International migration continues to be a widespread phenomenon, rich and complex in its many forms and ways. Currently there are more than 232 million international migrants, and an increasing proportion of them is living in urban centres rather than rural areas. As such immigrant entrepreneurship also tends to be concentrated in urban areas. But while immigrants decide to become self-employed, they typically face many legal, cultural and linguistic obstacles to starting up, maintaining and expanding their business in their new home countries. Although many countries are realizing the potential of immigrants as a pool of entrepreneurs, they continue not to give immigrants the right to start businesses up under the same conditions as natives.
The European Commission has also publicly recognised the contribution of migrants to the economy in the European Agenda for the Integration of Third-Country National. Most recent data shows that the share of immigrant entrepreneurs has been steadily increasing in all of Europe. This means that in order to encourage the contributions of potential immigrant entrepreneurs, actors at the national and local level in many host countries' governments have to intensify their efforts to offer support to this specific group of the population. Access to credit for funding is, for example, a major barrier. Immigrants often do not have any or little savings or other securities as a basis for obtaining a credit. In addition, banks tend to be more selective with the granting of credits to immigrants. One key measure is to improve the successful use of microfinance. While in Belgium and the United Kingdom microfinance institutions have tended to allocate more loans to immigrants or ethnic minorities, in most other large European countries they have allocated less.
According to the World Migration Report 2015, while in some countries immigrants are much more likely to be self-employed than natives, the opposite is the case in other countries. This largely depends on the country context, the background of the migrants, and the opportunity structure in the country of destination.
The difference is the largest in the case of Greece, where 24.4 per cent of citizens are self-employed in contrast to only 6.5 per cent of non-citizens. The opposite is the case, for example, in the Czech Republic where 27.8 per cent of self-employment of noncitizens contrasts to the 15.1 per cent of citizens. Overall, it can be seen that immigrants are indeed over-represented among entrepreneurs in the Czech Republic, Poland, Hungary, the United Kingdom, Germany, Malta and Belgium. France, Spain, and Norway.
And in Italy? As in other European countries, the economic crisis has pushed many refugees to pick an area of passion or skill, and start a business. This is also why immigrants often face discrimination in the labour market, and as such entrepreneurship is their only means of generating an income.
According to the figures released by the Chamber of Commerce, Fondazione Leone Moressa, a research institute born in 2002 with the scope of studying the migrant population living in Italy, focusing on economic issues, shows that firms led by those born abroad totaled 656,000. Between 2010-2015, the percentage of immigrant-founded startups had increased to 20,4%. while those born in Italy fell by 6.9%. In particular extra EU entrepreneurs has increased by 24% since 2010.
The report also says that the self-employed foreign-born represent the 8,7% of the total number of national entrepreneurs, (about 7,6 million). Clear evidence that migration is not always concentrated in lower productivity sectors. Immigrant entrepreneurship has proved to make an enormous contribution to economic and social processes. Through their networks in home and host countries, immigrants are able to establish trade links across borders more easily than natives. They can utilize them for their own business by importing goods from abroad to sell or use for production.
Yet, an increasing number of immigrants start businesses in Northern Italy. In fact, they opened 16,000 new companies in the Lombardia Region. (+21%). The top three Italy immigrant entrepreneur nationalities are Morocco (11%), China (10%) and Romania (9,5%). And although, Italy stages a very high fragmentation of origins, the first ten nationalities of foreign born entrepreneurs represent about 68% of the total.
A research from the Migration Policy Institute an independent, non-partisan, non-profit think tank dedicated to the study of the movement of people worldwide, found that difficult access to financial services does sometimes have effects on the kinds of businesses that immigrant entrepreneurs open. They tend to be those where initial investments are lower, and as such the entry barrier is not as high. This includes sectors like construction, retail and catering. In Italy, Fondazione Leone Moressa shows that commerce is the most common type of business amongst non-Italian entrepreneurs. The other most represented sectors are construction (21%) and services to enterprises (14%).
Cover photo: Getty Sean Gallup