Refugee entrepreneurship in the Netherlands

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Refugee Entrepreneurship in the

Netherlands

Nima Moradi

11429925

MSc Entrepreneurship

Prof. Mr. L. Zhao

July 1

st

, 2017

2

nd

Reader: Dr. Y. Engel

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Preface

This dissertation is submitted for the degree of MSc in the field of Entrepreneurship of the Business Administration department in 2017 at the Vrije Universiteit and Universiteit van Amsterdam. The conducted research was done under the supervision of professor Mr. L. Zhao, to whom I would like to extend my gratitude for his guidance throughout this process. The research is based on interviews and theories retrieved from existing articles and books. The basis thereof is articles related to Refugees, Entrepreneurship, and Immigrants and their integration in Western Societies. The conducted writing is to my best of knowledge original, with exceptions of parts where acknowledgements and references to other authors and their original work are made. Neither this dissertation or a part of it has been submitted for any other use such as other degrees, universities, or other qualifications. The copyright of lies with the author, as does the full responsibility for the content including possible mistakes. Both universities (Vrije Universiteit & Universiteit van Amsterdam) cannot be held liable for the content of the author’s dissertation.

Nima Moradi

July 1st 2017.

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Abstract

The perception of the Western societies in regards to the integration of refugees is often problematic and seen as a challenge to overcome. One of the misconceptions is that refugees will by default only cost a country and society money, without paying this back to their economy. The most common line of thought is that the refugees will sooner or later work in any field regardless of their background. The possibility of Refugee Entrepreneurship is oftentimes overlooked. Entrepreneurship among refugees should be promoted, as this adds value to venture creation and economy of the country, while simultaneously improving the integration of the refugees. Becoming an Entrepreneur as a refugee is however challenging as they face obstacles in the process. By interviewing (Aspiring) Refugee Entrepreneurs and institutions in the Netherlands, insights regarding to the different obstacles are provided and help create a better understanding of the barriers while aiding in the creation of the solution. It seems that Aspiring Refugee Entrepreneurs face more challenges and barriers in becoming an Entrepreneur. These barriers include the lack of capital, social network, Dutch language and institutional challenges.

Keywords: Refugee, Entrepreneurship, Netherlands.

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Introduction

As from 2013, the number of refugees that have entered the Netherlands has increased, resulting in 116,587 Asylum seekers in 2015 of which 88,536 are refugees as recognized under the 1951 Convention relating to the Status of Refugees. Making 2015 the year with the highest number of refugees since 2006. Although this number is still lower than at the beginning years of this millennium, an upward trend is visible. (UNHCR, 2017)

While the refugees leave behind their troubled past to some extent, the challenges that await them in their (possible) new countries are often viewed troublesome, by both the refugees and the native population. The integration of refugees within the new society is viewed as a reason for concerns by the native population. Their presence is oftentimes seen as a burden to society as they will need to be tended to which brings with costs.

The refugees on their turn face difficulties in their new environments including finding a suitable job and being able to provide for themselves. By already starting in a disadvantaged position, their lack of knowledge and skills, including language barriers and to some extent discrimination in the labor market, does not help them in achieving their goal of finding a suitable job. (Pécoud,2003)

While the most common practice is to look for a job, refugees can also start their own business and by doing so adding value to their society and economy. Not only does this benefit them and their host country in a monetary way, the Entrepreneurial endeavor also helps the refugees with integrating better and faster. (Kloosterman et al, 1999).

Entrepreneurial activity of refugees does not by default result in positive economic success. In a study conducted by Li (2000) a group of self-employed immigrants and their monetary success was researched and the results suggested that they earned at times even less than their

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counterparts who were on payroll. However, other studies have shown that these conclusions do not only relate to refugee entrepreneurs, as native non-refugee entrepreneurs at times also earn less than their salaried counterparts. (Hamilton, 2000)

Regardless of the possible downsides of Refugee Entrepreneurship, the refugees can certainly be helped in their path of integration and becoming self-sustainable through opportunities in becoming an Entrepreneur in their new countries.

In the Netherlands 63% of the total $738.4 billion of GDP comes from the contribution of Small and Medium Enterprises. Of the current population, 11% of the 18-64 year old’s are either a nascent entrepreneur or owner-manager of a new business. This puts the Netherlands on the 28th rank according to the Global Entrepreneurship Monitor (2017). An even higher ranking

worldwide can be found in the rate of involvement of employees in entrepreneurial activities. This includes the development or launch of new goods and services and the start of new business units or subsidiaries. Here the Netherlands is in the Top 3 worldwide with 7.6% of their 18-64 population taking part. (GEM, 2017)

By including Entrepreneurship among refugees as an option for their career path in their new home country, both refugee and host country can benefit. The inclusion of the refugees and their respective integration in the country can be aided and accelerated, while in general the level of entrepreneurship and economic benefits of the host country can be improved.

Refugees who have a recognized status in the Netherlands can take part in the labor market, as well as start their own business. Thus, those who still await their confirmation from the government regarding their status cannot, except for rare exceptions. (VWN,2017)

The provinces in the Netherlands can have their own approach towards the integration and inclusion of the refugees in their area. Collaborations with institutions such as Vluchtelingen

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generally include allocating a client manager to a refugee who then aids him/her in the process of applying for and finding a job. In addition, the client managers help the refugees with choices regarding language schools, and form a helping hand with getting the refugee in touch with the necessary organizations/higher education that they are interested in. This however, does not necessarily include the guidance towards entrepreneurship.

The missing link between refugees and their desire to become an entrepreneur is filled by social institutions and social entrepreneurial programs in the Netherlands, or simply lacking.

This paper will firstly show the need for a separate research domain for refugee entrepreneurs. The theoretical framework that forms the basis of analysis and used methodology are explained in the proceeding chapters. The processes including the difficulties that the refugees face on their journey of starting their own business will be discussed. These results will be compared to similar studies in this field, while specifically making the comparison with the research conducted by Wauters et al (2008) where barriers to refugee entrepreneurship in Belgium were examined.

Finally, the conclusions of the research will be given and areas for further research within this domain will be recommended.

This research will contribute to the current knowledge and knowhow regarding the aid that is provided to refugees in the Netherlands to start their own business. In addition, it serves as a report to heighten awareness to those in this field regarding the current situation and point out areas of improvement. The improvements in these processes are not limited to governmental institutions but also include social enterprises.

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Refugee Entrepreneurship as an Independent Research Domain

Research regarding Entrepreneurship by immigrants and ethnicities other than those who are native in the country have been conducted in the past. One may believe that these types of research and their results can be assumed to be valid for refugees as well. However, even though refugees may have certain characteristics in common, they do differ significantly from other immigrants/ethnic groups.

Research on “ethnic entrepreneurship” includes that of Kloosterman et al (1999), Pécoud (2003), and Masurel et al (2002). However, as Wouters et al (2008) have stated in their research: “these articles almost did not pay attention to refugees as a single group”.

As Wouters et al (2008) point out, those articles have been including the refugees in the general immigration population. The only distinction that has been made there is based on ‘nationality or ethnic background’ (Hammarstedt, 2001)

Naturally, the question arises whether there is a need specifically for refugees in the research domain. And why we cannot assume the results of researches alike, to be true for refugees as well since refugees and immigrants have similarities that overlap. Wouters et al (2008) have found six factors in favor of creating a separate research domain for refugees.

Firstly, as Gold (1992) stated, the social networks of refugees are less powerful and extensive than those that the immigrants usually have. Mostly, the refugees flee their countries by themselves as an individual, and come from different countries.

As most of the refugees have fled their country for reasons that include persecution, they are contrary to normal immigrants not able to go back to their country to get funding, capital or even labor. In addition, the refugees at times have experienced traumatic events which can lead

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to psychological problems. These problems in turn can interfere with their possible desire for self-employment. (Bernard, 1977; Hauff and Vaglum, 1993)

The majority of the refugees had to leave their home country rather spontaneously, they have little to no time to prepare themselves for their new home country (Gold, 1988). This also puts them in a disadvantage regarding their possessions, as they were not able to bring much with them in the first place. Causing them to leave behind important and valuable possessions and documentation such as diplomas and money.

Finally, the refugees “are unsuited to paid labor” (Wouters et al, 2008). This can be caused by them having worked at jobs that are either country specific, or different that at the host country.

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Defining Entrepreneur and Refugee.

When we conduct research in the field of refugee entrepreneurship in the Netherlands, it is of importance that we define ‘entrepreneurship’ and ‘refugee’. In research conducted by Alvarez et al (2013) the different definitions that have been used in previous research regarding entrepreneurs have been stated.

They referred to the definitions that were defined by previous researchers to get a clearer understanding about what it truly is that we talk about when we mention the word ‘entrepreneur’.

The definition of the word ‘entrepreneur’ can be a very specific definition that limits the word to only “individuals who exploit market opportunity through technical and/or organizational innovation” (Schumpeter, 1965). Stevenson at al (1990) defined entrepreneurs as “people that are in pursuit of opportunities, regardless of the resources that they have under their own control’.

Hisrich (1990) adds a bit more to it by stating that an entrepreneur is “someone who demonstrates initiative and creative thinking, is able to organize social and economic mechanisms to turn resources and situations to practical account, and accept risk and failure’. For this conducted research we use the definition of Bolton and Thompson (2000) who defined an entrepreneur as ‘a person who habitually creates and innovates to build something of recognized value around perceived opportunities”.

Regarding the definition of refugees there are multiple possibilities that are in general sense chose in accordance to the context in which it is used. Here we use the definition of refugee as stated by the 1951 UN Refugee Convention as someone who : “owing to well-founded fear of being persecuted for reasons of race, religion, nationality, membership of a particular social

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group or political opinion, is outside of the country of his nationality and is unable or, owing to such fear, is unwilling to avail himself of the protection of that country; or who, not having a nationality and being outside the country of his former habitual residence as a result of such events is unwilling to return to it.”

Methodology

Research Design

The research that has been conducted is of qualitative nature. The barriers to refugee entrepreneurship was the central phenomenon that required further exploring and understanding (Creswell, 2002) Qualitative research is chosen for its efficiency in finding answers to ‘How’ and ‘Why’ questions. (Blumberg, 2014; Yin, 1989).

For this research, the following question had been chosen:

“Why do refugees face challenges in becoming an Entrepreneur, and what are those?

Based on the theory of Eisenhardt (1989), an analysis of case studies has been chosen as the means to obtain information and, based on the information, research the matter. To obtain the necessary information that can be used for answering the pre-defined research questions, the involved organization(s) and institution(s) around the (aspiring) Refugee Entrepreneur were defined.

Generally, in qualitative research, it is common to study a few individuals or some cases instead of a larger sample. The reason being that “the overall ability of a researcher to provide an

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Studying collective cases is a way to “investigate a phenomenon, population, or general condition” (Creswell, 2002). This research has focused on having interviewees that can provide quality data by interviewing those who are (close to) the ideal candidate for this study. A group of eight people who fit that profile of being refugee and (aspiring) entrepreneur have been interviewed.

By studying multiple cases, one can have a better understanding of the phenomenon and therefore enhance the quality of the possible newly created theory (Brantlinger et al, 2005). Studying multiple cases permits us to perceive processes and outcomes across the different cases, while enabling a better understanding.

Participants

This study made use of non-probability Snowball sampling to create a group of heterogeneous (aspiring) refugee entrepreneurs. An effort has been made to create a group that includes refugees of different backgrounds as well as their level of experience regarding entrepreneurship. Participants were recruited using: (a) Personal network, (b) Network of those in own personal work environment and (c) participant referral (Snowballing technique).

Most participants were recruited by being asked face-to-face during the initial meeting, whereas others from whom phone numbers were received were called and asked to participate. The purpose of the study was explained to the participants, and consent was received from them. The success of the recruitment of the participants can be largely attributed to the fact that most were close to someone in the personal network of the researcher.

They participants ranged from 28 to 53 years, while their nationalities are from Syria, Iran and Armenia. The lack of variety in nationalities is mainly due to the snowball technique that was used for finding more participants as the social network of the participants includes mostly

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people from their own background. This can be a limitation and is therefore discussed in the limitations and recommendations section at the end. The group of participants consisted of refugees who live in the larger, urban cities in the Netherlands. For participant demographics, see Table 1.

Interviewee Sector Country of origin

Gender Already in business

Age

Jay Restaurant Syria M Yes 53

Neyruz Arts/Craft Syria F No 44

Pouya Import/Export Iran M Yes* 28

Amir Import/Export Iran M Yes* 31

Mohamed Trade Syria M No 30

Khaled Food industry Syria M No 31

T. Consultancy Armenia F No 28

Table 1

*= Has been in business in the past in the Netherlands, and sees himself doing something in the near future again.

Most of the interviewed refugees are not a Dutch citizen yet. An attempt was made to have a balanced proportion of male and females. This is somewhat more difficult to realize as most of the refugees in the first phase, generally are male, and once they have settled, are reunited with the women and children here.

We do believe that the women have a lot to offer in terms of entrepreneurship and are a very interesting subgroup to research, especially since for some women coming from countries where their rights were limited, entrepreneurship can be a response on their behalf to their gained freedom in the Netherlands.

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The actual sense of improved freedom that they experience here can be a reason for motivation by itself to start a business.

Interviews

For this research refugees who have their own business or have plans to start their own business have been interviewed. The interviews were set up in a semi structured way. The reason for this type of structure is that it gives the interviewees an opportunity to express their thoughts and feelings in a relative unobstructed conversation, while at the same time being guided towards answering certain questions that are relevant for findings that will give clarity to the chosen research questions. (Blumberg, 2014)

The interview included questions about the personal history of the refugee as well as their entrepreneurial experiences and history. Other questions were focused on understanding the difficulties that they encountered on their journey, or are experiencing now. The barriers that they perceive, how their decision on becoming an entrepreneur influences their integration in society and what their goals are regarding their business. As success is subjective, the refugees were also asked about what they would consider to be success to them in terms of their entrepreneurial endeavor.

The duration of the interviews was generally between 30-50 minutes. Since not all refugees are able to express themselves well in Dutch, they could choose between English and Dutch. (In one case the complete interview was conducted in Farsi due to the interviewee being able to express himself well in that language opposed to the other available options). The initial refugees that were selected for interviews were found through the existing network of organizations that are in direct contact with refugees and entrepreneurs. By use of the ‘snowball’ effect, (Blumberg, 2014) other refugees were recommended to us for interviews by

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those who had already taken part. Contact information was received through the interviewed refugees, with the permission of their connections.

The interview locations were chosen in accordance with the refugees, based on their preferences. In general, the interviews were conducted in their cities at place where they felt at ease and comfort. This helped to have an environment in which the interviewee could feel that he/she can speak freely and comfortable. In case any of the interviewees wanted to change or add anything to their already given answers during the interview, they had the option to contact me.

The interviewee had the choice to have their personal information being stated, or give their answers in a fully anonymous way. This approach was chosen to receive as much as possible uncensored information and opinions.

The interviewees all had the possibility to receive the full research report and the interviews, if desired. As not all interviewees were able to correctly express themselves in one of the languages they could choose from, they had the freedom to use a word in the other language when needed. In addition, since Farsi is also understood by the interviewer, in case of Iranian refugees, they had an additional option to express certain unclear words and ideas in Farsi. To create a uniform understanding, the confirmation of whether the message was understood correctly, the interviewees were asked to confirm the paraphrasing and summaries that were at times made after their answers.

All the interviews were digitally recorded and carefully analyzed. Categories of the types of questions were made, and answers that looked similar or were related were grouped. Based on the answers, if possible a generalization of certain answer was made. Those answers were the ones that most respondents seemed to have in common. Not all questions led directly to a relevant answer as some have the purpose to guide a certain topic during the interview, and

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serve as a stepping stone towards the following question. The thesis itself consists quotes to illustrate the findings of the research. These quotations are generally with name of the interviewee, except for when an interviewee object having their (first) name stated.

The findings can be considered to have a good validity as the interviewees are all very directly involved in the matter.

The same questions were used for the interviews, while simultaneously giving space for their own input and personal stories in addition to their answers. This improved the reliability of the gained results.

Confirmability

To confirm and validate the findings of the research, methods of respondent validation (Creswell, 2002) and participant checking (Janesick, 2000) were used. In the pursuit of validation, a summary of the findings was provided to the participants, while requesting their confirmation whether they perceived the findings being correct based on their personal statements. Member checking was used both during and after the interviews to confirm whether the quotations and paraphrasing, as well as their answers were understood well and portrayed in a correct way.

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Refugee Theory: Exile and Resettlement

As the story and history of refugees can differ, there is more than one factor that contributes to these differences and the impact that they have on their day to day life and experiences.

F. Kunz (1981) has differentiated between these factors and created a foundational theory upon which one can build his/her research. The theory distinguishes the variation of reasons and motivations for one being a refugee (Home factors) as well as the future factors that are in play once a refugee settles in his new country and environment (Host related).

Home Related Factors

Within the any wave of refugees that enters any given country, there are perceivable differences between the individuals that are part of that group. These include their social status, relationships, and their sense of connectedness with the country that they are leaving behind. Many of the problems of a refugee that arise while trying to settle in the new country, are in some way related to his/her sense of identification and connection with their home country. Some refugees might have less emotional connection and depends less on their home country, while the other still has very strong ties that influences the daily life and integration in the new country.

The influencing factors have their foundation in the initial deciding process and choice that one makes about becoming a refugee. Leaving the country of birth can be the result of the so called “anticipatory flight’. Refugees that belong to this group have planned their departure, while those who become refugees due to unforeseen circumstances such as war can be labeled as “acute refugees” (Kunz,1981).

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Regardless of their initial differences, both types can be subdivided into three identification categories:

• Majority-identified refugees

This category consists of refugees who share the conviction that their resistance against the events in the home country that led to their departure, is shared by majority of their fellow countrymen. These refugees identify themselves strongly with their country, but not with the government.

• Events-alienated refugees

This group of refugees is composed by those who rarely have the hope, nor wish to return to their home country. Reasons being that their preceding events which caused them to flee in the first place, or forms of experienced discrimination, have disconnected them from their former countrymen and country. Consequently, these refugees have a sense of rejection by their country or a part of its citizens.

• Self-alienated refugees

The common ground for refugees in this group, is their desire to not be identified with the country of origin. Even though he reasons may individually differ, this group shares an overwhelming logic for departure due to differences in ideology.

As these categories are rather unique, it is seemed possible to recognize the category that belongs to a certain refugee. In case of the self-alienated refugees a challenge arises in the recognition of whether their departure of the home country was voluntary.

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Attitudes to Flight and Homeland

Here we can in broad lines distinguish two types of refugees regarding their attitudes towards their flight and homeland.

In the first place, we have the group of Reactive Fate-groups. This group consists of those who are generally the refugees of wars, and decisive government changes/revolutions. The overwhelming part of this group consists of Majority-identified refugees. A characteristic that these refugees share is the nature of their flight. Refugees who belong to this category ‘flee reluctantly and without a clear solution in sight” (Kunz, 1981). This due to them being driven by a great opposition against their current situation which is perceived as intolerable.

The second group is called “Purpose groups”. The refugees in this group are clearly different than their counterparts in the Reactive Fate groups. Purpose groups refugees are generally people who have, to a bigger extent created their own refugee situation. This includes people who based on their motives and way of fleeing can be seen as voluntary immigrants.

Within these purpose groups, one finds the “Self-fulfilling” groups. Those who are part of this group have become alienated by their country due to their insisting on certain beliefs and ideologies that are not mainstream.

Due to their insistence, members of this group sometimes decide to leave their country on a voluntary basis. The question here is of course whether they can be seen as refugees or rather as voluntary migrants. Whether they are seen voluntary migrants depends on how their departure came to existence. If ‘harassment and fear of execution’ (Kunz, 1981) played a role, the tendency is to see these people as refugees.

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Host Related Factors

Even though a large part of the new refugees is still connected in some (emotional) way to their home country due to memories, they generally do not stay living in the past. These new refugees find ways to focus on their current new lives, and unless they have no other option, quickly start looking around and exploring their new country. In their exploration, they evaluate the attitudes of the hosts and look for a “niche for themselves in which they can feel consistent with their

background and gradually changing expectations” (Kunz, 1981)

Therefore, the influence that the culture and population of the new country has on the refugee is very important for their integration.

Cultural Compatibility

The most important variable that has an influence on the level of happiness that is experienced during resettling in a new country, is the compatibility of the culture of the host country, with the refugee’s own home country. Countries that differ in a linguistic way a lot from their home countries, tent to make refugees feel more excluded and lonely due to isolation from personal contact with others. This can in turn result into psychological problems such as depressions and paranoia (Kunz,1981). In addition, in case the values of the population in the host country differ from those at the refugee’s home country, this can become a reason for withdrawal and isolation as well. Whenever the refugees find an adequate number of members in their new environment that do share their values, language, religion and other habits, their integration can be accelerated.

Population Policies of the Host Country

Whether the influx of refugees is welcomed with open arms and supported by the country depends on a few factors. There are countries that, due to their small population, are much more

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supportive to population growth through refugee immigration that those who already have large populations. For these countries, it is believed that the refugees will have a large impact on both the country’s population growth as well as their economic capacity.

Augmentative societies as Kunz (1981) calls these, are more inclined to view a refugee as a valued member of their society, and therefore invest in them. This however does not come without downsides. These societies may view the refugee firstly as a source to exploit to their own advantage through labor. Within these societies, based on their desire for exploitation, they tend to neglect the elder and ill who are unlikely to contribute to their desired growth.

In addition, the augmentative societies view the refugees as permanent immigrants. This influences the perceived sense of being welcome of the refugee, and thus in turn contributes to their integration in a negative way.

Contrary to these augmentative societies, countries that already are “overpopulated and demographically self-sufficient are less likely to accept large numbers of refugees” (Kunz, 1981) These countries (including the Netherlands) generally do not force refugees to adopt their way of life, but instead are more tolerant towards the refugees in keeping their own customs to a certain extent.

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Results

Predictive hypotheses

In this part, we look at the results, divided in the different categories based on the interviews and input that was available.

Within this theory of Kunz, some predictive hypotheses are made that can be further explored in different studies related to refugees. For this dissertation, some are relevant and can be tested to a certain extent to find whether they can apply to refugee entrepreneurs in the Netherlands.

Kunz (1981) states that

‘All things being equal, refugee settlers of events-alienated background, unless experiences have made them strongly neurotic, adjust themselves more quickly to life in augmentative

societies and are more successful than refugee settles who identified themselves with the

majority.’

As well as:

“The events-alienated refugee settler, who arrives as an anticipatory refugee, is most likely to become a successful settler: the background combines both a motivation of tabula rasa

towards the host society and the most favorable pattern of refugee kinetics.”

In case of the Refugee entrepreneurs, this can be the reason for a difference between the refugees in terms of their integration and success here in the Netherlands, based on which type of refugee they are.

Based on this sample of refugee (aspiring) entrepreneurs, we did not find a difference in their success with regards to the predictive hypotheses. The refugees come from countries as Iran, Syria and Armenia. While some had more time to prepare themselves for fleeing their home

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country than others, overall the interviewees seem to be among the more successful in their respective groups.

This can be due to the fact that only (aspiring) entrepreneurs are interviewed, and this type of people generally are very autonomous while striving for their goals.

The theory of Kunz (1981) could be more effective if used with a broader group of refugees, that consists of more people and not exclusively the entrepreneurs within them.

Motivations for Entrepreneurship

The motivations for refugees to start as an entrepreneur can differ. Some may be guided more by intrinsic motivations, while others are in pursuit of exterior motives. Not only does their motivation differ, their preferences regarding the sector and perceptions of opportunities does so as well.

A lack of suited jobs may push one to start for himself, while another may have a job and desire to quit to start an own business. Apparently, most refugee entrepreneurs found their drive by their dislike for low profile jobs, and their dependence on it. As Jay pointed out:

“I felt that I can’t rely on that what is offered [Jobs that are mediocre] I felt that I should create another path. I thought of entrepreneurship as a vehicle” (Jay)

In case of Jay, it is important to note that although he does not want to be dependent on low profile jobs:

“I felt that I can’t rely on that what is offered [Jobs that are mediocre] I felt that I should create another path. I thought of entrepreneurship as a vehicle” (Jay, Syria)

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Although not wanting to rely on certain jobs may seem somewhat an extrinsic motivation, his true motivation is intrinsic as he has always been an entrepreneur and simply enjoys starting businesses:

“I had many businesses, I was an entrepreneur, I set up businesses, that was my job.”(Jay, Syria) Which may explain his successes in the past with previous businesses, as Gold (1988) pointed out that businesses that are created for the sole purpose of being a job, are generally not that successful and more likely to fail in comparison to those that stem from intrinsically motivated enterprises.

For him it has been very clear from the start that he wanted to continue his entrepreneurial journey here in the Netherlands.

Not only negative motivations prevail within refugee entrepreneurs, as Kloosterman (2003) has shown, there is a rise in positive motivations for refugees to start for themselves. Interviewer T. who already has a high-profile job confirms Kloosterman’s (2003) findings:

“For me, the reason to start for myself is to have freedom. To me it [freedom] means doing what I like and working in fields that I like.” (T,Armenia)

In addition, knowing what it is that they don’t want, became their motivation to start entrepreneurship. Not always does the motivation come from an intrinsic desire to start one’s own business merely for the benefits that it has, at times it comes partly from knowing that you do not want to work at a job for your entire life:

“What I definitely do not want, what I currently have, is to be at the office from 9-5 [having an office job]. That you really need to be physically present at the office.”(T, Armenia)

What is interesting is that she has motivations that are both intrinsic as well as partly due to knowing what she does not want. As mentioned earlier she has a good job as a consultant, and

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her main motivation is to have her own freedom in life. But at the same time, not wanting to have a 9-5 job weighs in on her entrepreneurial motivation as well.

She is not alone in this, as Amir pointed out that he also found motivation in thinking that a job is not something that suits him perfectly:

“I feel like you are being taken advantage of working for someone else [company], and you will need to work for people that you feel are sometimes even less smart than you.” (Amir, Iran)

In line with the findings of Wauters et al (2008), we see that in some cases the motivation for starting an own business comes from not believing that one has good chances of finding a good job. As Khaled pointed out that a combination of the opportunities that Netherlands seems to have in terms of Entrepreneurship and its entrepreneurial culture, as well as his own perceived lack of chances and difficulties in finding a job were his main motivations:

“I thought that I would have certain difficulties to get to the job market, specifically the language barrier.” (Khaled, Syria)

There are, in addition to the previous mentioned motivations also those that stem from a more altruistic desire to help others. For some, entrepreneurship is a means to help and provide for others:

“By creating the cooking business, I can do something for other Syrian women here in the Netherlands” (Neyruz, Syria)

This does not exclude other motivations on her part to start a business, but her desire to give back to society is one of her driving forces.

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Access to Entrepreneurship in the Netherlands

In the Netherlands, no previous proof of expertise regarding entrepreneurship is needed to start a company. At the chamber of commerce anyone who has the legal status to work in the Netherlands can start his own company. This law/regulation is positive for the refugees, as most of them are not anymore in possession of official documents that they might have needed otherwise to proof their affinity with entrepreneurship.

For the refugees, there is however a legal barrier to start their own business. Only once a refugee has been granted his/her status as ‘status holder’, they are able to work and start something for themselves. Before this stage is reached, they are only able to do voluntary work with some restrictions regarding the hours per week. Thus, in terms of real barriers for the refugees to have access to entrepreneurship in the Netherlands, there are none other than having to be eligible to work in this country, by having your ‘status’ confirmed.

Most of the refugees that were interviewed had left their country in an unexpected fashion and therefore had left much of their belongings and capital in their home country. Although the reasons for fleeing the country differed, the result of them leaving unexpectedly has been the same for most.

One did however managed to make sure her artwork made it to the Netherlands with here:

“I had my artwork send to me in the Netherlands...I carry my art with my most of the time, it is very valuable to me.’ (Neyruz, Syria)

Her situation is more an exception than a rule, as the others have left most if not all of their capital and belongings in their home country.

Apart from the motivation to start an entrepreneurial journey, another factor of influence can be the opportunities that one sees, and the sector that one chooses based on those opportunities.

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This can differ per person as the way we perceive opportunities is different per person. (van Gelderen, 2014)

These perceived opportunities, or lack thereof, can therefore be a motivation of serve as an obstacle. If someone does not see clear opportunities to start his/her own business, this may result in them not even trying to start something.

Whereas if an opportunity is recognized, this can ignite the desire to start for oneself. Some people are entrepreneurs regardless of general opportunities. These people will always, regardless of where they are, find opportunities.

Jay is an example of that type of entrepreneur. He has had businesses in the past, and starting businesses for him is his passion. Although he did recognize that the market in the Netherlands is not per se one filled with easy opportunities:

“Over here [In the Netherlands] is a very saturated market. If you don’t have a twist or something new…opening a bakery is not enough, why are they going to buy your bread?” (Jay, Syria)

Although Jay is aware of the, in his perception, saturated Dutch market, this did not hold him back in terms of starting for his own. He managed to find a niche within the saturated Dutch market and serve that niche by using his background as an advantage.

For another (aspiring) entrepreneur, the saturated -as he perceives- market makes it difficult to find a unique idea worth going for.

“The Dutch market is saturated, it is difficult to find something that is unique” (Mohamed, Syria) However, this does not stop him from wanting to start a business here in the Netherlands, but he has found a more creative solution to make use of the possibilities that the Netherlands offer in terms of entrepreneurship:

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“I see myself starting a trading company… a Dutch business, but I will do business in other countries.” (Mohamed, Syria)

Market opportunities

Although the ideas themselves can help to motivate, we see that one has to believe for it to be possible to manifest those ideas. Regarding to the chances that one has as an entrepreneur, we find that overall the perception of the refugees in this country regarding entrepreneurial possibilities is positive.

“In the Netherlands, however, it is easy to start your company, this is a big plus. You go to the Chamber of Commerce and you can open your business. There is no big capital needed anymore.” (Amir, Iran) In case of Khaled, his perceived lesser chances to get a good job, combined with his positive view of the Dutch entrepreneurial market got him motivated:

“When I heard that the Netherlands really facilitates startups and being an entrepreneur, that’s when I thought about starting my own business” (Khaled, Syria)

This seems to be something that most of the refugees have in common, as regardless of gender, nationality or current position in society regarding the labor market, they all believed the Netherlands to be a good country for entrepreneurship:

“I do think that the Netherlands is a good country for entrepreneurship…The EU regulations also help you, and the monetary policy. Things are well in the Netherlands, thus the people have faith in the economy.” (T, Armenia)

Although the ambition in case of T. is high and she does perceive the Netherlands as a good country for entrepreneurship, this does not exclude her concerns for how to get her initial customers, and sees this as a potential first challenge of starting her business:

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“I think in the beginning it will be difficult to get my first customers, because I don’t have any experience or previous customers yet.” (T., Armenia)

Before any actual challenges and barriers are encountered by a refugee entrepreneur. They will at first need to pass their perceived barriers in the mind. This can be, as mentioned earlier, their perception of the chances that they have in starting their own country by looking at the Netherlands as a whole, as an influential factor. In addition, they also have a certain perception about themselves and their personal chances as an entrepreneur. This perception, is influenced by their experiences and knowledge they have so far in life, as well as their skills in spotting opportunities. (van Gelderen, 2014)

Most the refugees seem to believe in the possibilities that they have here. As Khaled pointed out:

“For certain types [of businesses] maybe I have a better chance than Dutch people, for example food wise…I can bring new concepts that don’t exists here.” (Khaled, Syria)

They are aware that their experiences and baggage can be an advantage instead of only a disadvantage. Not only does that make them believe that they have an equal chance, at times they even believe that they have a better chance than their Dutch counterparts:

“I believe I have even more chances than a Dutch person to become an entrepreneur here…However, I have come a long way to get where I am now. In the beginning, we do have a disadvantage.” (T, Armenia)

This does not mean however that they are not aware of their disadvantages that they have. They are overall aware that because of their past and experiences they can bring something new to the market, as they have a new look from the outside. Having entered this country later gives them the advantage of being able to spot opportunities that they either know from their home

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country, or are able to recognize while the Dutch fail to see those, as they have not been able to look at the Netherlands from the ‘outside’.

This however does not seem to be the truth for everyone, as Mohamed pointed out that:

“I believe the Dutch have a better chance, because of their network, capital…they are raised here, they know the rules and everything.” (Mohamed, Syria)

It should be noted that he does believe that given all those factors being equal, the refugees and the Dutch share the same chance for success as an entrepreneur. The only difference as he pointed out is the clear lack of capital, network, and knowledge of the system. Thus, he believes in his chances as an entrepreneur equal if we disregard all those factors.

Contrary to the research conducted by Wauters et al (2008) who found that most refugees in Belgium tend to go for a sector in which the barriers are low, rather than where they perceive market opportunities, those interviewed for this research in the Netherlands did not mention low barriers as a motivation for their choice of sector, but rather confirmed that their choice of sector was related to the opportunities that they had spotted.

That perceived opportunities play a big role in the decision making, is shown by how Amir and his partner got to the idea to start their business:

“Our idea come from a friend of mine in Iran, he told me that his uncle needed a certain machine, and asked me if I can export it to him. The triggered our idea to start a business in it [export of Agricultural vehicles]” (Amir, Iran)

In this situation, we see that even without having planned an entrepreneurial idea, the recognition of it in the moment, combined with a desired that was present but luring more in the back of the mind, proved to be enough to get going.

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(Social) Network of the Refugee

Those who decide to flee their country, are generally more inclined towards risk taking than their counterparts who decide to stay in the country where conflict is present. (Waldinger et al, 1990b). Regardless of whether a refugee is inclined towards risk and therefore is more open to start his own business, he/she will, as any other entrepreneur does, be in need of a social network to help him/her along the journey.

The social network of a refugee most often consists of fellow refugees and those that they can most associate themselves with. Starting in the Asylum Seeker Centers, the refugees create their social network of friends and contacts that they at times will keep in contact with after their status has been granted and they have moved to a permanent housing.

When the refugee decides to start his/her own business, their social network consists most of the time of the same people as it did before in the AZC. As they all are part of each other’s social network, there is not much input from outside those actors, and therefore their knowledge and expertise is limited to that which is known within their contacts.

This is something that turns out to be a challenge for the refugees:

“We did not have a powerful network… because our parents did not have any neither, and this was certainly a big disadvantage” (Amir)

We see that the nationality of the refugee can differ, and thus their social network based on the previous mentioned reasons can be different as well. However, regardless of nationality or gender, the refugees have in common that their lack of network is a barrier towards entrepreneurship:

“You need a good network, and I clearly lacked that…I didn’t know anyone that could introduce to what should I do here and there.” (Khaled)

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Those who do have a good network that they believe can help them in their journey have worked hard for it, and has taken them years to get:

“In the beginning, you do not have a network because you have missed some years here… I do have a good network, and I know how to build my network.” (T, Armenia)

Others have an external social network that they have gotten into:

“I do have a network that can help me at Delitelabs” (Mohamed, Syria)

In his case, he has found a social enterprise that helps refugees become an entrepreneur. Within the network of the enterprise, people who have affinity with entrepreneurship are included, and are willing and able to help the students there.

Overall, we see that the lack of a strong social network that can help them with their desires is a stumble block for the refugees as another pointed out:

“I have been trying to get in contact with people who can help me, there are many things I don’t know how to do, and I don’t have people in my network that can help me with it” (Neyruz, Syria)

How the refugees deal with the lack of network differs per person, as for someone it can be a motivation to put themselves out in open and start actively looking for people that can help, while for others it can demotivate and become a reason for not continuing their pursuit, albeit for now.

When you see that you have a lot of obstacles to have your own business, of course it demotivates you. It is not that you look for easier options, but then you will look for more realistic options. I got a scholarship, and decided to go with that [instead of starting own business]” (Khaled, Syria)

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Institutional and Societal Environment

Societal Environment

Many of the refugees come from countries where the societal system and bureaucracy is different than in the Netherlands. This, regardless of whether someone wants to start a business, is already a challenge by itself.

In addition, the Dutch culture and values differ in comparison with that of most refugees. Some refugees, apart from the bigger cultural and bureaucratical differences, even sense the subtler ones:

“I think the soft skills that the Dutch people have, are the one that we refugees really lack” (Jay, Syria) This referred to the way in which people in the Netherlands talk to each other and deal with their appointments. Having to learn, and to adjust to these differences is a challenge for the entrepreneurs. The Netherlands as a western country, relies more on punctuality and clear agreements that are done in a more formal way, whereas in the home country of most of the refugees, business and pleasure are intertwined and less rigid.

All the refugees had in common that they believed the lack of proper Dutch language skills is a barrier towards entrepreneurship for them:

“Language was also a barrier. When you, as a foreigner present an [business] idea, they [the Dutch] will take you less serious due to your use of language and being a foreigner.” (Amir, Iran)

Not only does an insufficient understand of the Dutch language hinder the progress of a refugee starting his/her own company, it might also as the example has shown, become of influence on how a refugee experiences how others perceive him in the Dutch society.

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For some, even though they felt they were doing their best to learn the language fast, and be part of the society, the did experience hinder and difficulties due to a lack of understanding in Dutch:

“My client manager and I weren’t on good terms. She insisted in speaking only Dutch, even though sometimes I really did not understand. I remember once I asked her to repeat something almost ten times because I really did not understand, but she continued in Dutch… She [client manager Municipality] felt more like a pressure to me than help…” (Khaled,Syria)

This shows that, even though the intention may be good, forcing the use of a language on someone that simply does not understand, can have an opposite effect.

Institutional Environment

The refugees have a client manager that is appointed to them by the municipality. This client manager helps them with settling in the Netherlands. Their tasks vary and include helping with housing, finding language schools, assisting with paperwork, and finding a job.

These client managers are the most reliable and direct contact source that the refugees have in this country in their early stages. Thus, if refugees have questions that their own peers cannot help them with, they can ask their client managers. Although the intention of the municipality is believed to be positive and helpful to the refugees, most of them beg to differ:

“I don’t think my client manager would have helped me in becoming an entrepreneur. If felt more that the client manager is someone that wants to drag you out of welfare. As if you are a lazy person that wants to enjoy the benefits and don’t want to start working.” (Khaled, Syria)

These experiences can, if they are not affecting a refugee directly in becoming an entrepreneur, affect him/her indirectly by giving the refugee the feeling that he does not have a haven to go in case he has questions or needs help.

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When asked whether they believed if the client managers that they had would be, or were helpful on their journey, most of them agreed they were not:

“The Gemeente doesn’t help you [ in becoming an Entrepreneur]…they refused my mother’s business proposal even though she had experience. Instead, they tried to push her into a job of packaging, which is completely unrelated to her job and level.” (Amir, Iran)

Another, who did not directly experience his client manager while needing help to start, did have a negative feeling about what might have been, if he had been in need:

“I don’t think my client manager would have helped me in becoming an entrepreneur. If felt more that the client manager is someone that wants to drag you out of welfare. As if you are a lazy person that wants to enjoy the benefits and don’t want to start working.”(Khaled, Syria)

Others believe that it comes down to luck in whom is assigned to you. They have experienced their personal client manager as either a help, or someone who at least was not bothering them in a negative way:

“I believe that if you really want to start your business, and are very motivated the client manager will help you…if he/she at least knows about the ways in which they can help” (Mohamed, Syria)

Jay, who has started his own restaurant did not experience his client manager in a negative way, neither positive. As he has not been much in contact but has seen with others around him that they experience theirs as a pressure rather than help. He believes that therefore it comes down to luck.

“Everything that we learn, it’s a matter of your personal luck. Your personal luck if you get your papers fast, your personal luck if you get a nice place, you get a nice client manager... it’s all in your luck” (Jay, Syria)

Regardless of the client managers as a source of potential help, most of the refugees are not convinced

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“I think that the government and also municipality are always the delaying factor in these things [Entrepreneurship” (T, Armenia)

Her belief is shared by others who another who even experiences a lack of consistency in the answers that they receive when inquiring for information:

“If I go to the Gemeente with a question about a business, ask 2-3 guys, you 2-3 answers” (Jay, Syria) This inconsistency has, in his case, resulted in him starting his own business while having to see his welfare being discontinued even though there are regulations that allow him to keep at least partly his welfare until he is in a further stage with his business:

“There is a system that can help me start my business and I am still on ‘uitkering’ (Welfare), I went to the Gemeente, I went to the Chamber of Commerce, I talked to everybody, nobody told me about it…Some weeks later, after my welfare was discontinued, I found out about it” (Jay, Syria)

Overall the refugees have not experienced the municipality as helpful along their journey, even though theoretically it can be a resource for them. For some of the aspiring entrepreneurs, overcoming this hurdle can be difficult and serve as an (in)direct demotivation to start for themselves.

Those who surviving as an entrepreneur in any given circumstance, will also do so in an environment where they face these challenges as one believes:

“I believe that if you really want to start your business, and are very motivated they [municipality] will help you” (Mohamed, Syria)

Although this can be seen as a general truth for entrepreneurs as they are known to find a way to make things happen, one should not ignore the impact that the perceived resistance or lack of help from the municipality can have on aspiring entrepreneurs that need somewhat more help.

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Conclusions and Policy Recommendations

Firstly, in this research we have followed the example set by Wauters et al (2008) to acknowledge the need for differentiation in research regarding refugee and immigrant entrepreneurs.

By focusing on the refugees as a separate domain, we can draw conclusions on what the experienced barriers for entrepreneurship are for this group in the Netherlands.

By having interviewed the refugee (aspiring) entrepreneurs we have gained insight in their obstacles and challenges that they experience. This can in turn explain the number of refugee entrepreneurs in the country as the barriers have influence in whether a refugee starts/continues with his/her entrepreneurial idea.

The theory of Kunz (1981) is used for the analysis where possible, as his theory included some predictive hypotheses that can be relevant for refugee entrepreneurship. In addition, for the analysis of these barriers the framework of Klootsterman et al. (1999), and Waldinger et al. (1990b) is used, just as done in the likeminded research done by Wauters et al. (2008). Within these frameworks, the barriers are classified in different categories, namely; Market opportunities/Access to entrepreneurship, social networks, and institutional and societal environment.

To improve the access to entrepreneurship, we recommend that the governmental institutions and municipality pro-actively make it known that the refugees have the opportunity to start their own business. Currently, for many it is not clear that they have this opportunity, and if they do, they are not receiving this information in a clear manner. The rules and regulations for refugees regarding starting their own business are also not clear to them. Many of them do not even know

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of the possibilities of starting their own company while still being able to (partly) keep their welfare, or do not even know about the possibility at all.

The client managers that these refugees have through the municipality are, according to the perception of the refugees, more focused on getting them a job fast, rather than seeing what the refugee himself wants. This results often in conflict and the refugees feeling pressured and not understood in his/her desires. An advice for the client managers is therefore also to let the possibility of starting a business be known to the refugee, so that he/she can decide where to focus on. As currently most only believe that they should start at a job very soon and feel pressured by this idea.

The refugees are also in need for consistent information as they have experienced that some client managers may give a different answer than others, while the questions should have objective singular answers.

If these client managers are not aware of the possibilities that the refugees have to start their own business, they may refer them to an organization or institution that does. In case of absence of such organization, it is advised for the municipality to create an environment where the refugees can go to with these questions regarding entrepreneurship and provide them with the support and know how to get started.

Another improvement is to make all the information regarding starting your own business that are relevant for refugees that can be found online accessible and available in English in addition to Dutch. As most of the refugees have made it known that even though the internet is a great

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source for information, they have lacked the Dutch language skills to be able to comprehend the information, and would have preferred if English was available.

Although most of the refugees did not per se encounter a lack of capital any different than a Dutch entrepreneur would, it is advised to provide the refugees with the information on how to obtain capital once needed. For now, the most part seemed to be stuck in a phase before the need for capital and therefore their lack of financial capital was in most cases not experienced.

However, those who had passed the other initial barriers did experience a lack of capital and needed money. By providing the refugees with the ways in which they can gather the capital or obtain loans and other types of financing, we can diminish this barrier and improve their chances of becoming an entrepreneur.

The lack of Dutch language skills that most refugees have in their initial period in the Netherlands also affects their chances and their perceived possibilities. The Dutch language is important for the refugees when starting their own business. Although most of them have been using English to get started, the lack of proper Dutch language skills does affect the success of the refugee entrepreneur. Here the language schools that are in collaboration with the municipality can add additional classes that help the refugees learn the language faster, or to learn more about the Dutch business language and principles. In addition, most refugees welcome the idea to start learning Dutch immediately when they are in the Asylum Seeker Center (AZC), but due to regulations, they are only granted that once their status is obtained, and thus during their waiting period in the AZC they are missing out on a great opportunity to get a head start with the language while waiting on the approval of their status. Though according to the current regulations, they are not able to get official language classes, the AZC’s

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can work with volunteers who would like to help the refugees with the basics of the Dutch language.

In general, the negative image that the refugees currently have in the media does not help them in improving their access to entrepreneurship and success. An improvement in how the refugees are portrayed in the media, by including success stories and positive (news) items, can help change this image, and in turn create a more open environment in which the refugees feel welcomed and more comforted which can result in having more confidence in starting their own business and getting (Dutch) customers.

Most refugees ask for information and advice within their own networks and do not have easy access to organizations or governmental institutes. The refugees can be helped if these organizations and institutions come to them in their initial stages in the Netherlands. An example can be giving workshops at the asylum seeker center (AZC). Many refugees feel stuck and useless during their initial stay at the AZC, although they already have ideas of what they want to do once they are out of it. But the restrictions that they have while staying there, withhold them from gaining the information and knowledge that can kick start their entrepreneurial adventure once they are given their ‘status’.

By providing these workshops and information sessions the refugees already have an idea of where they can find information in the future and receive the initial needed information and knowledge from credible sources from whom they otherwise would not have been able to do so due to the restrictions that they have while living in the AZC.

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It is important to note that the transfer of such information is not limited to workshops and classes, but can also be done (partly) by providing information in the form of booklets or any other educational material at the AZC. Of course, here we continue to follow the previous advice which is the need of having information available in English.

As we have seen the lack of networks that the refugees have, are perceived as a barrier. To help them with having a good network that is suited for starting their own business, the refugees can be made aware of Entrepreneurial networks that are available for everyone in the Netherlands. These include Meetups (Meetup.com) or other organizational and social entrepreneurial businesses that serve this exact purpose of being a strong network that the refugees can use to start their business.

Although we see that some barriers are the same for refugees as for normal immigrants, we do advice to regard refugees as a separate domain as they are entangled in other environments (such as their contact with a client manager from the municipality) which bring with, their own set of challenges. In addition, the refugees usually lack a social network more than other types of immigrants do, and therefore face additional challenges.

Limitations

This study was conducted with the utmost care to provide a better understanding about refugee entrepreneurship in the Netherlands. However, there are some limitations to this study that the reader should be aware of, and that can provide a foundation for further research in this field.

Firstly, the sample size can be increased to create a more accurate picture of the current situation. And even though a tentative effort was made to have a sample that exists of different nationalities, the majority still comes from three countries. More nationalities will provide the

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opportunity to eradicate possible biases that may come with these nationalities and is therefore recommended.

Another limitation is that most the refugees that were interviewed for this study were male. A more balanced division of gender among the interviewees can help to create a more valid and better understanding.

Recommendations for further research

As this area is relatively new and gaining more interest due to the influx of refugees in the past years, we believe that further research should be conducted to gain a better understanding of the position of refugees in the Netherlands in terms of entrepreneurship

Their challenges can be examined further by conducting research with a bigger sample group, as well as including more women and refugees from a broader range of nationalities.

In addition, the entrepreneurship eco environment that these refugees are part of, which includes the municipality, institutions and social enterprises could be included in further research. This will help to examine their perception and beliefs regarding the chances and challenges of refugee entrepreneurs, or it may serve as something that can increase their awareness about this topic.

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Refugee entrepreneurship in the Netherlands