One of the key pillars of the Kauffman Foundation’s ‘America’s New Business Plan’ is access to opportunity. While entrepreneurship is proven path to individual empowerment and prosperity, systemic barriers hold many people back, not least refugees. And the global refugee crisis shows no signs of slowing. By the end of 2022, an estimated 103 million people globally were displaced, including 32.5 million refugees.
While every refugee’s experience is different, they all share the virtues of courage, resilience and determination – key traits required by any entrepreneur. Many are naturally entrepreneurial and have run successful businesses before having to flee. For others, the experience of escaping from their home country, enduring refugee camps and persevering through the asylum process intensifies their entrepreneurial capabilities and pushes them towards self-employment. Many studies have shown that migrants are more entrepreneurial than the wider population; a Harvard Business School study has also shown that migrant-founded companies perform better in employment growth, growth rate, and survival rate compared to average.
But starting a business is never easy, especially in a new, unfamiliar country. In recent years, nonprofit ‘refugee entrepreneurship programs’ have expanded around the world to provide tailored business support. What started as corporate and philanthropic-funded initiatives are now attracting the attention of governments as they seek to embed entrepreneurship as part of wider refugee integration strategies.
In the UK, a government-backed pilot operating across six cities proved the impact of such programs - boosting refugees’ skills, confidence, experience, networks, and access to finance. The one-year $425,000 (USD) pilot led to self-employment being added as an outcome in a larger $16.5 million Refugee Transitions Outcome Fund (RTOF) pilot that is now helping local governments provide housing and economic integration support to refugees across the UK. RTOF incentivizes delivery bodies to treat self-employment equally to employment, rewarding them based on refugee entrepreneurs achieving business formation and sustained income targets. The fund also allows delivery bodies to help refugees into part-time employment while also helping them start a business - reflecting a key finding of the pilot that refugees need income while working though a longer-than-usual business formation process.
In the US, the Office for Refugee Resettlement (ORR) Microenterprise Development Program (MED) helps refugees develop, expand or maintain their own businesses through grants, loans, training and technical assistance. MED also builds organizational capacity to provide culturally and linguistically appropriate services to refugee entrepreneurs. The program launched in 1991, supporting community-based organizations with lending experience to assist previously financially excluded refugees. Refugees who are not yet citizens and who have been in the U.S. for no more than five years may participate in the program.
MED awards circa $5 million per year to organizations operating across 20 States. Organizations leverage the ORR grant to receive funding from other micro enterprise development programs, including from the U.S. Small Business Administration and the U.S. Treasury. In 2019, MED programs provided 551 loans to refugee entrepreneurs and businesses supported by the program contributed 1,055 jobs to the U.S. economy. At a city-level, as an example, the MED program in Phoenix, Arizona had helped over 160 small businesses by 2018, and continues to publish a directory of local refugee-owned businesses. Overall, the MED program is well regarded and there are calls to increase its funding and scale.
Increasing reports now highlight that policy engagement - both integrating funding for these programs into wider integration efforts, and tackling underlying systemic barriers facing refugee entrepreneurs - is the most underdeveloped domain within entrepreneurship ecosystems globally, severely constraining the ability of refugee entrepreneurs. This is an opportunity that local, state and federal governments can action.
Since 2018, the Centre for Entrepreneurs has convened refugee entrepreneurship programs, funders, researchers and policymakers across 30 countries under the CFE Refugee Entrepreneurship Network. We know what works; we are coordinating monitoring and evaluation between academics, funders and practitioners; and we are mobilising ever-more corporates and foundations to get involved. We invite policymakers globally - at city, region or national levels - to join us to help newcomer entrepreneurs in your communities to thrive.