Open for Business

Open for Business

Migrant Entrepreneurship in OECD Countries You do not have access to this content

Click to Access:
  • PDF
  • READ
29 Nov 2010
9789264095830 (PDF) ;9789264095823(print)

Hide / Show Abstract

Migrants contribute to the economic growth of their host countries in many ways, bringing new skills and competencies with them and helping to reduce labour shortages.  An aspect that has received only limited attention up to now is migrants’ contribution to entrepreneurial activity and employment creation in their host countries.  In OECD countries, entrepreneurship is slightly higher among immigrants than natives and the total number of persons employed in migrant businesses is substantial, although the survival rate of these businesses is often lower than that of their native counterparts. Migrant entrepreneurship has gone beyond traditional ethnic businesses, into a wide range of sectors and innovative areas.  

Greater knowledge of migrant entrepreneurship is essential if policy makers are to better support migrant enterprises and their role in economic growth and job creation. In addition, increasing awareness of the positive role that migrants can play as entrepreneurs could contribute to a more balanced public debate on immigration.   Taking a cross-country perspective, this publication sheds light on these issues and more, discussing policy options to foster the development and success of migrant businesses. It is a compilation of papers presented at a June 2010 conference organised by the OECD Secretariat, with the financial support of the Swedish and Turkish authorities, and the Dutch-Turkish Businessmen Association (HOTIAD).

loader image

Expand / Collapse Hide / Show all Abstracts Table of Contents

  • Mark Click to Access
  • Foreword
  • Main Findings of the Conference on Entrepreneurship and Employment Creation of Immigrants in OECD Countries, 9-10 June 2010, Paris
    Immigrants bring new skills to receiving countries, provide flexibility in the labour markets and help address labour shortages. They contribute to the economy as employees but also as entrepreneurs, creating new firms and businesses. Immigrants’ contribution to growth in entrepreneurial activity and employment creation in OECD countries has increased over the past decade. This can be measured in qualitative as well as in quantitative terms. In most OECD countries immigrants are slightly more inclined to engage in entrepreneurial activities than natives. Those activities go beyond traditional ethnic businesses and migrants are now creating businesses in a wide range of occupations and sectors, including innovative areas. Thanks to their transnational ties, migrant entrepreneurs can also contribute to expanding trade between the host country and their countries of origin.
  • Add to Marked List
  • Expand / Collapse Hide / Show all Abstracts Migrant Entrepreneurship in OECD Countries: Magnitude, Contribution to Employment and Specific Migration Policies

    • Mark Click to Access
    • Migrant entrepreneurship in OECD countries and its contribution to employment
      The relative importance of immigrant entrepreneurship varies significantly, both across OECD countries and between immigrant groups. Furthermore, migrant entrepreneurs' contribution to employment creation in OECD countries rose steadily during the period 1998-2008. Migrant entrepreneurs have different individual backgrounds than both native entrepreneurs and migrants in wage employment. They are, on average, more educated and work in a wide range of occupations and sectors, including non-ethnic business sectors. Although migrant entrepreneurs are more likely than natives to create a new business in almost all OECD countries, in relation to their population size, the survival rate of their businesses is lower than for natives. Migrant entrepreneurship behaviour is affected by credit constraints and duration of residence in the host country, among other factors. The selective dimension of migration processes may partly explain why migrants are, on average, greater risk-takers than natives and thus have a higher entrepreneurial spirit in many OECD countries.
    • Migration policies in OECD countries to manage the migration of foreign entrepreneurs and investors
      The potential contribution of migrant entrepreneurs to the economies of host countries interests policy makers. A majority of OECD countries have increasingly adopted migration measures that apply specifically to foreigners willing to migrate in order to create or operate their own business or invest their capital in the country. These policies are designed to select immigrant entrepreneurs and investors likely to contribute to the growth of the national economy and to encourage them to settle. However, those policies account only for a marginal fraction of all entrepreneurial activity by migrants in OECD countries, as most foreign entrepreneurs enter through other channels. Several other factors may also influence migrant entrepreneurs' choice of the country in which to establish their businesses. International agreements setting preferential admission conditions for nationals of the partner countries and, more generally, existing economic and public policies to support independent activity play an important role in this process. 
    • Add to Marked List
  • Expand / Collapse Hide / Show all Abstracts The Determinants of Migrant Entrepreneurship and Employment Creation by Immigrants in OECD Countries

    • Mark Click to Access
    • Shifting landscapes of immigrant entrepreneurship
      Although immigrant entrepreneurship still comprises small businesses confined to lower segments of markets, today immigrant entrepreneurs are also visible in the high-value activities that characterise advanced urban economies. The potential of self-employment to open up avenues of upward social mobility has  also increased over time. This qualitative shift from low-value to high-value added business has emphasised the potential significance of immigrant entrepreneurs for the national and, in particular, local economies in settlement countries. Immigrant entrepreneurship can be characterised by a mixed embeddedness approach, which includes interaction between the personal resources of migrants, the resources of migrant communities (such as access to financial support, consumers, suppliers and advice) and the opportunities presented by the host country with respect to labour market structures and regulation, government incentives and public opinion. Among other factors that contribute to shape opportunities for immigrant entrepreneurship in a country are the specific policies implemented to promote it. 
    • The determinants of immigrant entrepreneurship and employment creation in Portugal
      In Portugal, as in other receiving countries, during recent decades immigrants achieved higher entrepreneurial rates than natives. However, a detailed analysis of official data makes it clear that not all immigrant groups have the same propensity to become an entrepreneur in Portugal nor the entrepreneurship rates and/or the employment created by immigrants in the country are constant in time. This chapter aims to explain these trends throughout the identification of several determinants that frame immigrant entrepreneurship. Three explanatory dimensions are emphasised: the Portuguese opportunity structure (in particular, the interference of the legal framework and the labour market), the community entrepreneurial resources of each immigrant group and the personal characteristics of the entrepreneur himself.
    • Entrepreneurship among immigrants in Switzerland
      This chapter describes and analyses entrepreneurship among the immigrant population in Switzerland, on the basis of self-employment data. The first section presents the self-employment situation as reflected in the most recent Swiss Labour Force Survey conducted by the Swiss Federal Statistical Office. These data are then used, together with data from the last population census conducted in 2000, to address the question of jobs created by self-employed workers of foreign origin. The same data are used in the second part of the article to test a series of explanatory hypotheses current in the international literature on self-employment and migration.  This research has two original features that distinguish it from the existing literature on self-employment and migration. First, it offers a systematic comparison of the situation of persons of immigrant background vis-à-vis the native-born; second, it is not limited to examining independent workers in terms of their legal nationality but also takes into account their origin and possible naturalisation.
    • Add to Marked List
  • Expand / Collapse Hide / Show all Abstracts Entrepreneurship and Employment Creation by Immigrants: Experiences from Selected OECD countries

    • Mark Click to Access
    • Business creation in France by entrepreneurs from outside the European Union
      This chapter analyses business creation in France by immigrants from a country outside the European Union, based on longitudinal data collected through the Information System on New Enterprises survey system (SINE). This system allows for tracking the life-cycles of individual enterprises created in France and thus enables analysis of the process by which migrant entrepreneurs set up their businesses. In particular, this chapter describes the evidence resulting from the 2006 survey concerning the specific profile of the entrepreneurs of foreign nationality, compared with their counterparts of French nationality, as well as the specific characteristics of the businesses they established in France. In addition, it provides a brief description of the development of those businesses in their first three years of existence, primarily in terms of employment and turnover. 
    • Self-employment amongst ethnic and migrant groups in the United Kingdom
      The United Kingdom has experienced diverse migration patterns since the late 1940s and in many ethnic minority groups the level of native-born members is rising. Thus, analysis of self-employment among ethnic and immigrant groups in the United Kingdom has tended to focus on ethnic differences rather on immigrant status. The self-employment experience of immigrant and ethnic groups in the United Kingdom has varied considerably over time. This chapter provides an overview of the characteristics of migrant self-employment in the United Kingdom and their evolution over time. Among other aspects, it analyses the evolution of self-employment propensity by ethnic groups. Only a relatively small fraction of the self-employed in most ethnic minority groups in the United Kingdom employ others. Although governments tend to view high levels of self-employment as a healthy indicator of entrepreneurial activity, large numbers of self-employed minorities is not by itself a good thing and government policy needs to pay attention to both the quantity and quality of self-employment. 
    • Chinese entrepreneurship in Canada
      This chapter analyses entrepreneurship within the Chinese community in Canada and estimates the level of employment created by Chinese-Canadian entrepreneurship there. Historically, Chinese entrepreneurship in Canada was limited to mainly ethnic businesses in retailing and food services. The growth of the Chinese-Canadian community and the rise of the Chinese middle class since the 1980s have resulted in a diversification of Chinese entrepreneurship, extending beyond conventional businesses and branching into professional and health services and other types of operations. The ethnic business as a niche market probably accounts for less than one-third of Chinese entrepreneurship in Canada. In addition, available evidence shows that Chinese entrepreneurs create employment for both Chinese and non-Chinese workers, with the vast majority of those employed being non-Chinese.
    • Mexican-American entrepreneurs and their contribution to the US economy
      This chapter examines Mexican-American business formation, ownership and performance. Comparisons are made to other racial and ethnic groups in the United States and to the national average; distinctions are made between first, second and third-generation Mexican-Americans. It also explains the potential causes of low rates of business formation among Mexican-Americans and the relative under-performance of their businesses. It examines the contribution of Mexican-American entrepreneurs to the US economy. Specifically, it estimates the percentage of new businesses, business owners and total business income generated by Mexican business owners, who make an important contribution to the US economy. However, there remains much untapped potential among this group of firms because of the substantial barriers they face. Mexican-Americans represent almost 10% of the US population, and if current trends continue will become the largest minority group in the country in a decade. Thus, removing barriers to entry and expansion faced by Mexican-American owned businesses would bring an important contribution to the increase of total US productivity.
    • Migrant women entrepreneurhip in OECD countries
      In recent years, the increasing ownership of businesses by women who are foreign-born or have ethnic origins has emerged as a new phenomenon. This chapter investigates migrant women entrepreneurship from the perspective of motivation, driving forces and gender-based differences. Based on several case studies from selected OECD countries, it analyses the factors that push migrant women towards entrepreneurship and that determine their entrepreneurial different behaviour compared to migrant men.  This chapter also examines the evolution over time in the motivation and driving forces pushing migrant women towards entrepreneurship.
    • Add to Marked List
  • Expand / Collapse Hide / Show all Abstracts The Contribution of Migrant Entrepreneurs to Innovation and the Expansion of International Trade

    • Mark Click to Access
    • Skilled immigrants' contribution to innovation and entrepreneurship in the United States
      This chapter describes the link between skilled immigration to the United States and innovation and entrepreneurship. Skilled immigrants to the United States, defined as those with a college degree, outperform college-educated natives in terms of wages, patenting, commercialising or licensing patents, and publishing. This success is due to immigrants who originally entered the United States on a student/trainee visa or a temporary work visa and is explained by their different fields of study and higher level of education. Skilled immigrants are also more likely to start successful companies than their native counterparts, apparently owing to higher unmeasured entrepreneurial ability. The effect of skilled immigration on per-capita patenting results to be larger than implied by immigrants' individual success, as immigrants have positive spill-overs on natives.
    • The contribution of migrants in enhancing foreign trade
      This chapter explains the role of migrants as facilitators of foreign trade. First, the theory of why migration across countries may lower trade-transaction costs and thus spur trade is described. Second, some of the most important empirical evidence on migrants' trade facilitating capabilities is provided. Finally, the chapter briefly discusses some implications for policy and explains how Sweden, a small and economically open country with a relatively large foreign-born population, has set out to utilise these findings to stimulate foreign trade.
    • Add to Marked List
  • Expand / Collapse Hide / Show all Abstracts Specific Difficulties Faced by Immigrants in Setting up and Developing their Businesses: Evidence from Selected OECD Countries

    • Mark Click to Access
    • Enterprises created in 2002 by non-EU nationals in France: finding it harder to survive
      This chapter analyses the reasons for the success/failure of enterprises owned by third-country nationals in France. The analysis is based on longitudinal data from the Information System on new Enterprises (SINE).  Foreign nationals are more likely than the French to set up their own firms, but those firms are far more vulnerable. Only 40% of migrant (non-EU) businesses created in 2002 were still in existence after five years, compared with 54% of corresponding native businesses. The first and third years are particularly difficult hurdles to overcome. However, rates seem to vary according to a number of business characteristics.  The third-country nationals owned enterprises that are most successful and aligned with French enterprises in terms of survival rates are commercial businesses and firms with a large, local client base. Conversely, construction businesses and individual firms are more vulnerable to failure than French firms in the same category. Among the others, the greatest factor in entrepreneurial success appears to be start-up capital investment.
    • Latina entrepreneurship and recent self-employment trends in the United States
      This chapter provides information on some recent trends in entrepreneurship in the United States, focusing, in particular, on the self-employment performance of Latinas (women of Hispanic background, both foreign- and US-born). Latinos represent the largest and fastest growing minority group in the US, and a group with low labour market outcomes. This chapter investigates whether self-employment should be considered a policy tool to broaden the labour market alternatives of Latinas.  Self-employment has grown substantially in the United States over the last three decades. Women and immigrants have played an important role in this growth. Latina business owners, who are mostly immigrants, represent an important group among these entrepreneurs. The average performance of self-employed Latinas appears favourable when compared to that of white female counterparts. However, Latinas in salaried employment have higher earnings than Latina business owners. In light of those findings, the determinants of self-employment decision for Latinas in the US are analysed.
    • Improving access to credit for migrant enterprises
      This chapter illustrates the main reasons for migrant entrepreneurs' limited access to credit from financial institution and analyses the effectiveness of the programmes that have been implemented to facilitate their access to bank loans and other financial services. Some policy options to improve migrant enterprises' access to credit are proposed, taking also into account the lessons learned from the recent financial crisis.
    • Add to Marked List
Visit the OECD web site