Tackling the refugee crisis: a business opportunity

Tackling the refugee crisis: a business opportunity

Photo by Perry Grone on Unsplash

By Indira Kartallozi

 The message is clear: tackling the refugee crisis is not only a corporate social responsibility, but also a significant business opportunity

We live in a world where 70.8 million[1] people are forcibly displaced by conflict, violence, famine, environmental disasters and development projects. Nearly 37,000 people have to flee their homes every day as a result of conflict or persecution. Besides the ongoing impact of climate change, every year since 2008, 26.4 million people are forced to leave their homes due to severe weather events such as flooding, earthquakes, hurricanes and droughts[2]. We expect a further 50 to 200 million vulnerable people to become environmental or climate refugees by 2050[3].

How can – and indeed, how should – business respond to this growing social, economic and humanitarian crisis? There are three principle ways:

  1. Making a philanthropic contribution to support refugee organisations and agencies;
  2. Helping to change the negative perception of forced migrants and refugees portrayed in the media and by some politicians; and
  3. Directly supporting refugees’ economic agency, either through entrepreneur mentorship schemes or affirmative inclusion as employees or suppliers.

So far, very few companies are including support for migrants and refugees as part of their corporate social responsibility (CSR) programs. Yet it clearly links to several of the core subjects of the ISO 26000 global standard on social responsibility, including human rights, labour rights and community development. Thankfully, there are progressive companies leading the way, including Accenture, Airbnb, Chobani, Goldman Sachs, Google, HP, IBM, JPMorgan Chase & Co, Linkedin, Mastercard, Microsft, Tripadvisor, UPS and Western Union[1].

Changing media and public perceptions of refugees and migrants – which is still overwhelmingly negative – relies on companies becoming more aware of the facts and sharing them. For example, studies by the OECD[2], IMF[3] and European Union[4] all show that refugees increase GDP in the short-term due to more public spending, thus creating a fiscal stimulus. Research also shows that, contrary to popular belief, migrants to and within Europe tend to pay more in taxes than they take out in state benefits[5]. Furthermore, according to the OECD, the influx of refugees is imperative to help developed economies avoid stagnation and population decline.[6]

For companies to work with refugees and support their positive contribution, they need to recognize three crucial benefits:

  1. Refugees bring key skills and diversity which can enhance local economies and promote innovation and creativity;
  2. Refugees are more socially conscious and likely to volunteer in their communities, thus building social capital; and
  3. Refugees are more likely to start a business and display entrepreneurial skills.

Research published in Harvard Business Review provides compelling evidence that diversity unlocks innovation and drives market growth[7]. Besides diversity, refugees bring extensive skills. The IMF claims that the most recent wave of asylum seekers are better educated than those in the past, with 21% of Syrians who arrived in Germany in 2013-14 having post-secondary education, close to the German average (23%)[8].

Refugee’s experience of poverty and hardship make them more empathic and socially conscious; hence they are more likely to volunteer, engage in community groups and create services to empower other refugees. [9] This creates social capital in the communities in which they live. For example, in the UK, Evelyn Oldfield Unit has calculated that refugee volunteers contribute an average of 66% of the working hours in community organisations – the equivalent of five extra full-time staff per organisation per year.[10]

Our global refugee crisis is a major opportunity for businesses.[11] In Betts’ 2014 study, titled Refugee Economies: Rethinking Popular Assumptions, it was found that the presence of refugees boosts a local economy significantly as a result of additional purchasing power, the creation of employment and the provision of human capital.[12] For example, in the UK, an estimated 30,000 jobs have been created in Leicester by Ugandan Asian refugees since 1972.[13]

In fact, migrants often make better entrepreneurs due to the experiences they have endured[14]. In Britain, migrants are nearly twice as likely as locals to start a business and in Australia refugees are the most entrepreneurial migrants.[15] In the United States, the Office of Refugee Resettlement reported that refugees had developed, expanded or maintained approximately 10,800 micro-business over the past 20 years, with a business survival rate of 88% and a loan repayment rate of nearly 98%, far higher than the average USA microenterprise loan repayment rate.[16] In Uganda, refugee entrepreneurs employ 2.4 people on average in Kampala, thus generating employment.[17]

The message is clear: tackling the refugee crisis is not only a corporate social responsibility, but also a significant business opportunity.

[1] UNHCR (2019) Figures at a glance https://www.unhcr.org/figures-at-a-glance.html

[2] Help Refugees (2019) Climate Refugees: A global Crisis https://helprefugees.org/news/the-plight-and-rise-of-climate-refugees/

[3] OECD (2015) How will the refugee surge affect the European economy? Migration Policy Debates, No.8, November. https://www.oecd.org/migration/How-will-the-refugee-surge-affect-the-European-economy.pdf

[1] https://www.whitehouse.gov/the-press-office/2016/06/30/fact-sheet-white-house-launches-call-action-private-sector-engagement

[2] OECD (2015) How will the refugee surge affect the European economy? Migration Policy Debates, No.8, November. https://www.oecd.org/migration/How-will-the-refugee-surge-affect-the-European-economy.pdf

[3] The Economist (2015) The economic impact of refugees: For good or ill. January 21. http://www.economist.com/news/finance-and-economics/21688938-europes-new-arrivals-will-probably-dent-public-finances-not-wages-good-or [accessed 10 December 2016]

[4] Kollewe, J. (2016) IMF says refugee influx could provide EU economic boost. The Guardian, January 20. https://www.theguardian.com/business/2016/jan/20/imf-refugee-influx-provide-eu-economic-boo

[5] UCL (2014) Positive economic impact of UK immigration from the European Union: new evidence. UCL News, November 5. https://www.ucl.ac.uk/news/news-articles/1114/051114-economic-impact-EU-immigration#sthash.pGjj6OlJ.dpuf

[6] http://www.worldfinance.com/infrastructure-investment/government-policy/refugees-are-an-economic-benefit-not-burden-to-europe

[7] https://hbr.org/2013/12/how-diversity-can-drive-innovation

[8] Kollewe, J. (2016) IMF says refugee influx could provide EU economic boost. The Guardian, January 20. https://www.theguardian.com/business/2016/jan/20/imf-refugee-influx-provide-eu-economic-boost

[9] Refugee and Migrant Community Organisations in 2009: The first in an annual series of reflections on the state of the sector, Ruth Valentine for The Evelyn Oldfield Unit www.evelynoldfield.co.uk/publications/index.shtml

[10] Working with Volunteers, A management guide for refugee community organisations by Kate Bowgett and Lynne Gillett, Evelyn Oldfield Unit. www.evelynoldfield.co.uk/publications/index.shtmlLynne Gillett, Evelyn Oldfield Unit. www.evelynoldfield.co.uk/publications/index.shtml

[11] https://www.theguardian.com/business/2015/sep/11/europes-refugee-crisis-is-a-major-opportunity-for-businesses

[12] http://www.worldfinance.com/infrastructure-investment/government-policy/refugees-are-an-economic-benefit-not-burden-to-europe

[13] https://www.theguardian.com/uk/2002/aug/11/race.world

[14] https://www.oecd.org/migration/How-will-the-refugee-surge-affect-the-European-economy.pdf

& Stadler, C. (2015) 5 reasons why immigrants make great entrepreneurs to boost an economy. Forbes, September 8.

[15] http://www.brusselstimes.com/opinion/5713/how-the-refugees-can-boost-eu-s-economy

[16] http://www.unhcr.org/5273a9e89.pdf

[17] https://www.rsc.ox.ac.uk/files/publications/other/refugee-economies-2014.pdf

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