platforms as a cost-effective way to broaden accessibility to their services. Online spaces also improve access for women as they often find it more difficult to attend face-to-face programmes. (OECD/European Union, 2019). During this global pandemic, virtual incubation programmes can help to cast a wider net and facilitate knowledge exchange and experience between new entrepreneurs and programme supporters on national or interregional levels. These opportunities may be particularly fit for aspiring entrepreneurs from refugee and other disadvantageous groups.
In summary, higher education institutions should be aware of specific issues when designing the content and the format of their incubation models for refugees. The programme should provide intangible value-adding services for establishing new ventures, including evaluation of market opportunities, refugee needs-focused training and upskilling in essential competencies, enhanced mentoring and networking capabilities, and better access to financial capital, material and digital resources.
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