Presentation by Josep Mestres Domenech (OECD, Directorate for Employment, Labour and Social Affairs International Migration Division) on the occasion of the SOC section hearing on Migrant entrepreneurs’ contribution to the EU economy on 24.11.2011 in the framework of the Permanent Study Group on Immigration and Integration.

1. Migrant Entrepreneurship in OECD
Countries
European Economic and Social Committee
Brussels, 24 November 2011
Josep Mestres Domenech
OECD Directorate for Employment, Labour
and Social Affairs
International Migration Division

2. Outline
1. Introduction
2. Migrant Entrepreneurship in OECD Countries
1. Extent of Migrant Entrepreneurship
2. Profile of Migrant Entrepreneurs
3. Contribution to Employment
4. Factors Behind a Migrant’s Entrepreneurship
Decision
3. Policies in OECD countries to manage the
migration of foreign entrepreneurs and investors
4. Concluding Remarks

3. 1.Introduction
• OECD work on Migrant Entrepreneurship:
– Conference on Migrant Entrepreneurship (2010)
– Publication “Open for Business: Migrant
Entrepreneurship in OECD countries” (2010)
– Special chapter in “International Migration Outlook”
(2011)
• Objective: analyse migrant entrepreneurship in a cross-
country comparative framework including its
contribution to employment.
• Definition: Migrant entrepreneur
• Data: Labour Force Surveys (LFS) (Eurostat LFS, US
CPS, National LFS)

4. 2. Migrant Entrepreneurship in OECD countries
2.1. Extent of Migrant Entrepreneurship
Share of Self-Employment in Total Employment, 2007-2008, percentage.
Foreign-Born Native-Born
30%
25%
20%
15%
10%
5%
0%

5. Dynamic measures of entrepreneurship
• There has been an increase in the number of new
migrant entrepreneurs during 1998-2008.
Average yearly number of new foreign-born
entrepreneurs
1998-2000 2001-2003 2004-2006 2007-2008
France 29 000 35 000 38 000 35 000
Germany 49 000 55 000 88 000 103 000
Italy 6 000 12 000 36 000 46 000
Netherlands 7 000 .. 8 000 11 000
Portugal 4 000 4 000 5 000 7 000
Spain 13 000 27 000 42 000 77 000
Sweden 2 000 3 000 3 000 5 000
United Kingdom 45 000 55 000 62 000 88 000
• Migrant entrepreneurs create more new
businesses in relative terms than natives
• However, these businesses have lower survival
rates.

6. 2.2. A Profile of Migrant Entrepreneurs
• Migrant entrepreneurs are older and have stayed
longer in the host country than migrant wage
and salary workers (but they are younger than
their native counterparts).
• They are, on average,
– More educated than their native counterparts and
than migrant wage employees;
– Have mostly managerial occupations;
– Work in a wide range of sectors, not just ethnic
businesses ->

7. 10 Main Activity Sectors of the Self-Employed (NACE) in
Europe by Place of Birth, EU LFS, 2008.
Self-employed foreign-born Self-employed native-born
Wage employment foreign-born Wage employment native-born
25
20
15
10
5
0
Wholesale and Construction Accomodation Professional, Human health Manufacturing Administrative Transport and Repair Information
retail trade and food scientific and and social work and support storage ohousehold and
services technical service goods and communication
activities service
activities

8. Migrants from different regions of origin have different
propensities to become entrepreneurs
• Migrant Entrepreneurs of Asian origin have the highest
propensities to become entrepreneurs, those of Latin-
American and African origin the lowest.
Percentage of migrant self-employed by region of origin, 2007-2008
Latin America and Caribbean Africa EU27 Other Europe Asia Native-born
30
25
20
15
10
5
0

9. 2.3. Contribution of Migrants to Employment Creation
• Migrant businesses are on average smaller than
their native counterparts.
• Their overall contribution to employment has been
increasing over time in most OECD countries.
• Migrant entrepreneurs employ on average 2.4% of
the total employed population in OECD countries.
• Every self-employed migrant creates on average
between 1.4 and 2.1 additional jobs (compared to
between 1.8 and 2.8 for natives).

10. Average Number of Jobs Created by Each Foreign- and Native-Born
Self-Employed for Firms Under 50 employees, 1998-2008.
Average
Foreign-Born Native-Born Number Jobs
Min Max Min Max Ratio FB/NB
Czech Republic 1.9 3.1 1.3 2.1 146%
United Kingdom 1.5 2.6 1.3 2.1 120%
Slovak Republic 1.3 1.7 1.1 1.6 112%
Hungary 1.8 2.6 1.6 2.5 108%
Portugal 1.6 2.4 1.7 2.5 96%
Ireland 0.9 1.4 1.0 1.5 93%
Poland 1.5 2.4 1.8 2.7 90%
Spain 1.1 1.5 1.2 1.9 81%
Norway 0.7 0.9 0.8 1.2 79%
France 1.3 1.9 1.7 2.6 77%
OECD Average 1.4 2.1 1.8 2.8 77%
Belgium 1.2 1.7 1.5 2.3 76%
Greece 0.8 1.0 1.1 1.5 69%
Switzerland 2.3 3.3 3.1 5.2 68%
Luxembourg 2.1 3.1 3.0 4.9 65%
Germany 1.8 2.5 2.6 4.0 64%
Netherlands 1.4 2.2 2.0 3.5 63%
Italy 1.1 1.4 1.7 2.4 62%
Austria 1.6 1.9 2.5 3.5 59%
Sweden 1.4 1.9 2.3 3.6 56%
Denmark 1.8 2.5 3.0 4.8 55%
Source: Eurostat LFS Survey 1998-2008.

11. Employment Creation by Self-Employed Foreign-Born
Persons employed in firms of Share of employment in firms of all
immigrant entrepreneurs entrepreneurs
1998-2000 2001-2003 2004-2006 2007-2008 1998-2000 2001-2003 2004-2006 2007-2008
Thousands Per cent
Austria 52 54 59 73 7.8 8.3 7.3 8.5
Belgium 74 94 107 100 15.7 11.8 10.2 9.2
Czech Republic .. 45 50 72 .. 3.7 4.0 5.3
Denmark 11 24 27 50 1.6 3.5 4.3 7.4
France 396 475 309 382 12.6 11.7 10.3 12.8
Germany 529 593 664 757 5.9 6.8 7.5 7.7
Greece 21 31 34 41 2.1 2.9 3.0 3.4
Hungary 7 23 34 33 1.8 3.4 3.3 3.9
Ireland .. 28 49 79 .. 8.0 9.5 20.5
Italy 41 95 190 282 0.4 0.9 2.7 4.1
Luxembourg 10 12 11 14 22.5 36.8 34.9 41.0
Netherlands 71 36 121 115 5.1 7.6 7.4 6.3
Norway 4 8 8 14 3.7 10.3 10.2 11.2
Poland .. .. 15 56 .. .. 0.6 2.0
Portugal 57 71 79 61 4.7 5.5 6.3 5.7
Slovak Republic .. 1 8 3 .. 0.1 0.4 0.2
Spain 131 201 185 487 4.0 5.9 6.3 8.8
Sweden 46 61 76 84 6.0 8.1 9.4 10.7
Switzerland .. 228 315 243 .. 20.8 20.2 19.2
United Kingdom 579 667 621 530 12.3 14.3 13.1 10.9
Source: Eurostat LFS Survey 1998-2008. Employment by Self-Employed Foreign-Born Entrepreneurs is the estimated
minimum number of individuals employed in a firm owned by a foreign-born self-employed. Ratio of Employment
created by Self-Employed Foreign-Born Entrepreneurs is the ratio between the estimated minimum number of
individuals employed in a firm owned by a foreign-born self-employed divided by the total population employed by
native- and foreign-born self-employed.

12. 2.4. Factors Behind Migrants’ Entrepreneurship
• Higher (Lower) Propensity of Entrepreneurship of
Migrants in USA,UK and France (in Spain)
• Estimation on how each individual factor is related to
self-employment
• Greater Credit Constraints for Migrants
• Years in Host-Country affect S.-E. propensity
• Different Propensities by Region of Origin
• Entrepreneurship can be a strategy to move out of a low-
wage job or a discrimination situation into paid
employment
• Or a way to overcome difficulties in finding wage and
salary employment
• Migrants are less likely to become self-employed after being
unemployed (than natives)

13. 3. Policies for Foreign Entrepreneurs and Investors
• Most OECD countries have adopted specific
migration policies to regulate the entry and stay of
foreign entrepreneurs and investors
• Objectives:
o To select immigration candidates with plans to
start or invest in businesses according to their
capacity to meet the country’s economic needs
o To attract immigrant entrepreneurs and
investors likely to contribute to the host
country’s economic growth and encourage them
to settle in the country

14. OECD countries with specific migration policies for foreign entrepreneurs
Settlement countries were Some countries that introduced
first: those policies more recently:
Canada 1969, 1978, 1986 Germany, Greece 2005
Australia 1976 Portugal 2007
USA 1990 Switzerland 2008
New Zealand 1999 France 2009
Korea 2010
Some OECD countries have specific entry categories for foreign
investors (Australia, Canada, Greece, Korea, New Zealand);
while other have same entry category as entrepreneurs (France, Ireland,
Japan, Mexico, Poland).

15. Selection criteria for immigrant entrepreneurs
Selecting immigration candidates with plans to start or
invest in businesses according to their capacity to meet the
country’s economic needs based on:
• the Candidate: • the Business Plan:
- Previous experience in managing - Capital to be invested
a business/investment
- Number of jobs to be created/preserved
- Financial assets
- Organisation of the business
- Language proficiency
- Market potential
- Educational level
- Added value in terms of innovation
- Age
- Potential benefit to the host country
- Health requirements labour market and economic growth
Definitions and relative weight of each criterion vary
between countries

16. Example Eligibility criteria for immigrant investors
Minimum amount of capital to be invested
Source: OECD (2010)

17. Supporting immigrant entrepreneurs
• Specific assistance in administrative procedures
required for the establishment of the business
provided by various professional or government
bodies (Spain, etc.)
• Training, guidance, mentoring and network
building to enhance the development of their
businesses (Denmark, Finland, Norway, Sweden)
• Measures to facilitate access to credit for
immigrant entrepreneurs (Denmark, Sweden)

18. Relative role of specific admission policies
Only a fraction of migrant entrepreneurs used
specific entry routes designed for them:
Average annual
Average annual
number of
number of new
Period special visas
migrant
issued to foreign
entrepreneurs
entrepreneurs
Germany 2006-2008 103 000 2 964
Spain 2004-2008 59 000 658
Italy 1998-2008 23 000 4 745
Netherlands 2005-2008 10 000 88
Belgium 1999-2008 5 000 927
Sweden 2002-2008 4 000 66
Sources: Average annual number of new migrant entrepreneurs: own estimates using EU Labour Force Survey; Average annual
numbers of special visas issued to foreign entrepreneurs calculated on the basis of administrative data provided by national
authorities.

19. 4. Concluding Remarks
• In OECD countries, average entrepreneurship rates between
immigrants and natives differ slightly (12.6% versus 12.0%).
• Migrant entrepreneurs’ contribution to employment
creation is substantial.
• Their activities go beyond traditional ethnic businesses, into
a wide range of sectors and innovative areas.
• Migrant entrepreneurs are more likely to start a business
than natives in most OECD countries although the survival
rate of migrant businesses is often lower
• Migration policies are not sufficient in themselves to attract
migrant entrepreneurs and investors
• Other factors play a major role, including general economic
and fiscal policies.

20. • Thank you for your attention!
OECD (2010): “Open for Business:
Migrant Entrepreneurship in OECD
countries”, OECD Publishing.
For further information on the
OECD’s work on migration:
www.oecd.org/migration