Entrepreneurs have traits that are unique to them. These include opportunity alerts, adjusted to market openings and the investment environment, risk tolerant, and innovative.
Although when considering who might become an entrepreneur, immigrants may not come to mind on the list of possibilities, but these individuals, as well as their descendants, are in a good position to recognize potential investment opportunities in their own country and also make good use of such opportunities by using their ties in both worlds.
Policymakers and development practitioners are examining how diaspora entrepreneurs could help promote economic growth by directing investment back to their home countries. Compared to diaspora bonds or remittances, diaspora members exercise more direct control over the use of funds in the presence of business investments. And members are more willing to take risks or engage in business in high-risk or emerging markets compared to non-diaspora investors. In addition, members have the advantage of being “first movers” due to their knowledge of the local economic, political and cultural environment and also due to their language skills and personal connections, when it comes to starting or investing in businesses in their countries where they originally From
Despite the many advantages that direct diaspora investors and entrepreneurs have, many developing countries have had limited success, especially those with internal conflicts, civil unrest, or countries involved in war. The presence of complicated tax laws, corruption and less availability of local financing is also quite a deterrent for people when they carry out economic activities in a country.
Below is a brief description of the nature of entrepreneurship, the different strategies adopted by organizations to support entrepreneurs, their ventures and the appropriate conditions to create direct investment opportunities in the countries of origin.
Levels of Commitment to Diaspora Entrepreneurship
In the last decade, numerous governments and other organizations have devised programs that aim to help emigrants and their descendants to invest in their country of origin. These include government-run programs to be run privately and funded, but for the most part, these are some form of public-private partnership. Again, there are some organizations that are hybrids, working in various categories of activities, including mentoring, networking, venture capital, investing, and strategic partnerships.
Networking organizations work to foster entrepreneurship by providing different opportunities to bring diaspora, professionals and local business leaders together for meetings (either in person or online) and discuss the different opportunities that exist in the country of origin for business and investments. There are also many networking organizations that promote public-private partnerships by facilitating meetings between diaspora members and locals, while others work to foster partnerships and homeland opportunities among business leaders.
Mentoring organizations are more involved in supporting entrepreneurship among members of the diaspora. Their work is different from pure network organizations in that their efforts are aimed at bringing together aspiring entrepreneurs or business owners looking to expand their operations abroad, experienced experts from the diaspora, and business leaders.
Training organizations work to provide aspiring entrepreneurs with the knowledge and skills needed to set up and run a business. Programs include providing diaspora expertise to entrepreneurs in their home countries and also providing lessons on business management as well as guidance on ways to seek funding.
The role of investment organizations includes providing the necessary funds for initial start-up or necessary capital injections later, and could raise public or private funds or matching grants. While there are organizations that do not get involved in overseeing the money they offer to entrepreneurs, others are likely to see how their money is used at different stages of project implementation.
Venture capital, as well as partner organizations, are involved in more than just providing seed funds and are typically heavily involved in commercial projects that they believe could be a profitable venture. These organizations often opt for some strategic alliances with business leaders, professionals, engineers, and other venture capitalists.
Organizations that work for diaspora entrepreneurship work in different aspects to provide support. These could be creating networking opportunities among business leaders or fostering long-term economic growth to create strategic institutional alliances in knowledge-intensive sectors.
