Immigration and entrepreneurship are two seemingly distinct, yet interrelated, socio-economic phenomenons.

The changing natures of commerce and human mobility continue to evolve per global trends and affairs.

In this article, I will investigate the link between immigration and entrepreneurship. The other key objective is to identify the influencing factors of the connection between immigration and entrepreneurship.

In doing so, I will first provide a brief historical outlook. Thereafter, I will evaluate the latter In light of the fundamental changes through technology and globalisation. Before proceeding further, it is beneficial to provide the readers with concise and separate historical overviews of immigration and entrepreneurship.

This enables this research to:

  • Highlight the key elements and historical context of both immigration and entrepreneurship, and;
  • Assess any existing relationship and its associated factors   

“Brief history on Immigration and Entrepreneurship”

Immigration: historical & contextual outlook

Migration theory

Understanding the correlation between immigration and any other socioeconomic phenomena demands a comprehension of human mobility and displacement in a historical context.

Immigration is a phenomenon that most of the global population is aware of in some shape or form. Besides, this is a trend that is unlikely to change in light of the anticipated prospective global migration landscape. 

Interestingly, the work of Rystad (1992), dated three decades ago, makes an exclusive reference to this argument. 

He states that global migration has to be regarded as a “permanent phenomenon” instead of a “temporary movement”. An interesting point that must be highlighted is that Rystad made this observation in 1992. Fast forward to over thirty years later and Rystad’s view continues to demonstrate its validity. 

Understanding a socioeconomic phenomenon such as migration demands an insight, however brief, into its existence through a historical lens.

It is unfortunate that the limited scope of this article does not allow for a sufficient analysis of migration history. However, the work of Manning (2013) provides a useful starting point. He highlights several key important historical events of human migration as well as their outcome for both the migrants and their destinations. For instance, in an ancient historical context, Manning (2013) refers to the mass migration of the speakers of Indo-European languages to Iran (known as “Persia” by then) and India. The importance of this event is the substantial cultural change in their destinations as a result of migration.

Furthermore, Manning’s work is highly relevant to this article as he categorises migration into four different types.

He divides migration into the following categories:

  1. Home-community migration: refers to human mobility within their home community.
  2. Colonization: the movement of people, often in a structured and systematic manner, to another community with the objective of replicating the latter. Notable instances include the colonization of the Americas and Australasia. 
  3. Whole-community migration: this category refers to the regular mobility of an entire community, as referred to by the author as “nomadic communities”. 
  4. Cross-community migration: the final category is essentially the applicable version of migration as we witness it in the present day. The reference of this category is to the movement of individual members or groups of one community to another

The fourth form of migration (cross-community) is perhaps the focal point of analysis. Nevertheless, it’s imperative to note that the author argues that most forms of migration have derived significant social, and technological changes in their destination communities (Manning, 2013; pp. 4-6). 

Why do people immigrate?

Lastly, understanding the incentives behind migration allows for a better comprehension of the correlation between immigration and entrepreneurship.

Therefore, I will refer to the work of Manning (2013; pp. 7-8) as in my view he offers a thorough categorisation of why humans migrate.

According to the author, voluntary human migration may be motivated by the following four factors:

  • Improvement of the migrant’s individual political, economic and/or social circumstances.
  • Migration for the betterment of the migrant’s immediate and extended family.
  • Samaritans which refer to the desire to contribute to the host society. 
  • Voyaging and cultural and personal awareness

From the aforementioned, it can be argued that, overall,  improvement of circumstances, self-transformation and risk are common elements.

What is entrepreneurship? 

Entrepreneurship is defined as: 

“the control and deployment of resources to create an innovative economic organisation (or network of organisations) for gain or growth under conditions of risk and uncertainty” (Dollinger, 2008; pp.9-10).

The aforementioned presents an accurate description of entrepreneurship as it acknowledges several key components that form the philosophy of entrepreneurship.

Thus, we may categorise its principal elements in the manner below:

  • Resources
  • Innovation
  • Organisational growth (profit)
  • Risk

“Entrepreneurship is the control and deployment of resources to create an innovative economic organisation (or network of organisations) for gain or growth under conditions of risk and uncertainty”

Dollinger, 2008

Analysis

Background & author’s note

Before proceeding to highlight external academic work and/or research, I would like to highlight a key point. 

Dollinger’s definition of entrepreneurship emphasises resources and risk. As the following sections of this research will focus on the “risk” element, there is a key gap in the existing literature. 

This gap is evident in the lack of reference to how migrant resources can be a driving factor in increasing migrant entrepreneurship rates. Per my personal experience, many migrants either have no resources (i.e. cash, liquid or physical assets) OR they have a fluidity of resources. For instance, prospective migrant is far more likely to convert their (physical) assets into cash for the purpose of immigration. The aforementioned demands extensive research and analysis which are beyond the limited scope of this research. Nonetheless, it is important to identify, acknowledge and further evaluate the “resource” factor of migration in the context of entrepreneurship. 

Immigration and entrepreneurship: the link

As the starting point of this, I will begin the analysis with a Harvard Business Review article by Vandor (2021). Vandor adopts the stance that immigrants are overall more entrepreneurial and more likely to start businesses. 

His work is valuable to this research as he draws his hypothesis using several studies. Moreover, he also examines the personal factors surrounding individual migrants. Thus, the aforementioned facilitate a better understanding of the link between employability and entrepreneurship.

First and foremost, it is useful to consider some studies concerning migrant entrepreneurship; notable statistics include:

  • In the US, immigrants form 20% ad 25% of the self-employed and startup founders respectively whilst forming less than 14% of the total population
  • Immigrants founded or co-founded 55% of the unicorns (i.e billion-dollar ventures), according to the National Foundation for American Policy (2018)

In a theoretical context, it was previously stated that “risk” is a mutual factor between pursuing entrepreneurship and migration.  

The statistics above also further support the idea that a direct link between entrepreneurship and migration is present. 

However, establishing the latter also begs the question of “how” they are relevant. Perhaps this is the vulnerability of the existing literature surrounding this topic. This is evident in Vandor’s rationale behind the link in question, as well as highlighting the differing viewpoints.

In reference to existing research, Vandor (2021) refers to issues such as employment discrimination and adverse policy effects. However, through a study conducted by himself, Vandor argues that the inclination to pursue either entrepreneurship and the decision to migrate share a common factor. This mutual element is the willingness to take risks. 

Remarks

As stated earlier, the scope of this research is limited. Thus, the key objective of this paper is to highlight some of the key arguments dominating the research surrounding migrant entrepreneurship. 

From an evaluation perspective, Vandor’s work is of significant value as it identities the personal factors associated with entrepreneurship and immigration. Furthermore, his work correlates the other research outlined in this article around entrepreneurship and migration in a historical context. 

Nevertheless, an academically beneficial point of investigation is the extent to which personal attributes affect migrants’ persuasion of entrepreneurship. Had the issues of labour marketplace discrimination and policy not affected migrants, how much of an impact would this have on the current trends?

REFERENCES

  • Dollinger, M.J. (2008) Entrepreneurship: Strategies and resources. 4th edn. Lombard, Illinois: MARSH PUBLICATIONS.
  • M. Low and J. MacMillan, “Entrepreneurship: Past Research and Future Challengers.” Journal of Management 14, 1988:139–161. 
  • Rystad, G. (1992). Immigration History and the Future of International Migration. International Migration Review, 26(4), pp.1168–1199. doi:10.1177/019791839202600405.
  • Manning, P. (2013). Migration in World History. 2nd ed. Oxon: Routledge. pp.1-15.
  • Vandor, P. (2021). Research: Why Immigrants Are More Likely to Become Entrepreneurs. [Online]. Harvard Business Review. Last Updated: August 04, 2021. Available at: https://hbr.org/2021/08/research-why-immigrants-are-more-likely-to-become-entrepreneurs [Accessed 25 November 2022].

*Copyright | All Rights Reserved | This work belongs exclusively to its author, Sohrab Vazir. Short sections of text may be quoted without explicit permission provided that full credit, including © notice, is given to the source.

Sohrab Vazir at NatWest Great British Entrepreneur Awards

About My name is Sohrab Vazir. I’m a UK-based entrepreneur and business consultant. At the age of 22, and while I was an international student (graduate), I started my own Property Technology (PropTech) business, StudyFlats. I did so by obtaining an endorsement from Newcastle University under the Tier 1 Graduate Entrepreneur Scheme (similar to the current Start-Up Visa). Subsequently, I obtained a further 3-year Tier 1 Entrepreneur Visa (which was replaced by the Innovator Visa). I grew my business to over 30 UK cities, and a team of four, and also obtained my Indefinite Leave to Remain (Settlement) in the UK. I now help other migrant entrepreneurs, such as myself, with their businesses, and mainly with obtaining endorsements from the endorsing bodies.