Economic development and innovation
Migrants and refugees can act as catalysts for economic growth in host countries because, in addition to their motivation and energies, they bring with them new skills, competencies and ideas that can help to innovate and grow markets. This is often referred to as the “diversity dividend”. The diversity that migrants and refugees bring to host economies creates value because people with different experiences, ways of thinking and social contacts can contribute new knowledge, ideas and approaches to problem-solving, thus helping to introduce new products and processes and grow markets through entrepreneurship or as employees in existing organizations.
Creation of new businesses
Migrants and refugees have a relatively high propensity to create new businesses. Research suggests that many migrants are naturally entrepreneurial because, having chosen to leave their countries of origin and build a new life abroad, they have a greater tolerance for risk and hard work. Some migrant and refugee groups may tend towards entrepreneurship because of their personal, family or cultural background. It has also been suggested that the entrepreneurial activity of migrants and refugees stimulates entrepreneurship among others (whether native or foreign-born).
Job creation
Research on job creation by migrant and refugee businesses has found that, in OECD countries, foreign-born entrepreneurs who own an SME create between 1.4 and 2.1 additional jobs, which is only slightly lower than the job-creation rate of their native-born counterparts (who create between 1.8 and 2.8 additional jobs).18 The UK Centre for Entrepreneurs specifically assessed local SMEs with a turnover of between £1 million and £200 million and found that migrant-founded businesses accounted for 14 per cent of job creation within this segment.19 The creation of jobs for other migrants and refugees further reduces the reliance of migrants and refugees on welfare benefits and lowers the costs of integration and resettlement.
Local economic development
Migrant and refugee businesses can play a vital role in revitalizing local economic areas, including low-income neighbourhoods in which migrants and refugees are often concentrated. Such businesses not only support the social mobility of the business owners themselves but also provide employment opportunities and skills training for members of their co-ethnic communities, who may be particularly vulnerable to exclusion from the labour market, as well as to other members of the native population.