Refugees pouring into Europe from Africa and the Middle East have arguably created the greatest crisis for the “European Experiment” since it began after World War II. People are wringing their hands or shaking their fists: What to do about the millions of migrants and refugees crossing seas and borders into the West? What to do about the million asylum applications to Europe?
One way to help stem further migration and to gain maximum benefit from those already in Europe is to promote entrepreneurship as a job-creating tool. This solution has largely been overlooked. But joblessness and general economic insecurity are one of the primary reasons that people destabilized by war or local chaos finally decide to flee. And jobs are the first thing they need when they arrive in their new homes.
Entrepreneurship is the proven primary job creator in economies large and small. According to the Ewing Marion Kauffman Foundation, America’s leading entrepreneurship think tank, young companies (including startups)—not old ones–are what matters for job creation. Kauffman research has shown that in some years (1985-2005), young firms have been responsible for as much as two-thirds of new American jobs.
The idea of making a business climate more attractive is not new. Governments have long invested in specific industries, offered tax holidays, and rolled out other policies to attract companies to particular regions with the goal of creating jobs and growing the tax base. But promoting entrepreneurship is a slightly different thing. It requires bolstering an ecosystem of activities and players to help startups grow into job-creating firms.
In my book Peace through Entrepreneurship, I wrote about six activities and six players that can increase entrepreneurship activity. I call this the Six+Six Model for entrepreneurship ecosystem development. The six activities are: 1) Identify entrepreneurs (through things like business plan competitions); 2) Train entrepreneurs (both in schools but also in increasingly common startup training programs like the StartUp Institute and General Assembly); 3) Connect and sustain entrepreneurs (through meet-ups or entrepreneur organizations, as well as incubators, accelerators, and maker and co-working spaces); 4) Fund entrepreneurs (from starting or increasing angel investor group activity to helping catalyze and launch new venture funds); 5) Enable public policy that supports entrepreneurs (such as improving intellectual property protection and ease of doing business, or managing regulatory burdens); and 6) Celebrate entrepreneurs (by telling their stories in all forms of media) to increase cultural support for entrepreneurship.
The six players or organizations that need to be involved in these programs are 1) corporations, 2) foundations, 3) universities, 4) non-government organizations, 5) investors and 6) government.
If job creation is the primary policy goal, then all forms of entrepreneurship need to be explored. All too often, entrepreneurship is equated with technology startups. But it is much more than that. Entrepreneurship promotion is not about creating “the Silicon Valley of X,” but rather understanding the unique characteristics of a geography or population in order to tailor programs to local circumstances. These include “no tech” and “low tech” options, as well as “high tech” breakthroughs. In fact, in developing countries no tech and low tech startups actually usually create more jobs than high tech startups (think Starbucks or IKEA vs Google or Apple).
Any Americans, British, and Europeans who are apprehensive about low-skilled immigrants pouring into their cities, should take heart in the stabilizing force of job creation. An employed society is a stable society, while joblessness — more than cultural incompatibility – is at the crux of what many in the West fear migrants will bring: unrest, destruction of a “way of life,” violence.
A scan of the research reveals that the Middle East & North Africa region is home to the world’s highest youth unemployment rates (exceeding 40 percent in parts); that the corresponding figures in some European immigrant quarters (like Molenbeek in Belgium) is just as high; that, in some trouble spots, 50% of young adults who join rebel movements do so because they can’t find a job; that “Arab revolutions . . . were fueled by poverty, unemployment, and lack of economic opportunity.”
Entrepreneurship generates precisely such economic opportunity; new businesses create employment and new opportunities for investors. Europe, it turns out, is actually a leader in combating joblessness and economic dismay in difficult places. While the U.S. remains iconic for its innovation and entrepreneurial culture, its foreign aid apparatus devotes a mere 1% of its spending to entrepreneurship programming (according to my own calculations and those of the Aspen Network of Development Entrepreneurs). Europe, on the other hand, led by Germany, the Netherlands, and Sweden, spends a higher proportion of its international development funds supporting entrepreneurial and pro-business projects in developing countries. Be it skills training, R&D grants, or startup incubators, Europe has experience developing entrepreneurship ecosystems in Africa, Asia, and elsewhere, including the very places immigrants are fleeing. Of course, while Europe spends more than the U.S., the total spending on entrepreneurship promotion in developing countries is still miniscule. Ratcheting up such programming in the key places from which emigration is flowing would be a smart policy move.
Entrepreneurship can be promoted at home too, and these programs would cost much less than other options—certainly less than border fences, inhumane policing, and, worst of all, war. Entrepreneurship also has the advantage of nurturing that most desirable – if ever elusive – European dream: Integration. Entrepreneurs tend to be like-minded folks who get along with one another because they value innovation, product development, and business over social and political differences. Entrepreneurship knows no borders, connecting young Arabs and Israelis, Sunnis and Shias, Russians and Ukrainians, Irish Catholics and Protestants, as well as immigrants and the native-born.
Entrepreneurship, therefore, could be the bulwark against the astronomical rates of unemployment afflicting several EU countries (especially Spain, Italy and Greece) that have contributed to the euro’s travails, to rising populist movements, and to other signs of deterioration in unity roiling the continent.
We know what a disunited Europe looks like. It’s what led to continent-wide wars at least every 30 years for the past 1,000 years. The Marshall Plan, the Common Market, the European Union, the Maastricht Treaty, the Schengen agreements, the euro – for the past 70 years, these have been Europe’s best strategy to preserve peace. Though less “institutional” than its predecessors, entrepreneurship as a European policy would be in the same spirit of using economic solutions to fight political problems. The secret weapon both for stemming the flow of migrants as well as deriving the maximum benefit for the more than one million migrants already in Europe may be as simple as boosting entrepreneurship to provide jobs.
