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Why entrepreneurship is important?

After considerable efforts on primary integration issues such as learning the host country’s language, starting a new social life, finding employment, etc., a more demanding and higher risk step could lead to migrants running their own shops or businesses. Preparing pathways towards migrant entrepreneurship based on an individual’s self-confidence and self-esteem to be able “to make it” is a very demanding step for volunteers who foster migrant integration, but it can be one of the most rewarding experiences.

Entrepreneurship is defined as an act of pursuing opportunities and ides and transforming them into value for others. As a transversal competence, entrepreneurship can be relevant to all individuals coming from a broad range of educational backgrounds, occupations and sectors. The promotion of entrepreneurship is incorporated in the Europe 2020 Strategy which aims to create the conditions for “smart, sustainable, and inclusive growth”. Within this framework, the Entrepreneurship 2020 Action Plan includes a commitment to facilitate entrepreneurship among migrants who are already residing in the EU. There is a consensus that through migrants’ participation in the labour market (as entrepreneurs or not) they can add value to society in their adopted country (European Commission_1, 2016).

Though this seems to be a promising pathway to follow, migrant entrepreneurship can be a complex process. It may be best suited for migrants and refugees who ran their own business in their country of origin and who thus possess entrepreneurial experience. It may also be suitable for young, creative migrants and refugees who show the talent to turn an idea into a small start-up project. Besides, there is a reality that migrants might face some specific difficulties when it comes to starting up a business in their host country: According to European Commission (2016), migrant entrepreneurs tend to experience more barriers to set up a business than native entrepreneurs. According to recent research conducted within the context of an EU Project (Migrapreneurs, 2017) the barriers commonly faced by migrant entrepreneurs were found to be:

  • Institutional barriers; migrants are generally unfamiliar with the business and the regulatory environment, business setup procedures, commercial transactions, etc.
  • Access to finance; newly migrated entrepreneurs often struggle to secure finance from banks, which require a credit history and being familiar with the formal banking system in the host country.
  • Cultural constraints; these can be difficulties related to language and traditions in the host country. Being literate and fluent in the language as well as familiarity with the local culture are essential.
  • Lack of entrepreneurial skills and competences; the business environment requires high levels of entrepreneurial and business management skills. Lack of these skills can be challenging for migrants who have no experience in self-employment, even if they have the characteristics and motivation to start their own business.

Entrepreneurship as a Competence

Having the right ‘skills’[1] and ‘competences’[2] are key for the success of an entrepreneurial journey for any individual, including migrants and refugees. In a fast-changing global economy, skills will to a great extend determine competitiveness and the capacity to drive innovation. The digital transformation of the economy is re-shaping the way people work and do business. New ways of working are affecting the types of skills and competences needed, including innovation and entrepreneurship (European Commission_2, 2016).

Formal education and training systems are also evolving to respond to the growing need to have transversal skills and competencies, including entrepreneurship. Although there are those who contend that being an entrepreneur is more a talent or an innate characteristic (Harkema and Popescu, 2015), the consensus is that it is a competency which can be acquired and learned. With the growing importance of entrepreneurship and a consensus that it can be taught, some of the member states have taken steps to incorporate it in educational curricula, but this has not always been done consistently because of the uncertainty on what the distinctive elements of entrepreneurship as a competence are.

To promote a shared understanding of entrepreneurship competence, there have been many initiatives taken and much research done. One piece of research, conducted with the participation of 150 individuals entrepreneurial experience and with a purpose of defining the characteristics and competences of new age (innovative) entrepreneurs (INNOGROW, 2016), revealed that successful entrepreneurs have many things in common which should be considered before a person with entrepreneurial intentions follows this path. The research suggests that, a strong educational background and prior work experience is needed to be successful in innovative sectors. Successful entrepreneurs’ common traits are that they are determined, curious, cooperative, passionate and proactive. They are mostly motivated by the need for achievement, financial security and flexible working conditions. Communication and continuous learning are distinctive skills and they have 5 core competences which have developed through a combination of education/training and experience;

  • Creative thinking
  • Problem solving
  • Leadership/motivation/team management
  • Innovation management
  • Strategic planning

In their research (Mitchelmore and Rowley, 2010) with attempted to create an entrepreneurial competency framework; the entrepreneurial competences were listed as;

  • Identification and definition of a viable market niche
  • Development of products of services appropriate to the firms chosen market niche/product innovation
  • Idea generation
  • Environmental scanning
  • Recognising and envisioning taking advantage of opportunities
  • Formulating strategies for taking advantage of opportunities

Although similar to the INNOGROW model mentioned previously, this framework is lacking other managerial and organisational skills. Having only the entrepreneurial competences above would not be enough for business success.

A more inclusive and complementary framework was developed by the European Commission in 2016: Entrepreneurship Competence Framework (EntreComp). This model defines and elaborates entrepreneurship as a competence which applies to all spheres of life, from nurturing personal development, through actively participating in society (re)entering the job market as an employee or as a self-employed person and also to starting up ventures (cultural, social or commercial). Entrepreneurship competences not only address the activities related to setting up a business, but also becoming intrapreneurial by taking important initiatives within an established organisation. 

The Entrecomp framework defines entrepreneurship competences under 3 areas that directly mirror the definition of entrepreneurship as the ability to turn ideas into action that generate value for someone other than oneself; and 15 competences that, together, make up the building blocks of the entrepreneurship as a competence for all citizens. The model below represents the competence framework:

 

Figure: EntreComp Conceptual Model

All the competences given in the model are equally important and there is no sequence in the acquisition process or a hierarchy. A person with entrepreneurial intent should possess all the competences in the model as they are complementary to each other. For example, having the ability to screen and spot opportunities and create ideas to follow, motivation, the ability to mobilise resources in order to bring the ideas to fruition and, for a sustainable endeavour, the need to achieve a higher, more complex level of competences such as planning, risk management, team management, etc.

Developed by MAKRO within the context of MAV – ‘Multidimensional Training of Adult Volunteers to Foster Migrants’ Integration’ Project.

You can continue reading the second part; Implications on entrepreneurial learning of adult migrants.

 

[1] The term ‘skills‘ is used to refer broadly to what a person knows, understands and can do. (European Commission_2, 2016)

[2] The term ‘competence’ is described as an underlying characteristic of a person which results in effective action and/or superior performance in a job or occupational area. (Mitchelmore and Rowley 2010)

 

Resources  

European Commission_1, 2016, Evaluation and Analysis of Good Practices in Promoting and Supporting Migrant Entrepreneurship – Guide Book

European Commission_2, 2016, A New Skills Agenda for Europe – Working together to strengthen human capital, employability and competitiveness

European Commission_3, 2016, EntreComp: The Entrepreneurship Competence Framework

Harkema, S. and Popescu, F., 2015, Entrepreneurship education for adults: a case study, Procedia – Social and Behavioural Sciences 209 (2015) 213 – 220

INNOGROW, 2016, Competency Profile of an Innovative Entrepreneur (link to document)

Migrapreneurs, 2017, European Research Report on Training Needs of Highly Skilled Migrants in Entrepreneurship (link to document)

Mitchelmore, S. and Rowley, J., 2010, Entrepreneurial competencies: a literature review and development agenda, International Journal of Entrepreneurial Behavior & Research, Vol. 16 Issue: 2, 92-111

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