Entrepreneurship for all
Migrants are an extremely diverse group of people with different backgrounds and starting points. Obviously, it would be an oversimplification to talk about them as one homogenous entity. We can, however, make some generalizations such that immigrants (especially from third world countries) are underrepresented on the labor market and that entrepreneurship is often a strategy to improve those labor market positions and strive for financial independence. This claim is supported by the fact that immigrants have the highest startup rates all over the world and that, for example in Britain they are three times more likely to be entrepreneurial than people born in Britain (GEM 2016). People of immigrant background also have a notably higher rate of self-employment in Belgium, France as well as in central and Eastern Europe (OECD).
We took a deep dive into the topic of migrant entrepreneurship during a two-day seminar held in Amsterdam on the 27th and 28th of September. The event was attended by experts from all over the European Union and served as a great opportunity to learn more about the issue as well as share best practices.
Doing business in different contexts
Entrepreneurship occurs in many forms and environments and therefore we need to have flexible structures to support the many faces of migrant business activity.
For instance, the startup visa is perfect for innovative and tech savvy entrepreneurs who are in a rush to develop a product or service in a new market or are looking for the right commercial environment. In Holland for example these visas are issued to people from outside the European Union. The visa is valid for a maximum of one year and in this year, the newcomer is expected to produce or introduce an innovative new product or service under the guidance of an experienced facilitator. Finland also has the startup visa, it however requires the applicant to have an innovative business plan and access to resources before applying.
Startup entrepreneurship is still on a very small scale when it comes to the big picture. Most entrepreneurs represent small and medium sized businesses operating in traditional fields such as services, construction and trade. The average business owner is also well looked after in Holland; a newcomer applies for the self-employed or freelancer residence permit, submits a few documents and waits for up to 90 days for a decision. Finland too has a visa for those self-employed, however the processing times run anywhere from 9 to 15 months.
Both startup entrepreneurs and business owners are sometimes people coming from countries where the business structure is very informal, and a proper tax regime is nonexistent to begin with. Learning a new language, formalities, legislative questions, financing and opportunity costs can get overbearing; therefore at least our residence permit processes should be more straightforward.
The power of networks
I strongly believe that the key to fostering immigrant entrepreneurship lies in networks. All entrepreneurs benefit from social networks or capital, newcomers especially. Social events, coaching and peer mentoring for instance offer the opportunity to share best practices, and business opportunities with people who come from a similar background or have had the same experience. Social networks can also further provide informal support, risk sharing and sometimes even financial loans. Networks with strong know-how capital can also offer a lower threshold to learn about the formalities, legislative questions and taxation issues around owning a business. Investing in existing informal networks and helping to build new ones is a way to create social capital and empower immigrants to either start their entrepreneurial journey or take it to the next level.
The Finnish residence permit and integration system is still hampering the potential for immigrant entrepreneurship and integration in general. We have also fallen behind in the extent of diverse entrepreneurship and inclusive working environments; all this even though migrant entrepreneurship is on the rise (Uusyrityskeskus 2018). The startup visa, effective projects supporting migrant entrepreneurship and raised awareness are a step in the right direction, but we need more.
People will forever move from place A to B. Some because they are forced to, some because they want to and some for a reason in between the two. With the right measures and an inclusive strategy migrant entrepreneurship can be a great catalyst for the Finnish business environment. Let us start treating it as such. The future of entrepreneurship is all about raising the bar and leveling the playing field.