It’s pretty well established that immigrants make excellent entrepreneurs, as the fresh perspective they bring to their new home affords them the opportunity to innovate, while a lack of familiarity with local systems and networks makes starting a business an attractive option for many.

It’s no surprise, therefore, that nearly half of the Fortune 500 companies were founded either by immigrants or their children.  As research from Keele University illustrates, however, this should not be taken to mean that entrepreneurial success is easy or can be taken for granted.

Barriers to success

Obviously, the creation of any startup is extremely challenging, as the failure rates of around 80% testify, but immigrant entrepreneurs face additional barriers on account of their outsider status.  This makes them much more dependent on the legal and financial systems in place in a country, as well as the government.

The study also highlights the extremely variable visa situation around the world, as whereas some countries offer a startup visa, many do not.  These difficulties extend to accessing the financial systems in their host country.  Because banks struggle to assess the financial history of immigrants, it can be difficult to raise capital and ongoing credit.

With the general language towards immigrants being hostile in recent years, there can also be a portrayal of immigrant entrepreneurs as taking jobs away from native citizens or driving indigenous businesses out of business.

There also remain ongoing issues with regards to the successful assimilation of immigrants, whether entrepreneurs or otherwise, into the various systems and processes that underpin professional success.  There are particular weaknesses, for instance, in the generation of the social capital that is so important to startup success.

Making improvements

An obvious first step for countries to make is to replicate some of the startup visa schemes operated in countries like Singapore and Canada.  This could also be part of a wider policy drive to remove the harmful rhetoric used towards and about migrants so that their contributions to society are celebrated.

The authors also argue that financial firms should do more to partner with institutions in people’s home countries to enable them to get a better understanding of their creditworthiness and general financial history.  Other institutions could also do more to help immigrant entrepreneurs develop the social capital they will need to succeed.

The paper is a timely reminder that if countries want to reap the considerable benefits immigrant entrepreneurs bring they need to up their game in terms of the welcome they provide and the environment that is offered to support them.