Coming full-circle: migrant and remigrant entrepreneurs

Inclusive Economy06 Oct 2014Gea Wijers

Entrepreneur’s activities involve discovering, evaluating and exploiting opportunities, yet extensive skills and knowledge are needed to turn opportunities into new products and services. Migrants and remigrants are especially likely to start their own businesses. But do migrant entrepreneurs have skills and knowledge that will allow them to respond to market niches in the host economy? And can remigrant entrepreneurs build on their experience in the foreign economy, to establish competitive SMEs at home?

Over the years we have started to see entrepreneurship as requiring a combination of individual assets and contextual opportunities. While the entrepreneur’s activities involve discovering, evaluating and exploiting these opportunities, skills and knowledge are needed to turn them into products and services that did not exist before. Entrepreneurship is not always such an open choice. Distinct circumstances can force people into entrepreneurship as it may be the only way to make a living in a hostile environment. This article will focus on migrants and remigrants who, as ‘outsiders’ in their host and home societies, are especially likely to seek a livelihood by starting their own businesses. The findings are partly based on my multisite research on Cambodian migrants and remigrants.

In 2009-2013 I collected data in Cambodian communities in France and the United States, and remigrants in Phnom Penh, Cambodia, on the reasons for their (re)migration and their perceptions on starting up entrepreneurial activities. My findings showed that both the highly educated and ‘successful’, as well as the ‘failed’ and unembedded, members of a diaspora group are most likely to return to their home country in cycles of circular migration (see Wijers 2013, and Agunias 2009, Tsuda 2009 and Davids and Van Houte 2008). Due to the ad hoc nature of this circular migration and local practices, neither the French, American or Cambodian governments maintain any overall statistics on the scale, frequency and impact of these circular migrations. The short examples in the discussion below are therefore drawn from my case studies and the literature.

Besides the lack of reliable statistics on the impact of migrant entrepreneurship, empirical findings on the impact of returnees’ activities in multiple countries are rarely conclusive and consistent in describing their contributions. For instance, findings demonstrate dramatically different outcomes for Turkish German, Cambodian American and Congolese Belgian remigrant entrepreneurs. Some are welcomed, included and accepted, while others are scorned, discriminated against and expelled, depending on factors such as institutional infrastructures, the geopolitical positions of their host or home country, or conflict histories (see, for example, the findings of the CIDIN, Radboud University Nijmegen and AMIDSt project on return migration in six countries).

How can a ‘forced’ entrepreneur create opportunities? Migrant entrepreneurs may be considered pioneers in exploring market niches that local entrepreneurs would not consider. They leave their home countries to resettle in a new environment where they face a number of challenges. They have to reinvent themselves, become embedded in local social networks, and make the most of their human capital. They need to find ways to make a living and send money home, and they may have to hide their former identities.

When these migrant entrepreneurs, induced by success or failure, return home for the long or short term after working in a foreign economy, they become remigrants, equipped with a combination of local cultural knowledge and the specific entrepreneurial skills they gained in their host countries. The question is, however, do they really ‘return’? What do they return to? Or, rather, are they suddenly ‘strangers in a strange land’ that does not recognize them as natives. For example, my respondent Mr. Im started organizing paid technical internships for Cambodian students at French companies while he was working at the University of Montpellier. Retaining his French citizenship, he would spend at least three months a year in Phnom Penh running a self-sufficient school that trained electricians to work on commercial projects. In reality, he spent almost four months a year in Cambodia and did a lot of networking for his projects there during his return visits to France, but officially he was not a remigrant. His transnational resources turned Mr. Im’s enterprise into a success and he made a significant contribution to sustainable SMEs in Cambodia.

For a host economy, migrant entrepreneurs often lack the capacity, ambition or resources to grow beyond a micro or small business. Their ‘forced’ enterprises often remain family businesses focused on relatively small target groups of fellow migrants and making use of the limited opportunities available to them, without making a significant impact on local markets. When it comes to contributing to sustainable economic growth, migrant entrepreneurship therefore seem to produce mixed results in host country economies. Research has shown, for example, that their activities make little impact on the host country’s labour market as, in the short term, migrant entrepreneurs often call on their family members to share the running of a business. Moreover, migrant entrepreneurs often have little capacity for investment, which restricts their businesses’ long-term growth. On an individual level, migrant entrepreneurs mostly seem to remain in their own ethnic circle, which does not promote their cultural and social integration into the host country (see Portes 1995; Waldinger, Ward, Aldrich and Stanfield 1990; Hassoun and Tan 1986 and others). As migrants’ overriding ambition seems to be to provide a better life for their children, the second generation, their enterprises are not intended to grow into more than a family business (See Rumbaut and Portes 2001; Zhou 2006 and others).

Theoretically, many positive characteristics are attributed to remigrant entrepreneurship. In emergent nations they could instigate frugal innovation and advanced collaboration by thinking globally while acting locally. As brokers between two cultures, remigrant entrepreneurs can make the most of their transnational social networks, advanced skillsets and higher level education by starting their own businesses. When they return to their home countries, they add value by bringing skills sets and experiences, social and human capital that they could not have obtained in their home economies. While it thus seems obvious for remigrants to make significant contributions to their home economy, in many cases this depends on their ability to (re)find social legitimacy. Mister Im, for example, could only be effective in his technical school venture because he was a former supporter of the Khmer Rouge and a minister in the pre-conflict government. With established connections and a following that still admires his past achievements and affiliations he had the social power to make change happen. On a personal level, the dynamics of entrepreneurship may help remigrants to re-embed and achieve reconciliation in their former homelands. But finding social legitimacy is key to achieving all these win-wins. For Cambodian remigrants this meant learning how to deal with a restrictive regime and navigating the political landscape in order to build trust and new social capital.

Within a research field still delivering ‘mixed findings’, I have discussed ways in which migrant entrepreneurship can be considered ‘forced’ entrepreneurship on the basis of my research among Cambodian remigrant entrepreneurs. In the debate on sustainable growth and job creation in SMEs in developing countries it is therefore timely that several large projects, which bring together our knowledge on different groups of returnee entrepreneurs, are now about to receive or have received funding from European and governmental donors. These include the collaborative project on Transnational Diaspora Entrepreneurship as a development link between home and residence countries (European funding) and the SPARK project on returnee entrepreneurship (governmental funding). We need to start looking at migrant entrepreneurship as a multisite, transnational activity situated in distinct institutional contexts. If we link our information on their entrepreneurial activities in host and in home countries in order to find ways to realize their potential, returnee entrepreneurs may be able to make more significant contributions to both host and home economies.