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PublishedbytheCentreforPolicyDevelopment

©CentreforPolicyDevelopmentandOpenPoliticalEconomyNetwork2019

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AUTHORS

PhilippeLegrainisacriticallyacclaimedwriterandthinker.Apoliticaleconomist,heisthefounderofOpenPoliticalEconomyNetwork(OPEN),aninternationalthinktankonrefugee,migrationandotheropennessissues,andaseniorvisitingfellowattheLondonSchoolofEconomicsandPoliticalScience’sEuropeanInstitute.HeisalsoacommentatorforProjectSyndicate,ForeignPolicy,BBC,AlJazeeraandotherinternationalmediaoutlets.

From2011to2014hewaseconomicadviserandheadoftheteamprovidingstrategicpolicyadvicetoEuropeanCommissionPresident JoséManuel Barroso. Previously, hewas special adviser toWorldTradeOrganisationDirector-GeneralMikeMoore and tradeandeconomics correspondent forTheEconomist.

Philippe is theauthorof fourbest-sellingbooks,notably Immigrants:YourCountryNeedsThem (Abacus,2007),whichwasshortlistedfortheFinancialTimesBusinessBookoftheYearaward.

His two previous studies on refugee economic participation for OPEN and the Tent Foundation are Refugees Work: Ahumanitarianinvestmentthatyieldseconomicdividends(2016)andStepUp:Howtogetrefugeesintoworkquickly(2017).

AndrewBurridgeisanurbanandpoliticalgeographerwhospecialisesinundocumentedmigration,theeffectsofbordersecuritisationandimmigrationdetention,andrefugeereceptionandsettlement.Alecturer inhumangeographyandtheconvenorof the inter-departmental refugeestudiesmajoratMacquarieUniversity,he isalsoresearchcoordinator fortheCitiesandSettlement InitiativeattheCentreforPolicyDevelopment(CPD).

From2013 to2016,hewasbasedat theUniversityofExeter,wherehewas lead researcheronaprojectthatinvestigatedhowasylum-seekerappealoutcomesintheUKvaryacrossdifferenttribunallocations.TheprojectwasafinalistintheEconomicandSocialResearchCouncil(ESRC)CelebratingImpactprizeforoutstandingimpactonpublicpolicy.From2010to2013,hewasamemberoftheInternationalBoundariesResearchUnit,aconsultancybasedatDurhamUniversitythatworkstominimiseconflictassociatedwithinternationallandandseaboundaries.

AndrewreceivedhisPhDfromtheUniversityofSouthernCaliforniain2009,wherehefocusedonhumanitarianaidpracticesintheMexico-USborderlands.Heisco-editorofthecollectionBeyondWallsandCages:Prisons,bordersandglobalcrisis(UGAPress,2012).

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ACKNOWLEDGEMENTS

ResearchassistancewaskindlyprovidedbyLidwinaGundackerandHibaChamasatOPEN.Theauthorswould liketothankeveryonewhocontributedtheirtimeandinsightstothisreport:JockCollins,AndrewKaldor,TerryWilson,PaulPower,CharisMartin-RossandStevenO’Neillfromtheworkinggrouponrefugeeentrepreneurship;TraversMcLeod,AnnabelBrown,LisaButton, Caitlin McCaffrie, Shivani Nadan and all the CPD team; the Council on Economic Participation for Refugees; andeveryonewhokindlyagreedtobeinterviewed.TheauthorswouldliketothankPeterMaresforhiseditingassistance.Wewouldalsoliketothankthefollowingexternalreviewersforprovidingfeedbackonthereport:BronteAdams,ClareHarding,HenrySherrell,HuyTruong,MahirMomand,andRebeccaMeddings.

Thisresearchwouldnotbepossiblewithoutthegeneroussupportof:

ABOUTCPD

TheCentreforPolicyDevelopment(CPD)isanindependent,values-driven,andevidence-basedpolicyinstitute.OurmotivationisanAustraliathatembracesthelongtermnow.CPD’spolicydevelopmentisgearedtowardsanAustraliathatisequitable,aspirational,andtrulyprosperous–andenlivenedbythechallengeofshapingabetterfuture.CPD’scoremodelisthree-fold.Wecreateviableideasfromrigorous,cross-disciplinaryresearchathomeandabroad.Weconnectexpertsandstakeholderstodeveloptheseideasintopracticalpolicyproposals.Wethenworktoconvincegovernment,businesses,andcommunitiestoimplementtheseproposals.CPDhasofficesinSydneyandMelbourneandanetworkofexpertsacrossAustralia.Wearenotforprofit:donationstoourResearchFundaretaxdeductible.MoreinformationaboutCPDisavailableathttps://cpd.org.au/.

ABOUTOPEN

OpenPoliticalEconomyNetwork(OPEN)isaninternationallynetworkedthink-tankthatfocusesonrefugees,migration,tradeandotheropennessissues.Ourmissionistoinform,engageandinfluencebothpolicymakersandpublicdebateonopennessissues.Wearecommittedtoproducingindependent,rigorousandaccessibleresearchandanalysisinpartnershipwithadiverseglobalnetworkofthinkers,expertsandlike-mindedinstitutions.Webelieveinbeingopentotheworld,opentoeveryoneinsociety and open to the future and all its possibilities for progress. More information about OPEN is available athttp://www.opennetwork.net.

ABOUTTHECITIESANDSETTLEMENTINITIATIVE

CPD's Cities and Settlement Initiative (CSI) aims to improve the economic participation of refugees in Australia by helpingrefugeestofindjobsorstartbusinessesmoreeffectively.Ouranalysistellsusthiswoulddeliveratripledividend:benefitingvulnerableAustralians;boostingthebudget;andimprovingcommunitycohesion.Weseekbettergovernanceandcoordinationconnectedtoimprovedpartnershipsanddeliveryatthelocallevel.CSIissupportedbytheMyerFoundation,theVincentFairfaxFamily Foundation, and a small team of volunteers from the Boston Consulting Group (BCG). It follows CPD’s 2017report,SettlingBetter:Reformingrefugeeemploymentandsettlementservices,releasedwithBCG'ssupport.MoreinformationaboutCSIisavailableathttps://cpd.org.au/2018/12/cities-settlement-initiative/

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GLOSSARYABS AustralianBureauofStatistics

ASRC AsylumSeekerResourceCentre

BSL BrotherhoodofStLaurence

CSP CommunitySupportProgram

EU EuropeanUnion

FBW FourBraveWomen

HSP HumanitarianSettlementProgramme

MED MicroenterpriseDevelopmentProgram

MSDUK MinoritySupplierDevelopmentUnitedKingdom

NEIS NewEnterpriseIncentiveScheme

NGO Non-GovernmentalOrganisation

ORR UnitedStatesOfficeofRefugeeResettlement

RFCCMED RefugeeFamilyChildCareMicroenterpriseDevelopment

SEK Swedishkrona

SSI SettlementServicesInternational

TERN TheEntrepreneurialRefugeeNetwork

UTS UniversityofTechnologySydney

NOTEONTHEREPORTCurrencyconversionsinthisreportarebasedontheexchangeratesprevailingon27February2019when1Australiandollar=0.72USdollars=0.54Britishpounds=0.94Canadiandollars=6.64Swedishkrona.

ASPECIALTHANKSAspecialthankstotheA&RKaldorFamilyFoundationfortheirsupportoftheresearchandpublicationofSevenStepstoSUCCESS:Enablingrefugeeentrepreneurshiptoflourish.

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CONTENTSAUTHORS...............................................................................................................................................................2

ACKNOWLEDGEMENTS.........................................................................................................................................3

ABOUTCPD............................................................................................................................................................3

ABOUTOPEN.........................................................................................................................................................3

ABOUTTHECITIESANDSETTLEMENTINITIATIVE.................................................................................................3

GLOSSARY..............................................................................................................................................................4

NOTEONTHEREPORT...........................................................................................................................................4

EXECUTIVESUMMARY...........................................................................................................................................6

Nextsteps................................................................................................................................................................................9

INTRODUCTION....................................................................................................................................................10Countingthebenefits............................................................................................................................................................11Reportstructure....................................................................................................................................................................14

1. AGAINSTTHEODDS:REFUGEESARETHEMOSTENTREPRENEURIALMIGRANTS.....................................15Greaterchallengesthanmost...............................................................................................................................................15Yetmoreentrepreneurial......................................................................................................................................................16Explainingtheparadox..........................................................................................................................................................21

2. SMALLSTARTS,BIGGAPS:CURRENTPOLICIESANDINITIATIVES..............................................................232.1Federalentrepreneurshipprograms...............................................................................................................................242.2Stateentrepreneurshipprograms..................................................................................................................................262.3Entrepreneurshipprogramsforfemalerefugees...........................................................................................................31Promisingbutpatchy.............................................................................................................................................................33

3. RECOMMENDATIONS:SEVENSTEPSTOSUCCESS.....................................................................................35

Step1:Strategicapproach..................................................................................................................................35

Step2:Upskilling.................................................................................................................................................39

Step3:Connections.............................................................................................................................................41

Step4:Capital......................................................................................................................................................42

Step5:EnablingEnvironment.............................................................................................................................45

Step6:SpecificSupport.......................................................................................................................................46

Step7:Spotlightsuccessstories.........................................................................................................................51

4. CONCLUSION...............................................................................................................................................53

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EXECUTIVESUMMARY

WestfieldfounderFrankLowycametoAustraliaasarefugee.Googleco-founderSergeyBrinwasarefugeetotheUnited States. Alongside such exceptional individuals are many more refugee entrepreneurs who own smallbusinessesorareself-employedsoletraders.

Despitethehugechallengestheyface,refugeesarethemostentrepreneurialmigrantsinAustraliaandnearlytwiceas likely tobeentrepreneurs asAustralian taxpayers ingeneral.Yet refugeeentrepreneurshiphardly features inpublicdebateandreceiveslittlepolicysupport.Evenrefugeesettlementandemploymentservicesrarelyrecogniseorencourageit.

Supportingrefugeeentrepreneurshasgreatpotential:anambitiousbutachievabletargetoflaunching1,000newrefugeebusinesseseachyearcouldyield$98millioninannualeconomicandfiscalgains.Withintenyears,theboosttotheeconomycouldbenearly$1billionayear.Therewouldbelargesocialbenefitstoo.

Byfocussingonthesebenefitswearenotsuggestingentrepreneurshipisthebestoronlypathforrefugeestoparticipateintheeconomy.TheCentreforPolicyDevelopment'sCitiesandSettlementInitiativehasmadethecaseformoreeffectivesettlementandemploymentservicesacrosstheboard.Animportantpartofthisreformagendaisgreatersupportforrefugeeentrepreneurs.DrawingonbothAustralianevidenceandinternationalbestpractices,thisreportsetsouthowbesttofostergreaterrefugeeentrepreneurshipinaninclusiveandcost-effectivemanner.WeidentifySevenStepstoSUCCESS.DrawingonbothAustralianevidenceandinternationalbestpractices,thisreportsetsouthowbesttofostergreaterrefugeeentrepreneurshipinaninclusiveandcost-effectivemannerandidentifiesSevenStepstoSUCCESS.Theseinvolveadoptinga:

TheSevenStepsaresummarisedinthegraphiconpage8.

The top priority is to raise awareness of refugees’ remarkable business contribution and potential. LaunchingRefugee Entrepreneur of the Year awards could have an immediate impact.We also identifypromising existinginitiativesthatcouldbereplicatedandexpanded.Substantialchange,though,requiresastrategicapproachtomakeentrepreneurshipaviableoptionforallsuitablerefugees.

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Whethertheyrunashoporacafé,driveforUber,establishthemselvesasanindependentprofessionalorendupbuildingaglobalempire,refugeeentrepreneurscontributetoAustraliansocietyandgainpersonaleconomic,socialandpsychologicalbenefitsalongtheway.

Startingabusinessdoesmuchmorethanprovideajob,anincomeandanopportunitytoearnwealth.Itboostsrefugees’autonomy,self-confidenceandsocialstatus.Itgeneratesasenseofprideandachievement.AndithelpsnewcomerslearnEnglish,buildconnectionsandgivebacktothesocietythathaswelcomedthem.

Refugeeentrepreneurshipalsogeneratesnewproductsandservices.Itcreatesjobsforbothrefugeesandlocals.Itincreaseslocalandinternationaltrade,bringsinmoretaxandcutswelfarespending.Encouragingandcelebratingrefugeeentrepreneurshipwouldhelpdispelfearsthatrefugeesareaburdenorevenathreat.

While Australia has a generally favourable business climate, refugees face greater challenges than otherentrepreneurs.Theyhave typicallyenduredyearsof sufferinganddislocation.Mostarrive speaking littleornoEnglish,with scarcely any savings, few contacts and little knowledgeofAustralian life andbusiness conditions.Whateverskillsorqualificationstheyhavearetypicallynotrecognisedhere,andtheyoftenfacediscriminationtoo.

It isall themoreremarkable that refugeesare themostentrepreneurialmigrants inAustralia.Theygenerateahighermedian incomefromtheirbusinesses thanAustralians ingeneraland,contrary toconventionalwisdom,female refugees are more likely to report income from their own business than men. Refugees aredisproportionately entrepreneurial in other countries too andwhile it is hard to compare data internationally,Australia’srecordlooksprettygoodbycomparison.

Somerefugeesstartabusinessoutofnecessity.Othersspotopportunitiesthatlocalshavemissed.ManytranslatepreviousbusinessexperiencetoanAustraliancontext.Whattheyallshareistherefugeeexperienceitself:afterbeingforcedfromhomeandmakingittoanewlandwheretheydesperatelywanttorebuildtheirlives,theyarealreadyequippedwiththekeyentrepreneurialstrengthsofresilience,risk-takingandresolve.

Yet Australia is only scratching the surface of what refugee entrepreneurs could achieve with appropriateinvestmentandsupport.

Regrettably,federalandstategovernmentsprovidelittlespecificsupportforrefugeeentrepreneurship.Programsto help refugees become economically active tend to focus on employment and neglect entrepreneurship –includingthemanypeoplewhocombineself-employmentorrunningasmallbusinesswithapart-timejob.

Generalentrepreneurshipprograms,suchasthefederalgovernment’sflagshipEntrepreneurs’ProgrammeanditsNewEnterpriseIncentiveScheme(NEIS),whichhelpstheunemployedstartbusinesses,areopentorefugees.Buttheydonotcaterforrefugees’specificneeds,notablyforlanguagetraining.

SoitiswelcomethatNEIS’snewHighlyDisadvantagedTrial,whichfocusesexclusivelyonrefugeesandmigrants,provides flexible training, enhancedmentoringandwide-ranging support, includingwithEnglish.At state level,LaunchVic, an independent agency established by the Victorian government to support the local start-upecosystem, is funding five projects specifically for refugee andmigrant entrepreneurs in businesses with highgrowthpotential.

Innovativenon-governmentalorganisationsfosterrefugeeentrepreneurshiptoo,bothaspartofgeneralprogramstoencouragerefugees’economicparticipationandonastand-alonebasis.PromisingventuresincludeSettlementServices International’s Ignite Small Business Start-ups, Thrive Refugee Enterprise and the Brotherhood of StLaurence’s Stepping Stones to Small Business (which is specifically for female migrants and refugees). ButunfortunatelytheselackscaleandfundingandaremostlylimitedtoSydneyandMelbourne.

Toimproveonthissituationinasystematicway,thisreportadvocatesSevenStepstoSUCCESS.Thesesevensteps,eachofwhichconsistsofthreerecommendations,formacoherentpackage,withkeyprioritiessetoutbelow.

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SevenStepstoSUCCESS Recommendations

Strategicapproach

Allpublic-fundedinitiativesthathelprefugeestobecomeeconomicallyactiveshouldpresententrepreneurshipasaviableoption,aboutwhichsuitablerefugeescanmakeinformedchoices.

1. Integrateself-employmentandbusinessformationpathwaysintotheeconomicparticipationstrategiesofrefugeesettlementandemploymentservices.

2. Includeastrategythataddressesrefugeeentrepreneurs’particularneedsandchallengesinexistingprogramstoencourageentrepreneurship.

3. Providetargetedandtimelysupportforprospectiverefugeeentrepreneurs,notablythroughanearlyassessmentoftheirentrepreneurialpotential.

Upskilling

Prospectiveentrepreneursneedsuitabletrainingtorealisetheirambitions.

4. Offerprospectiverefugeeentrepreneursappropriatebusinessandlanguagetraining.

5. Offerskilledrefugeessmallloanstoenablethemtoobtainlocallicensesandqualifications,andthusbecomeself-employedorsmallbusinessowners.

6. Incubatorsforrefugeeentrepreneursshouldconsiderofferingpart-timeemploymentopportunitiestoentrepreneurswiththeirbusinesspartners.

Connections

Supportivenetworksarealsocrucialforrefugeeentrepreneurs.

7. Establishanonlineplatformtohelpconnectrefugeeentrepreneurstoeachotherandtonetworksequippedtohelpthem.

8. Createanetworkforthesharingofbestpracticesabouthowtosupportrefugeeentrepreneurship.

9. Providerefugeeentrepreneurswithstructuredhelpinconnectingtopotentialcustomersandmarkets.

Capital

Alackoffundingisperhapsthebiggeststumblingblockforprospectiverefugeeentrepreneurs.

10. Provideaccesstocapitalthroughpartnershipswithfinancialprovidersasacomponentofsupportprogramsforrefugeeentrepreneurs.

11. Encourageadiversityoffundingsources,withtheoverarchingaimofgreatlyincreasingrefugeeentrepreneurs’accesstocapital.

12. Provideloanguaranteesbackedbyfederalandstategovernmentstoenablerefugeeentrepreneurstoobtainlow-costloansfromcommercialbanks,togetherwithpartnerssuchasThrive.

Enablingenvironment

Liftingregulatoryandwelfarebarriersisalsoimportantforencouragingrefugeeentrepreneurship.

13. Lowerfederalandstateregulatorybarriersthatimpedeentrepreneurshipbyrefugeesandotherdisadvantagedgroups.

14. Continueprovidinggovernmentwelfaresupporttorefugeeentrepreneursforthefirstyearaftertheirbusinesslaunch.

15. Createadditionalvisaplacesforwould-berefugeeentrepreneurstocometoAustraliaviathebusinesstalentpathway.

Specificsupport

Tobeeffective,assistanceneedstobeproperlytargeted.

16. Targetsupportforrefugeeentrepreneursatdifferentstagesofbusinessdevelopment.

17. Provide,wherepossible,intensive,one-on-one,ongoingsupportinthepre-incubatorandacceleratorstages,leveragesupportfromincubatorhubsandvolunteernetworkstokeepcostsdown.

18. Targetsupportattheneedsofspecificgroups–notablyyoungpeople,womenandrefugeesinregionalandruralareas.

Spotlightingsuccessstories

Recognisingrefugeeentrepreneurs’achievementsandcommunicatingthemmorewidelyarevital.

19. Celebratesuccessfulrefugeeentrepreneursasrolemodels,toinspireotherrefugeesandtocreateamorepositivenarrativeaboutrefugeesinAustralia.

20. CreateanannualRefugeeEntrepreneuroftheYearawardsprogram.

21. EncouragelocalareaswithsubstantialrefugeecommunitiestodeveloplocalCommunityHeroawards.

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Nextsteps

To create the conditions for meaningful change, the immediate priority is to raise awareness of the outsizedcontribution and huge potential of refugee entrepreneurs among policymakers, practitioners and the public.PublicisingthefindingsofthisreportandlaunchingRefugeeEntrepreneuroftheYearawardswouldbeagoodstart.

Beyond that, onepath forward is to improve, replicate andexpand thepiecemeal butpromising initiativesweidentify,suchasThrive,Ignite,SteppingStonesandNEIS’sHighlyDisadvantagedTrial.

However,deliveringsubstantialchangeacrossAustraliarequiresastrategicapproachthatmakesentrepreneurshipaviableoptionforallsuitablerefugees.Measuressuchasassessingrefugees’entrepreneurialaptitudepromptly,providingappropriateinformationandtraining,andcreatingonlineplatformsforknowledgesharingoughttobereadilyachievable.

Trickier, but also crucial, aremeasures that requiremore public funding, notably to enable skilled refugees toacquirelocalqualifications,toguaranteesmall-businessloansandtomaintainwelfarepaymentstoentrepreneursintheirfirstyearofstartingabusiness.Yettheupfrontcostwouldquicklypayforitselfbyyieldinglargefinancial,economicandsocialreturnsforlocalcommunitiesandsociety.

Underpinningallourrecommendationsisachangeofmindset.Refugeesshouldbeviewednotaspassiverecipientsofassistancebutasdynamicactors.Withahandupandtheirownhardwork,theycanandwillflourish.

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INTRODUCTION

RefugeescanmakeagreateconomiccontributiontoAustralia–notjustasemployees,butalsoasentrepreneurs.

Thefoundersofsomeoftheworld’smostsuccessfulenterpriseswererefugees,includingGoogleco-founderSergeyBrin,hedge-fundmanagerandphilanthropistGeorgeSorosandHongKongmagnateLiKa-shing.

Australia’sstandoutrefugeeentrepreneursincludeFrankLowy,HarryTriguboff,TanLeandHuyTruong(picturedbelow first, third, second and fourth from the left, respectively). Lowy,who fled post-war Czechoslovakia, co-founded the international shopping-centre groupWestfield andwas listed in 2016 as Australia’s fourth-richestperson,withanetworthofUS$5billion.1Triguboffisasecond-generationrefugee.HisparentsfledfromRussiatoChinaandheescapedtheCommunisttakeovertheretocometoAustraliaasateenager.FounderoftheMeritonpropertydevelopmentgroup,TriguboffrankedthirdonAustralia’s2016richlist,withanetworthofUS$6.9billion.2

TanLe,arefugeefromVietnam,co-foundedEmotiv,whichproducesheadsetsthatreadbrainsignalsandfacialmovementstocontroltechnologyincomputergamesandapps,andwas1998YoungAustralianoftheYear.3HuyTruong,whoarrivedinAustraliaattheageofsevenonasmallfishingboatcarrying40otherVietnamesepeople,wentontofoundonlinegiftingsiteWishlistHoldings,private-equitygroupYarraCapitalPartners,andspecialistinsurerA.L.I.Group.4

Theseextraordinarysuccessstorieshighlightthehugecontributionthatrefugeescanmakeandcanhelpdispelthemyth that refugees are victims and charity cases. Superstar entrepreneurs can also be role models for otherrefugees,andindeedforallAustralians.

Buttheyarenottypical.Mostentrepreneursaresmallbusinessownersorself-employedsoletraders.Theyownrestaurants, shops and farms. They are sub-contractors in construction or deliver social services. And they areindependentITconsultants,dentists,Uberdrivers,cleanersandmuchelsebesides.

Thisstudydefinesrefugeeentrepreneursinasuitablybroadmanneraspeoplewhoarrivedonahumanitarianvisa,orwhoobtainedrefugeestatusinAustralia,andwhohaveanAustralianBusinessNumber(ABN).Theycouldbeanemployerorself-employed.

1https://en.wikipedia.org/wiki/List_of_Australians_by_net_worth2Idem3“Asylumseekerscouldbeournextwaveofentrepreneurs”,TheConversation,26October2015http://theconversation.com/asylum-seekers-could-be-our-next-wave-of-entrepreneurs-495914https://www.bloomberg.com/research/stocks/private/person.asp?personId=34562673&privcapId=51616398

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Countingthebenefits

Entrepreneurshipcanprovidebigbenefitsforbothrefugeesandsociety.Forrefugees,thebenefitsareeconomic,socialandpsychological:

• Economic.Startingabusinessprovidesajob,anincomeandthepotentialtoaccumulatewealth.• Social.Runningabusinessbuildsconnectionswithothers,notablycustomers,employees,suppliers,the

localcommunityandlocalauthorities.ItalsohelpsrefugeeslearnEnglish.• Psychological.Beingabusinessownerprovidessocialstatus,asenseofachievement,autonomyandpride

ingivingsomethingbacktothecountrythathaswelcomedthem.

Forsociety,refugeeentrepreneursgenerateeconomic,fiscalandsocialbenefits.Theyprovidevaluableproductsandservices.Theycreatejobs,bothforrefugeesandothers.Theyboostbothlocaleconomiesandinternationaltrade.Theypaytaxesandreducewelfareoutlays.Morebroadly,theymakeavisiblecontributiontosocietyandademonstrablecommitmenttothelocalcommunitythathelpstodispelmisperceptionsthatrefugeesareaburdenorathreat.

Facilitating the launch of many more refugee-ownedbusinesses would deliver large economic and fiscalbenefits. We estimate that the average economic andfiscalboostofeachsuccessfulnewenterpriseisatleast$98,200 a year. An ambitious but achievable target oflaunching1,000newrefugeebusinessesannuallycouldyieldatleast$98millioninthefirstyear,$184millioninthesecondyear,andsoon.Withintenyears,thiswouldaddnearly $1billion a year to theAustralian economy(Box 1). If some of those businesses were to fail, thecumulativebenefitswouldbesmallerbutstillsubstantial.The net gains would greatly outweigh the one-offinvestmentof$10,000oreven$20,000tohelppromisingrefugeesstartabusiness.

Image1

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Box1:EstimatingtheeconomicbenefitsofrefugeeenterprisesRefugeebusinesses provide economic, fiscal and social benefits toAustralia. They create economic gains by providingprofitstotheirowner(s)andwagestotheiremployees(whichareacosttothebusiness,butabenefittosocietyasawhole).Thesizeofthisaddedvaluevariesimmensely.Asoletraderwithamarketstallmayearn$15,000ayear,whileabigglobalcompanygeneratesmillionsinprofit.

Weassumethatonaverageeachrefugeebusinessearns$20,000ayearinpre-taxprofits5andcreates1.2jobs(includingthebusinessowner).6Assuming(conservatively)thatthosejobspaytheminimumwageof$719.20aweek,or$37,398ayear,eachbusinesspays$44,878ayearinwages.Thismeansthateachrefugeeenterprisecreates$64,878ofaddedvalueannually (seeTable1). These figuresunderestimate the trueeconomic valueof refugeeenterprises, since they ignoreknock-onbenefitsofsuchthingsasnewideasandcompetitivepressuresonotherfirmsthatincreaseproductivity.

Thefiscalgainsarelowerwelfarespendingandhighertaxrevenuesaspreviouslyunemployedrefugeeswhoformerlyreliedonwelfarebecometaxpayingsmallbusinessowners.Weassumethateachrefugeebusinesssavesthegovernment$33,333inwelfarepaymentsandgeneratesanadditional$9,877intaxrevenues,throughcorporationtaxonbusinessprofitsandincometaxonemployeewages.7Sothedirectfiscalbenefitofeachrefugeebusinessaverages$43,211ayear.Again,therealgainswouldbegreater,sincethesecalculationsignoretheknock-onbenefitssuchasthehighertaxpaymentsbythesuppliersofrefugeebusinesses.Theyalsoomitgoodsandservicestax(GST),whichmustbechargedoncebusinesseshaveanannualturnoverthatexceeds$75,000.

Intotaltheeconomicandfiscalbenefitsofeachnewrefugeebusinessaddupto$98,211assetoutinFigure1(sincethe$9,877 in tax revenuesarealreadycountedaspartof theeconomicvalueadded, theyaren’tcountedagainwhen theeconomicandfiscalgainsareaddedtogether).Inadditiontherearesocialbenefitsthatarehardtomeasureindollars,suchasstrongercommunitiesandhappier,moreself-confidentandself-reliantrefugees.

Table1.Economicandfiscalbenefitsofrefugeeenterprises

Economicvalueadded Ownerwages $37,398.40 52weeks@$719.20/weekEmployeewages $7,479.68 0.2jobs@$719.20/weekProfitbeforetax $20,000.00 Totaleconomicvalueadded $64,878.08

Fiscalgains Corporationtax $5,500.00 27.5%ofprofitbeforetaxIncometax $4,377.24 19%ofwagesabove$18,200thresholdTotaltaxrevenues $9,877.24 Welfaresavings $33,333.33 Totalfiscalgains $43,210.57

Totaleconomicandfiscalgains $98,211.41 Economicvalue-added+welfaresavings

Source:authors’calculations

5ThisestimationisbasedonfiguresfromThriveRefugeeEnterpriseabouttherefugeebusinessestowhichithaslent.However,someofthespecificassumptionsaretheauthors’own.6Thrivehaslentto133businesses,whichhavecreated158jobssofar,anaverageof1.2jobseach.7Thriveestimatesthatevery30refugeebusinessessave$3millioninCentrelinkpaymentsover3years,whichimpliesthateachrefugeebusinesssaves$33,333ayearinwelfarepayments.TheseincludesavingsonNewstartpaymentstoentrepreneursandtheirpartnersandFamilyTaxBenefit.

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Figure1.Estimatedaddedvalueofrefugeeenterprises

Source:authors’calculations

Howmanyrefugee-ownedbusinessesmightrealisticallybelaunchedwiththeappropriatesupportandfunding?Toanswerthisquestion,weneedtolookathowmanyrefugeesarriveinAustraliaandwhatproportionofthemmightbecomeentrepreneurs.

Australiawillgrantaround20,000humanitarianvisasin2018-19.(Thegovernmenthasallocated18,750placestotheRefugeeandHumanitarianProgramme;andonrecentexperienceanother1,250visasarelikelytobegrantedonshore.)Basedonpasttrends,around80%ofthatannualintake,or16,000people,arelikelytobeofworkingage.

The Global Entrepreneurship Monitor estimates that 14.6% of Australia’s adult working-age population wereactivelyengagedinstartingandrunningnewbusinessesin2016.Ifasimilarproportionofnewrefugeeseachyearweretostartbusinesses,thatwouldbe2,336people.

Inadditiontotheannualinflow,thereistheexistingrefugeepopulation.Somehavealreadystartedbusinessesandmanymorecoulddosowithappropriatesupportandfunding.Asof2016,therewere173,871permanentmigrantswhowereofworkingageandwhohadenteredAustraliaonahumanitarianvisa(orobtainedoneonshore)since2000.Ifonly1%ofthoseresidentrefugeesstartedabusinesseachyear,thiswouldamountto1,739additionalbusinesses.

Addingthesenumberstogether,itseemsfeasiblethatatleast4,000refugeeenterprisescouldbestartedannually.Sosettinganinitialtargetoflaunching1,000ayearseemsrealisticandachievable.

Refugeeentrepreneurshiphasplentyofpotential.Yetitscarcelyfeaturesinpublicdebateandthereislittlespecificpolicy support for refugee entrepreneurs. Even providers of settlement and employment services for refugeesrarelyrecognise,letaloneencourage,entrepreneurship.

Thisstudy,whichfollowsonfromCPD’sSettlingBetterreport(2017),aimstochangethissituation.9ItdrawsonresearchandevidencefromAustraliaandotheradvancedeconomiestohighlightthesubstantialcontributionofrefugeeentrepreneursandtheirhugefuturepotential.ItdetailstheprogramsthatalreadyexistinAustraliatohelprefugeeentrepreneursandanalyseswhatwearedoingwellandwhatwecoulddobetter.Itpresentscasestudies

9CentreforPolicyDevelopment,“SettlingBetter:Reformingrefugeeemploymentandsettlementservices”,2017https://cpd.org.au/wp-content/uploads/2017/02/Settling-Better-Report-20-February-2017.compressed.pdf

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of successful andpromising initiatives andprofiles some refugeeentrepreneurs.Drawingon international bestpractices,itsetsoutrecommendationstoenablerefugeeentrepreneurstoflourishinAustralia.TheseSevenStepstoSUCCESSrangefromideasthatcouldbeimplementedquicklytomoreambitiousreformsthatwilltakemoretime.

Reportstructure

Section1laysoutthecurrentstateofplayforrefugeeentrepreneurshipinAustralia.

Section2detailsandanalysesprogramsthatalreadyexisttosupportrefugeeentrepreneurshipinAustralia.

Section3drawson theAustralianexperienceand leadingexamplesof support for refugeeentrepreneurship inothercountriestodevelopapackageof21recommendationsformulatedasSevenStepstoSUCCESS.

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1. AGAINSTTHEODDS:REFUGEESARETHEMOSTENTREPRENEURIALMIGRANTS

Byinternationalstandards,Australiahasagenerallyfavourablebusinessclimate.TheWorldBankranksitseventhgloballyfortheeaseofstartingabusinessand14thfortheoveralleaseofdoingbusiness.10

That isaplus forentrepreneurs, includingthosewhoarerefugees.Businessstart-uprates tendtobehigher incountrieswhereitisrelativelyeasytostartabusiness,suchastheUnitedStates,thaninthosewithmoreredtape,suchasGermany.11 In2016, theGlobalEntrepreneurshipMonitor found the levelofentrepreneurialactivity inAustraliain2016wasamongthehighestofalldevelopedeconomies.12

Greaterchallengesthanmost

However, refugees also facemuch greater challenges than locals in becoming entrepreneurs. They have beenforcedoutoftheirhomelandandhavetypicallyexperiencedyearsof immensesufferingandfamilydislocation.They tend to arrive in Australia speaking little or no English, with scarcely any money, contacts, recognisedqualificationsorknowledgeofAustralianlifeandbusinessconditions.Andinadditiontolackinghuman,socialandfinancial capital, theymay face discrimination as non-white foreigners, as refugees and, in the case of femalerefugees,aswomen.Theirchallengescanbesummarisedasfollows.

o Humancapital

o Language.Refugeeswhodon’tspeakEnglishmaybeabletostartsmallbusinessesthatservealocalethniccommunitysuchascafésorhairdressingsalons.Butseizingbusinessopportunities often requires greater fluency, as do the formalities of registering abusiness,complyingwithregulationsandpayingtax.

o Skills. Refugeesmay lack skills the Australianmarket needs, or their skills and theirqualificationsmaynotberecognised.Forexample,theskillsofamechanicfromSyriamaynotcover,ormaynotbeconsideredadequate,forworkingontheelectronicsthatexistincarsinAustralia.

o Businessnorms.ManyrefugeescomefromcountriesintheMiddleEast,AfricaandAsiawhere the informalbusiness sector is thenorm,and so lack theexperienceofdoingbusinessinamoreregulatedAustralianenvironment.13

o Self-confidence.Asnewcomersinastrangelandwhoseliveshavebeenturnedupsidedown,refugeesmayinitiallylackconfidenceintheirabilities.

o Socialcapital

o Contacts.Newly arrived refugees typically lack a network of local business contactscapableofactingasmentors,suppliersorclients.

o Familynetworks.Manyrefugeeshavebeenseparatedfromtheirfamily,whomayhavediedorarenotabletojointhemtoAustralia.Thismakesithardertostartsmallfamilybusinesses.

10WorldBank,DoingBusiness,2018http://www.doingbusiness.org/11See,forinstance,GlobalEntrepreneurshipMonitordata.12GlobalEntrepreneurshipMonitor,GEMAustraliaNationalReport2016-17https://www.gemconsortium.org/country-profile/3713JockCollins,“Privateandcommunitysectorinitiativesinrefugeeemploymentandentrepreneurship”,LowyInstitute,20December2017https://www.lowyinstitute.org/publications/private-and-community-sector-initiatives-refugee-employment-and-entrepreneurship

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o Ethnic networks. Refugees from smaller, more recent and more disparate refugeecommunitieshavethinnersupportnetworksinAustraliaandasmallerpotentialmarketfortheirethnicbusinesses.

o Financialcapital

o Savings.MostrefugeesarriveinAustraliawithscarcelyanysavings.Theyarelikelytobeunemployedinitiallyandmaythendolow-paidwork,makingithardtosaveenoughtostartabusiness.

o Accesstocredit.Refugeestypicallylackacredithistorythatwouldenablethemtoseekasmall-businessloanfromthebankandtendtolackassetssuchaspropertythatcouldbepledgedascollateral.

Yetmoreentrepreneurial

Despitethehugehurdlesthattheyface,refugees—whohavebeenselectedforadmissiontoAustraliaonthebasisofhumanitarianneedratherthaneconomicaptitude—arethemostentrepreneurialmigrantsinAustralia,andincreasinglyso(Figure2).Weexplainwhylaterinthissection.

Figure2.Shareoftaxpayersreportingincomefromanunincorporatedbusiness,2013-14(%)

Source:PersonalcalculationsfromAustralianBureauofStatistics(ABS),PersonalIncomeTaxandMigrantsIntegratedDataset(PITMID),2013-14

In2009-10,humanitarianmigrantswhohadarrivedinAustraliasince2000earned9.3%oftheirincomefromtheirownunincorporatedbusiness.14Thatproportionroseto14%in2013-14.15Whereasin2009-10,15.5%ofrefugeesreportedincomefromtheirownbusiness,thisjumpedtomorethanaquarter(25.6%)in2013-14.Bycontrast,only

14AustralianBureauofStatistics,“3418.0-Personalincomeofmigrants,Australia,2009-10”,6September2017http://www.abs.gov.au/AUSSTATS/abs@.nsf/allprimarymainfeatures/8800F9BC6CCB7830CA257F0F00115759?opendocument15AustralianBureauofStatistics,“3418.0-Personalincomeofmigrants,Australia,2013-14”,27July2017http://www.abs.gov.au/AUSSTATS/abs@.nsf/DetailsPage/3418.02013-14?OpenDocument

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11.8%ofmigrantswhohadarrivedonaskilledworkvisasince2000and14.8%offamily-visamigrantsreportedincomefromtheirownbusinessin2013-14,thelatestyearforwhichdataisavailable.16

Refugeesarenotonly themostentrepreneurialmigrants; theyare farmore likely to start abusiness than theAustralian population as whole. Since 14.6% of Australian taxpayers report income from their own business,refugeesarenearlytwice(1.75times)aslikelytobeentrepreneursasAustraliantaxpayersoverall.17

In2013-14,18,336humanitarianmigrantsearned$346millionfromtheirownunincorporatedbusinesses,withamedianincomeof$15,716.18Ofthose,4,053(22.1%)camefromAfghanistan,3,572(19.5%)fromSudanand2,108(11.5%)fromIraq(Figure3).19ThehumanitarianmigrantswiththehighestmedianincomefromtheirownbusinesswerefromChina($21,028),Afghanistan($19,245)andIran($15,933).20

Figure3.Whererefugeeentrepreneursoriginate,2013-14(%)

Source:ABS

Contrarytowidespreadperceptions,theABSdatasuggeststhatin2013-14femalerefugeesearnedaslightlyhigherproportionoftheirincome(16.1%)fromtheirownbusinessthanmalerefugees(13.1%).Theywerealsomuchmorelikely(30.3%)toreportincomefromtheirownbusinessthanmen(23.2%).21However,theirmedianincomefromtheirownbusinesswaslower:$13,367comparedto$17,788.22Theagedistributionofmaleandfemalerefugee

16Ibid,Table4.AllthedataintherestofthissectionisfromarecenteffortbytheAustralianBureauofStatistics(ABS)tointegrateitsdatasetsforpersonalincometaxandmigrants,withthemostrecentdataavailablebeingfor2013-14.17Ibid,Table11.OneimportantcaveatisthattheAustralianTaxOffice(ATO)databasehassomelimitstoitscoverage.Peoplewhoreceiveanincomebelowthetax-freethreshold($18,200in2013-14)arenotnecessarilyrequiredtolodgeataxreturnandthiscanincludepeoplewhoderivetheirincomefromgovernmentpensionsandallowances.Inaddition,someAustraliangovernmentpension,benefitandallowancepaymentsareexemptfromincometaxandthereforerecipientsarenotrequiredtoincludethisincomeintheirtaxreturns.Consequently,thecoverageofalllow-incomeearnersisincompleteandgovernmentpensionsandallowancesareexcludedfromthedata.Inpractice,then,theentrepreneurshipratesamongbothrefugeesandthepopulationasawholearelikelytobelowerthanthestatedfigures,sincesomelow-incomerefugeesandAustraliansofworkingagedonotfiletaxreturns,andnordosomepensioners–althoughsomenon-taxpayersmayhave(low)businessincome.IntermsoftherelativeproportionsofrefugeeandAustralianentrepreneurs,refugeesaremorelikelytohavelowincomesandAustraliansaremorelikelytobepensioners,sowithoutcompletedataitisdifficulttosayhowtherelativefindingswouldbeaffected.18Ibid,Table119Ibid,Table2.320Idem21Ibid,Table3.322Idem

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entrepreneurswassimilar23andmostwererelativelyyoung:thebiggestcohort,37.5%,wereaged25-34,while33%wereaged35-44and14.3%wereaged45-54.24

Themain industries inwhich refugee entrepreneurs started businesseswere health care and social assistance(34.8%), construction (24.9%) and transport, postal and warehousing (10.8%).25 In terms of income, refugeeentrepreneurs derived 33.4% of their business income from construction, 31.9% from healthcare and socialassistance,and9.5%fromtransport,postalandwarehousing.

Datafrom2009-10suggestedthat,whereastheentrepreneurshipratesofskilledandfamilymigrantsrosegraduallyintheyearsaftertheirarrival,theentrepreneurshiprateofrefugeeshoveredaround10%forthefirstfiveyearsandthensoaredtoovertaketheratesofothermigrants,reachingamuchhigherplateauaround27%aftereightyears’ residence (Figure 4). According to the latest data from 2013-14, though, the entrepreneurship rate ofhumanitarianmigrantsimmediatelyexceedsthatofothermigrantsandthenrisesonlygraduallyovertime(Figure5).Onepossibleexplanationmaybethatrefugeeentrepreneursaremakinggreateruseoftherecentriseofthegigeconomy;Uber, for instance, launched in Sydney inOctober2012and started itspeer-to-peer ride-sharingservicein2014.

Figure4.Proportionofmigrantsreportingown-businessincome,byyearssincearrivalinAustralia,2009-10(%)

Source:PersonalcalculationsfromABS

23Ibid,Table3.324Ibid,Table3.325Ibid,Table6

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Figure5.Proportionofmigrantsreportingown-businessincome,byyearssincearrivalinAustralia2013-14(%)

Source:PersonalcalculationsfromABS

Intermsofregionaldistribution,6,726refugeeentrepreneurswereinVictoria(36.7%),5,382inNewSouthWales(29.4%)and2,220inQueensland(11%)(Figure6).26

Figure6.Regionaldistributionofrefugeeentrepreneurs,2013-14(%)

Source:ABS

ThehighestrefugeeentrepreneurshipratewasalsoinVictoria(30.1%),followedbyQueensland(26.3%)andSouthAustralia(25.4%),withmuchlowerratesinTasmania(16.2%),AustralianCapitalTerritory(15.9%)andNorthernTerritory (11.5%) (Figure 7).27 In Victoria the refugee entrepreneurship rate was twice that of the taxpayer

26Ibid,Table1127Idem

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populationas awhole, and itwasat least50%higher than the taxpayeraverage inall other statesexcept theNorthernTerritoryandTasmania.28

Figure7.Refugeeentrepreneurshipratebyregion,2013-14(%)

Source:ABS

In2013-14,refugeeshadalowermedianincome($30,277)thanAustraliantaxpayersasawhole($45,904).29Butrefugeeshadahighermedianincomefromtheirownbusinesses($15,716)thanAustraliantaxpayers ingeneral($10,960),andtheneitherskilledmigrants($11,717)orfamilymigrants($13,559).

Inshort,theoverallpictureforrefugeeentrepreneursinAustraliaisbroadlypositive.Againsttheodds,refugeesaredisproportionatelyentrepreneurial.Thesameistrueinmanyothercountries(Box2).

28Idem29Ibid,Table12.

Image2

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Box2:Refugeeentrepreneurshipinotheradvancedcountries

Thereisampleinternationalevidencethatimmigrantsgenerallytendtobemuchmoreentrepreneurialthanlocals.InBritain,forinstance,migrantsarenearlytwiceaslikelytostartabusinessaspeoplebornintheUK.30

Whileinternationalstatisticsonrefugeeentrepreneurshiparesporadic,theavailabledatashowsthatrefugeestendtobeparticularlyentrepreneurial.IntheUnitedStates,forinstance,therefugeeentrepreneurshiprateof13%ishigherthanboththatofothermigrantsandpeoplebornintheUS.31

IntheUK,migrantsaremorelikelytobeself-employedthanpeopleborninBritain,andrefugeesarethemostlikelytobeso.32Some28%ofrefugeemenwereself-employedin2012-13.33

InCanada,14.4%ofrefugeesarebusinessowners,aproportionthatisonaparwitheconomicandfamilymigrants.34However,refugeesaremuchmorelikelytobeself-employedthaneconomicmigrantsandpeopleborninCanada.

It ishardtocompareAustraliandatawithdatafromothercountries,notleastbecauseitcoversonlyunincorporatedbusinessincome,butalsobecauseitcoversonlythosewithsufficienttaxableincometoneedtofileataxreturn.Withthatbigcaveat,refugeeentrepreneurshipratesinAustralialookstrongbyinternationalstandards.

Explainingtheparadox

Giventhattheyfacehugechallengesandreceivelittlespecificsupport,whyarerefugeessooftenentrepreneurs?

Necessity is one reason. As CPD’s Settling Better35 report identified in Australia, and OPEN’s Step Up36 studyhighlighted internationally, refugees face many barriers to employment. Working for yourself may thus be aresponsetoalackofformaljobopportunities.Butthisessentiallynegativeframingofrefugeeentrepreneurshipisatbestapartialexplanation.GiventhatmostrefugeesinAustraliadon’tfindajobwithinfiveyearsofarrival,whydosomestartabusinessandnotothers?Also,whyarerefugeesmorelikelytostartabusinessthanunemployedAustralians?

Personalattributesandexperiencemustbeimportanttoo.Peoplewhohavebeenforcedfromtheirhomeandtheircountry, suffered immense hardship andmade it to Australia tend to be resourceful and resilient. They havedemonstratedawillingnesstotakerisks,infleeingtheircountryandmovingontoAustralia.Havingarrived,theytendtobedesperatetoworkhard,rebuildtheirlives,becomeself-reliantandcontributetothecountrythathaswelcomed them. Resilience, risk-taking and resolve are three of the key personal attributes for would-beentrepreneurs. Many refugees also have business experience of some kind, albeit often in informal or familybusinesses.

30CentreforEntrepreneurs,“MigrantEntrepreneurs:Buildingourbusinesses,creatingourjobs”,201431NewAmericanEconomy,“FromStruggletoResilience:TheeconomicimpactofrefugeesinAmerica”,June2017http://research.newamericaneconomy.org/wp-content/uploads/sites/2/2017/11/NAE_Refugees_V6.pdf32OfficeforNationalStatistics,“SurveyofnewrefugeesintheUnitedKingdom,2005-2009”,https://discover.ukdataservice.ac.uk/catalogue/?sn=655633OfficeforNationalStatistics,“ThereasonformigrationandlabourmarketcharacteristicsofUKresidentsbornabroad:datatables”,2014,TableA7https://www.gov.uk/government/publications/the-reason-for-migration-and-labour-market-characteristics-of-uk-residents-born-abroad.Insufficientdatawasavailableforwomen34https://www.statscan.gc.ca/eng/blog/cs/immigrant-entrepreneurs35CentreforPolicyDevelopment,“SettlingBetter:reformingrefugeeandemploymentservices”,February2017https://cpd.org.au/2017/02/settlingbetter/36PhilippeLegrain,“StepUp:Howtorefugeesintoworkquicker”,OpenPoliticalEconomyNetworkandtheTentFoundation,August2017http://www.opennetwork.net/step-get-refugees-work-quickly/

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Opportunity is another positive driver of refugee entrepreneurship. People with diverse perspectives andexperiencesaremorelikelytospotgapsinthemarkettoprovideforboththelocalandthewidercommunity.Forexample, Vietnamese refugees in the US were the first to open nail salons there. Others helped populariseVietnamesecuisine.DavidTran,whofledVietnamin1979andarrivedintheUSfromarefugeecampthefollowingyear,establishedHuyFongFoods.ItsleadingproductisSrirachaHotChiliSauce,theredbottlethatyouseetodayinmostVietnameserestaurants.

ManyrefugeesinAustraliabecomeentrepreneursagainsttheodds.Morecoulddosowithappropriatesupport.InSection2welookatwhatprogramsalreadyexistandhowcouldtheybeimproved.

Image3

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2. SMALLSTARTS,BIGGAPS:CURRENTPOLICIESANDINITIATIVES

TherearemanyprogramsandinitiativesacrossAustraliatohelprefugeesbecomeeconomicallyactive,buttheytendtofocusonemploymentandneglectentrepreneurship.

Federal, state and local governments rarely acknowledge self-employment and business formation as a viableoptionforrefugees,letaloneofferspecificsupport.Morebroadly,theygenerallyfailtorecognisethenatureofthemodernAustralianlabourmarket,wherearefugee(orindeedanAustralian-borncitizen)mayhaveapart-timejobwhilealsodrivingforUberandrunningabusinessimportingproductsfromoverseas.

Fortunately, non-governmental organisations (NGOs) are stepping into the breach. Innovative schemes areproliferating,withpromisingapproachestosupportingandpromotingrefugeeentrepreneurship.Buttheytypicallylackscaleandfunding,andhaveverylimitedgeographiccoverage.Muchmoreneedstobedone.

Supportforrefugeeentrepreneurshipcouldbeprovidedinatleastfivedifferentways,through:

1. General programs to encourage entrepreneurship, such as the federal government’s Entrepreneurs’ProgrammeanditsNewEnterpriseIncentiveScheme(NEIS);

2. Specificschemesforrefugeesthatarepartofgeneralprogramstoencourageentrepreneurship,suchasNEIS’sHighlyDisadvantagedtrial;

3. General programs to improve refugees’ economic participation, such as the federal government’sHumanitarianSettlementProgramme(HSP);

4. Specificschemestoencourageentrepreneurshipthatarepartofgeneralprogramstoimproverefugees’economic participation, such as Ignite Small Business Start-ups launched by Settlement ServicesInternational(SSI);

5. Specificschemesthatarestand-alone,suchasThriveRefugeeEnterprise.

Table2setsoutthecharacteristicsofexistingprograms.

Table2.Programsthat(could)supportrefugeeentrepreneurship

Program Type Funder/ProviderGeographical

scopeLaunched Focus

Entrepreneurs’Programme37

1 Federalgovernment-funded

National 2014 Establishedentrepreneurs

NewEnterpriseIncentiveScheme(NEIS)38

1 Federalgovernment-funded

National 1985 Unemployedwould-beentrepreneurs

NEISHighlyDisadvantagedTrial39

2 Federalgovernment-funded

National 2018 Refugee&migrantentrepreneurs

LaunchVicfunds5projectstoencouragerefugee&migrantentrepreneurship40

2 Independentstate-governmentfundedagency

Victoria 2017 Refugee&migrantentrepreneursinhigh-growthstart-ups

IgniteSmallBusinessStart-ups41

4 NGO(SettlementServicesInternational)

Sydney,Queensland*

2013 Refugeeentrepreneurs

37https://www.business.gov.au/assistance/entrepreneurs-programme38https://www.jobs.gov.au/self-employment-new-business-assistance-neis39https://docs.jobs.gov.au/documents/additional-services-neis-highly-disadvantaged-trial-2018-19-2019-2040https://launchvic.org/41https://www.ssi.org.au/services/ignite

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SteppingStonestoSmallBusiness42

4 NGO(BrotherhoodofStLaurence)

Victoria 2011 Femalerefugeeandmigrantentrepreneurs

FourBraveWomen43

4 NGO(TheTradingCircle)

Sydney 2018 Femalerefugeeentrepreneurs

TheASRCEntrepreneursProgram44

4 NGO(AsylumSeekersResourceCentre)

Victoria 2014 Asylum-seekerentrepreneurs

SisterWorks45

5 Non-profit Victoria 2013 Femalerefugeeandmigrantentrepreneurs

ThriveRefugeeEnterprise46

5 Non-profit NewSouthWales,Victoria

2017 Refugeeentrepreneurs

Catalysr47

5 Non-profit Sydney 2016 Refugeeandmigranttechentrepreneurs

Source:authors’researchandanalysis*IgniteisnowbeingrolledoutinQueenslandbyAccessinpartnershipwithSSI

Asexplainedbelow,thissimpletypologyallowsustohighlightsomeearlykeyfindings.

• Type1generalentrepreneurshipprograms,suchasNEIS,rarelymeetrefugees’specificneeds.• Type 2 specific schemes for refugees within general entrepreneurship programs, such as NEIS Highly

DisadvantagedTrial,aremorepromising.• Type3generalprogramsforrefugeeeconomicparticipationthatincludesupportforself-employmentand

businessformationdonotexistinAustralia,butoughttodoso.• Type 4 specific entrepreneurship schemes that are part of general programs to encourage refugees’

economicparticipation,suchasSSI’sIgnite,accountformostofthelittleassistanceprovidedtorefugeeentrepreneurs.

• Type5stand-alonespecificschemesforrefugeeentrepreneurs,suchasThrive,areverynew,butshowpromisingoutcomes.

The rest of this section outlines and analyses the various support schemes that refugee entrepreneurs couldpotentiallyaccess.

2.1Federalentrepreneurshipprograms

The Entrepreneurs’ Programme, the federal government’s flagship initiative for businesscompetitivenessandproductivity,offerssupporttobusinessesthroughfourelements:acceleratingcommercialisation,businessmanagement,incubatorsupportandinnovationconnections.48

Inprinciple,itcouldprovidehelptoestablishedrefugee-ownedbusinesses.Buttogettheirbusinessestothestagewheretheycouldbenefitfromsuchsupport,mostrefugeeentrepreneursneedmorebasichelp,suchasobtainingaloanwithoutacredithistory.TheEntrepreneurs’Programmeprovidesgrantsofupto$500,000toincubators,but theseareonly for incubators that fosterbusinesses focusedon international trade.49While some refugee-

42https://www.bsl.org.au/services/refugees-immigration-multiculturalism/stepping-stones/43http://www.thetradingcircle.com.au/fourbravewomen44https://www.asrc.org.au/entrepreneursprogram/45https://sisterworks.org.au/46http://thriverefugeeenterprise.org.au/47https://catalysr.com.au/S48https://www.business.gov.au/assistance/entrepreneurs-programme49https://www.business.gov.au/Assistance/Entrepreneurs-Programme/Incubator-Support-New-and-Existing-Incubators

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foundedbusinessesboostinternationaltrade—notablywiththeircountryoforigin—theincubatorsthatsupportthemaren’tfocusedonexportingcompaniesandsoarenoteligibleforgrants.

The New Enterprise Incentive Scheme (NEIS) offers accredited small-business training,mentoringandsupporttohelpunemployedpeople(aswellasothereligiblepeoplesuchasretirees)startsmallbusinesses.50

FundedbytheDepartmentofJobsandSmallBusiness,itprovides8,600placesperfinancialyear,deliveredbyanetworkof21NEISprovidersacrossthecountry.Participantsdeemedtohaveaviablebusinessideaobtainupto13weeks’trainingforaCertificateIIIinmicro-businessoperationsoraCertificateIVinnewsmallbusiness,duringwhichtimetheymustdevelopabusinessplan.Duringthefirstyearofoperatingtheirnewbusiness,entrepreneurscanobtainadviceonorganisational,financialandmarketingissuesfrombusinessmentors.

AkeyadvantageoftheprogramisthatparticipantsregisteredwithCentrelinkreceiveaNEISallowance(equivalenttothesingle-adultrateofNewstart)for39weeksandrentalassistance(ifeligible)for26weeksthatisnotaffectedbybusinessincome.Thisgivesfledglingentrepreneurssomebreathingspacetogettheirbusinessoffthegroundbeforelosinggovernmentsupport.

Themost recent evaluation of NEIS, in 2008, found that since its launch in 1985 it had helped some 150,000unemployedpeopleobtaintraining,ofwhom83%hadbeenableeithertostartabusinessortogetajobwithinthreemonthsofgraduatingfromtheprogram.51Thatisimpressive.However,thesenewbusinessesweremostlymicro-enterprises:16monthsafterleavingtheprogram,NEISentrepreneurshadcreatedanaverageofonly0.66jobsperbusiness.Moreover,only46%ofnewfirmssurvivedafter16months,comparedwitha60%survivalratebetween2007and2011amongAustralia’sgeneralentrepreneurpopulation.JustoverhalfofthosewhoseNEISbusinessfailedsaidthiswasduetoalackofeithercapitalorprofitability.

Regrettably,fewrefugeesbenefitfromNEIS.Ofthe19,929peoplewhostartedaNEISbusinessbetween1July2015and31October2018,only325(1.6%)identifiedasrefugees.52Onemajorhurdleisthelackoflanguagesupportforthosewhoaren’tfluentinEnglish.ParticipantsneedtobeabletoreadandwriteEnglishinordertoobtainoneofthebusinesscertificatesthatarearequiredpartofthecourse.Literacyandnumeracysupportisnotprovidedandmentoringislimited.

Promisingly,NEISranatrialfromDecember2016toJune2018forhighlydisadvantagedapplicantswhofacegreaterchallengesinstartingabusiness,suchaspoorliteracyandnumeracy,culturalissuesordifficultieswithtraditionalclassroom-based training. Of the 509 participants who started their NEIS business under the trial betweenDecember2016and31October2018,32(6.3%)identifiedasrefugees.One2017trialconductedbytheHolmesglenInstitute,aNEISprovider inMelbourne, involvedfourprogramsforatotalof40refugeestudents involving6-7weeks of face-to-face training over three months. Fewer than half finished the course and only ten openedbusinesses.53

Since July 2018, the second two-year iteration of the Highly Disadvantaged trial has focused on refugees andmigrants.54ItallowsNEISproviderstotryoutinnovativewaystohelprefugeesandmigrantsstartabusiness.Theycanprovideflexibletraining,formalorinformal,thatneednotbeforthetwobusinesscertificatesthatarenormallyrequired.Andfromthestartoftrainingtheycanalsoofferenhancedmentoring,whichmaybefromanexpertfromasimilarculturalbackground.Thiscanincludeadviceon,andsupportin,accessinglanguage,interpretationand

50https://docs.jobs.gov.au/system/files/doc/other/may_2018_-_program_fact_sheet_for_neis_final.pdf51DepartmentofEducation,EmploymentandWorkplaceRelations,“NewEnterpriseIncentiveSchemelonger-termoutcomes:AlongitudinalstudyofoutcomesfromtheNewEnterpriseIncentiveScheme”,June200852InterviewwithNikitaSharpe53InterviewwithArieMoses54https://docs.jobs.gov.au/system/files/doc/other/additional_services-highly_disadvantaged_trial_2018-19_to_2019-20_final.pdf

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other assistance, developing a business plan, finding suitable premises, and obtaining a small business loan ormicrofinance.

ThetrialappearstoaddressmanyofthechallengesthatrefugeesfaceinparticipatinginNEIS,butitistooearlytoevaluateitssuccess.Moreover,noadditionalplacesareavailableforthetrialandNEISprovidersaren’tentitledtoadditionalfundingforit,soitremainstobeseenhowlargethetake-upwillbeandwhethertheadditionalserviceswillbeadequatelyresourced.

NEISisnowalsorunningatwo-weekfull-time“ExploringBeingMyOwnBoss”workshopasafeederprogram,butthisissolelyinEnglish.55

2.2Stateentrepreneurshipprograms

Atstatelevelthereishardlyanygovernmentsupportforrefugeeentrepreneurs.OneexceptionisVictoria,wheretherearetailoredSmallBusinessVictoriaworkshopsforrefugeeandmigrantentrepreneurs.56

LaunchVic,anindependentagencyestablishedbytheVictoriangovernmentin2016topromotethestate’sstart-upecosystem,alsoplacesrefugeeandmigrantentrepreneurshipattheheartofitswork.Itsthirdfundingroundin2017invitedproposalsforprogramsthatimproveaccessto,and

participationin,thelocalstart-upecosystemforrefugeeandmigrantentrepreneurs.Some$1.4millioninfundinghasbeenallocatedtofiveprojects:57

• LaikaAcademy, a social enterprise, is creating TheGeneration Launch tohelpup to 400 refugees andmigrantsengagewiththelocalstart-upeco-systemthroughworkshops,internships,educationprogramsandnetworkingevents;

• YGAPisexpandingitsacceleratorprogrambycreatingYGAPFirstGenstosupportstart-upsledbyrefugeesandmigrantsthroughworkshops,anintensiveearly-stageacceleratorprogramandanincubatortoprovideadditionalsupportforventures;

• HatchQuarterisexpandingitsInternationalStart-upEntrepreneursmeet-upsanddevelopingaplaybooktohelpprospectiverefugeeandmigrantentrepreneurs;

• EnterprisingPartnershipsisdeliveringCultov8,aprogramoftenhackathonstosupport300youngrefugeeandmigrantentrepreneursaged18-30,withthemostpromising80goingontoa12-weekpre-acceleratorprogram;

• Free to Feed, anot-for-profit social enterprise that engages refugeesandmigrants in innovative food-basedenterprises,isestablishingNowtoLaunch,afoodenterprisehubandstart-upincubatorfor60high-growthfoodstart-ups.

Inseekingto integraterefugeeandmigrantentrepreneurship into itswork,LaunchVic isarolemodel forotherfederal and statebodies that promoteentrepreneurship. But it is tooearly to evaluate the successof the fiveprojectsthatitisfunding,anditsfocusonhigh-growthstart-upsneedstobecomplementedbyotherinitiativestopromoteself-employmentandsmall-businessformation.

2.3Non-governmentalentrepreneurshipprograms

NGOsprovidesomesuccessfulandpromisinginitiatives,butthesearesmallandlimitedintermsoffunding,timeandspace.Examplesare Ignite,Thrive,Catalysrand theAsylumSeekerResourceCentre (ASRC)Entrepreneurs’Program.

55https://jobsearch.gov.au/jobseeker-info/exploring-workshop-providers56http://www.business.vic.gov.au/events?query=new%20migrants%20and%20asylum%20seekers57LaunchVic,“2016/17AnnualReport”

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Ignite Small Business Start-ups — provided by SSI, Australia’s largest not-for-profithumanitariansettlementorganisation—helpsnewlyarrivedrefugeesinSydneyestablishandexpandsmallbusinessesthroughaninnovative“socialecologymodel”thatwasinitiallybased

ontheSirollimodel.58TheIgnitemodelisbeingreplicatedinBrisbanebyAccess,inpartnershipwithSSI,andisalsobeingexportedtoCanada.

Ignite’s wide-ranging, hands-on approach involves one-on-one business, emotional and practical support fromtrainedenterprisefacilitatorswhoconnectrefugeestosuitablemembersofaresourceteamthatincludesindustryexpertsandvolunteers from localbusinesses.The lattershare theirbusinessknowledgeandskills,andsupportrefugeesthroughtheprocessofbusinessdevelopment(andindeedhelpthemadapttolifeinAustralia).

TheIgniteprocesshasfourstages:

• Engage.SSIcasemanagers(orothers)referwould-beentrepreneurstoanenterprisefacilitatorwhogaugestheirentrepreneurialpotential.Keycriteriaarethepassiontostartabusiness,awillingnesstoseekadvice,thecapacitytolearnandmakeindependentbusinessdecisions,andaviablebusinessproposition.

• Empower.Prospectiveentrepreneursaregivenfurtherinformationandaretestedtoassesswhethertheirproductandserviceconceptareviable.Theyarealsoaskedtoreviewtheirstrengthsandcapacitiesandtoidentifywhethertheyneedhelpwithsoundfinancialmanagement,qualityadministrationandcompliance,andeffectivemarketing.Theyarethenconnectedtorelevantvolunteers fromthe Ignitenetwork,whoengageintensivelywiththem.Membersoftheresourceteamcanprovidehelponeveryaspectofbusinessdevelopment, such as obtaining an ABN, developing a website, obtaining appropriate certificates andtraining,developingabusinessplan,findingsuppliers,seekingdistributionopportunitiesandlinkingclientstomicro-financeorganisations.Specifictrainingisprovidedincomplyingwithemploymentlawandfood-safetyregulations(whereappropriate)andapplyingtolocalcouncilsfordevelopmentpermits.

• Establish.OnceIgniteclientsaredeemedreadytostartabusiness—includinghavingaregisteredbusinessname, a functioningwebsite, professional promotionalmaterials and a capacity to invoice and receiptmoney—thebusinessisofficiallylaunchedandstartstrading.

• Evolve. Ignite entrepreneurs exit the program through a formal graduation process. For those withsuccessfulbusinesses,thisinvolveslearningtooperateandgrowthebusinesswithoutprogramsupport.Thismayinvolveobtainingexternalfinanceorformingprofessionalpartnerships.Thosewithlesssuccessfulbusinesses—orthosenotyetready,willingorabletogrowthebusinessintoasustainableenterprise—maysuspendorstopthestart-up.Finalreferralsandinformationareprovided.GraduatesareinvitedtoremainconnectedtotheprogramandsupportfutureIgniteentrepreneurs.

Morethan500clientshavereceivedsupportsofar.Ofthe110whohavelaunchedbusinesses,aquarterarewomenand three quarters are men. Almost two-thirds of the entrepreneurs have generated enough income to beeconomicallyindependentandbetweenthemtheyhavecreated68additionaljobs.Thetopthreesectorsfornewbusinessesarefood,cafésandrestaurants;tradeandconstruction;andhairandbeauty.59

Arigorousevaluationoftheinitialthree-yearpilotprojectbyProfessorJockCollinsoftheUniversityofTechnologySydney(UTS)BusinessSchoolconcludedthatIgnitewas“verysuccessful”(Box3).60

58FordetailsontheSirollimodel,seehttps://sirolli.com/59https://www.ignite.ssi.org.au/work-we-do/what-we-have-achieved/60JockCollins,“FromRefugeetoEntrepreneurinSydneyinLessThanThreeYears:FinalEvaluationReportontheSSIIgniteSmallBusinessStart-upsProgram”,February2017https://www.ssi.org.au/images/stories/documents/Ignite/SSI_Ignite_evaluation_report_2017.pdf

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Box3:AnevaluationofIgnite

Duringitsinitialthree-yearpilot(2013-16)theIgniteprogramaccepted240clients(186menand54women)from30countriesandwith27differentfirstlanguages.MostwerelocatedinthewesternandsouthwesternsuburbsofSydney,hadlimitedEnglishandcamefromeitherIran(87),Iraq(34)orSyria(23).AroundhalfhadexperienceasentrepreneursbeforearrivinginAustralia.

Ignitehelpedcreate61newrefugeebusinessesin2013-16–a25%successrate–aswellas20additionaljobs,mostlyforotherrefugees.Althoughthesuccessratemayseemlow,Collinsarguesthatitwouldhavebeenmuchhigherbutforcapacityconstraints: therewereonlytwoenterprisefacilitatorsandtheywereworkingfull-timewiththose61entrepreneurs.

Thirteen(42%)ofthemaleentrepreneursandfive(63%)ofthefemaleentrepreneursreportedthattheirbusinesswasprofitable.Mostexpectedorwantedtoexpandtheirbusinessinthecomingfiveyears,whileanequalnumberexpectedtobeginhiringworkersorexpandtheirworkforceoverthesameperiod.ParticipantsalsoimprovedtheirEnglish,socialconnectionsandparticipationinAustralianlife.

Successstoriesincluded:amanwhosefamilyinKenyagrewcoffeeandwhodevelopedabusinesstoimportthebeanstoAustralia;anIranianwomanwhohadbeenaphotographerinIranandwhodevelopedaphotographybusinessinSydney;anIraqimanwhohadaconstructionbusinessinIraqandwhowasnowworkingasasoletraderwhilebuildingupcapitaltotenderforhis firstcontract;anda22-year-oldAfghanmanwhowithinsixweeksofarrivingstartedanexportbusinessthatwashighlyprofitablewithinsixmonths.

Theevaluationdidnotincludeacost-benefitanalysisandSSIwillnotrevealIgnite’sbudget,butProfessorCollinsreckonsitwasaround$500,000overthreeyears.Ifhisestimateiscorrect,itwasagoodinvestment,sincehereckonsthatIgnitesavedatleast$880,000inannualCentrelinkpayments.

ThriveRefugeeEnterprise,astand-alonenot-for-profitorganisation,helpsrefugeesandasylumseekersinNewSouthWalesandVictoriastartandgrownewbusinessesbyprovidingpre-loanhelpindeveloping

abusinessplantogetherwithinformationonAustralianregulation,lawsandtaxes;loansofupto$25,000ata9.5%interestrate;andpost-loanmentoring.61

Launchedin2017,ThrivehasalreadyhelpedmorerefugeeentrepreneursthananyotherinitiativeinAustralia.Asofthethirdquarterof2018,590entrepreneurswerebeingassisted(and78werenewthatquarter).Atotalof133businesseshadbeenestablished(with30newthatquarter),16%ofthembywomen.Ithadlent$2.5million($0.6millionnewthatquarter)andhelpedcreate158permanentjobs(23newthatquarter).Thrivecalculatesthat“forevery30businessescreated,$3millionissavedforCentrelinkinthreeyears,and$1millionintaxesispaid”.AnentrepreneurwhosetupadrivingschoolbusinessthankstoThriveisprofiledinBox4.

AccordingtoCEOandfoundingdirectorHuyTruong,themotivationforestablishingThrivewastotapintorefugees’entrepreneurialdrive,andthusenablethemtointegratefasterintoAustraliansocietyasactivecontributorstotheeconomy.Ashighlightedintheintroductiontothisreport,TruonghimselfwasarefugeewhoarrivedbyboatfromVietnamandbecameasuccessfulentrepreneurinAustralia.

Thrivehasgrownquicklythankstoaninitial$2millioninterest-freeloanfromWestpacbank,whichwasprovidedforcorporatesocial responsibilityreasonsandtoattractvaluablefutureclients.Further fundingforoperationalexpenseshasbeenprovidedbythefounders(Truong,alongwithJohnandAnnaCurtis)andotherprivatedonors,

61http://thriverefugeeenterprise.org.au/about-us/#section-focus-areas

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whilecorporatepartnerssuchasAllianz,KPMG,Gilbert&Tobin,KornFerry,SHK,NewgateandEquifaxprovideprobonosupport.

Box4:KinanAlHalabi,aThriveentrepreneur

KinanAlHalabiarrivedinAustraliainAugust2016,afterfleeingthecivilwarinSyriaand spending a year in Lebanon.He spokeEnglish, hadauniversitydegree, hadtaughtcomputerscienceinSyriaandhadexperienceworkingforSwedishtelecomscompany Ericsson. Yet his qualifications weren’t recognised in Australia andobtaininganAustraliandegreewouldhavetakenthreeyears, so thebest jobhecouldfindwasasanentry-levelbusinessanalystforTelstra.SoonSundayshetook

a course to become a driving instructor. His Australian-born brother in law was a driving instructor and Kinanreasonedthat“becauseIwasworkingfor15yearsinteaching,IfeelthatmaybeIwillbeabletodothatjob—andthatiswhathappened.”ThankstoaloanfromThrive,hewasabletobuyacarandstarthisownbusiness.

Kinanisfullofpraiseforrefugeesupportservices.“SSIdoanamazingjob,becausetheyprovidealltherefugeeswithlots of information aboutwho canhelp them, andGoogle canhelp you too! Thrivehelpedme toestablish thisbusiness,becausetheygavememoney.AndabigpartofmysuccesswasfromdoingtheNEISprogram.”SydneyBusiness,aNEISprovider,helpedhimdevelopadetailedbusinessplan.ThatinturnenabledhimtoobtainaloanfromThrive.Kinanwasalsoprovidedwithamentor,whomhemettwice,butwithhisbrother-in-lawtohelphim,hedidnotneedmuchadditionaladvice.

Whilehegothisbusinessofftheground,KinanspentamonthworkingasanUberdriver.“Themainreasonforthatwork was learning English. Every client, I ask them to practice English, and I got very amazing feedback [Uberratings]!”HeenjoyedworkingforUberasthetimingwasflexibleanditallowedhimtoearndecentmoney.Kinan’snine-monthNEISallowancealsohelped,andhiswifeworksaswell.

Kinan’sbusinesstookoffveryquickly,sohesoonstoppeddrivingforUber.Inhisfirstyearasadrivinginstructorheworked seven days a week; now he works six, sometimes for 12 hours a day. He feels more confident andcomfortableasanentrepreneurandisdelightedtonolongerbereliantonCentrelinkbenefits.

“Idon’tliketotakeanythingfornothing,”hesays.“Iamalwaystryingtoimprovemybusiness.IuseeverythingIlearnedinmystudies[withNEISandThrive],andIusemyteachingskills[fromhisworkinSyria].Allthesethingsmakemybusinesssuccessful.”Sosuccessful,infact,thatheisalreadythinkingofstartinganotherone,sincehecan’treadilyexpandhiscurrentone.“Allofmyclientsareveryhappy,”hesays.“ButIcan’tdomorethanwhatIamdoing

KinaniseagertoimprovehisEnglishbuthasfoundthattherearenoTAFEEnglishcoursesavailableintheeveningatalevelhigherthanCertificate2.“IhopeIcanstudyCertificate3and4attheeveningclassbecauseIhavetoworkinthemorning,”heexplains.

Kinan’sloanfromThriveisforthreeyears.“EverymonthIreceiveacallfromthemtoseehowitisgoing.AndtheyaskifIamhavinganyproblems-fortunatelyIamnot.”KinanhasmadeavideowithThrivefortheirwebsite,aswellasonewiththeDepartmentofJobsandSmallBusiness.

Somewould-beborrowersapplytoThrivedirectly,whileothersarereferredfromitsmanypartners.63Sofar,atleast98%ofloanshavebeenrepaid,althoughTruongcautionsthattheprogramisstillinitsinfancy.Sinceapplicantslackacredithistory,collateralandguarantors,ThrivebasesitslendingdecisionsoncharacterassessmentsandtheirtrackrecordsincearrivinginAustralia.Relevantconsiderationsincludewhetherwould-beborrowersarelearning

63http://thriverefugeeenterprise.org.au/partners/

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English,whethertheyareworkinginsomecapacity,whattheirlifestyleandfamilysituationis,andwhethertheyarepayingtheirphonebills.

Thrivehasan impressive record.Westpachasnowagreed toextend the initial$2millioncapital to$4million,allowing Thrive to service many more of the 500 applicants currently in the pipeline. Other banks have alsoexpressedaninteresttobeinvolved.Thriveaimstosupport1,000refugeebusinessclientsandcreatemanymorejobs.

Catalysr,apre-acceleratorinSydneyforearly-stagetechstart-ups,offersintensiveentrepreneurshipprogramstohelp“high-performing”refugeeandmigrantentrepreneursdeveloptheirbusinessideas.

Itwasco-founded in2016byCEOUsmanIftikhar,whohadrecentlyarrived inAustraliaandrealisedthatmanyskilled refugeesandmigrantswerestruggling to find jobsandmight findmoreopportunitiesasentrepreneurs.Since then it has supported 63 teams totalling 101 entrepreneurs – around 40% of them women – with 30businessescreated.64WhileCatalysrdoesnotprovidedataonhowmanyparticipantsarrivedasrefugees,Iftikharestimatestheproportiontoberoughly20%.HebelievesCatalysrcanalsohelpcreatepositiveconnotationsaboutmigrantentrepreneursinAustralia,whilehelpingentrepreneurstodeveloptheiridentityandself-confidence.

Catalysr’sprogrambeginswithastart-upbootcampoutsideSydneywhereparticipantsmeetand learnstart-upbasics. The subsequent six-month pre-accelerator program involves: one-on-one mentoring; introductions toinvestors,potentialcustomersandfollow-onacceleratorprograms;firesidechatswithentrepreneurs;officehourswithindustryandstart-upmentors;andservicessuchasco-workingspace,accountingandlegalhelponaneedsbasis.TrainingisprovidedonAustralianbusinessnormsandlawsaswellaspracticalassistanceonhowtospeaktomentors,investorsandotherstakeholders,oftenthroughmockinterviews,andhowtopitchanideaeffectively.Theprogramconcludeswithademodayfortopstart-upstopitchtoinvestorsforseedfunding.

TheASRCEntrepreneursProgramoffers individual coaching, advice andmentoring, networkingmeet-upsandco-workingspaces forasylumseekers inMelbournewhowant tostart theirown

business.65

Launched in2014with funding fromVirginUnite, ithasso farhelpedmorethan100participants, launched10businessesanddevelopedacoachingframework.66Theprograminvolvesthreephases:goalsettingandplanning;learningbusinessfundamentalsandbuildingnetworks;anddevelopingabusinessplanandseekingmicrofinance.

Inthefirstphase,participantsdevelopaworkingrelationshipwithbusinesscoaches—experiencedbusinesspeopletrainedtocoachasylumseekers—toclarifytheirbusinessideas, identifytheirexistingcapabilitiesanddevelopnewskillsandknowledgetoachievetheirbusinessgoals.Withthesupportoftheircoach,eachparticipantthencompletesabusinessdevelopmentplan.

Thesecondphasebeginswithaworkshoponthebasicsofdoingbusiness inAustraliabythestategovernmentagency Small Business Victoria. Participants and coaches also have access to online learning resources, andparticipantscannetworkandbuildrelationshipswithotherbusinessownersandindustryexpertsthrougheventsandactivities.

Inthethirdphase,participantswhoqualifyaresupportedtodevelopabusinessplanandtoaccesssmallstart-uploansfrommicrofinancepartners,includingThriveandManyRivers,anon-profitthatassistspeoplewhocannotaccesstraditionalfinancialsupport.67

64InterviewwithUsmanIftikhar65https://www.asrc.org.au/entrepreneursprogram/66InterviewwithAbiolaAjetomobi67http://www.manyrivers.org.au/

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2.3Entrepreneurshipprogramsforfemalerefugees

Femalerefugeeentrepreneursoftenneedspecificsupportforavarietyofreasons.Womenfrommoretraditionalsocietiestendtobeprimarilyresponsibleforchildcare,andsocanattendcoursesonlyduringschoolhours.OthermothersareinAustraliawithouttheirhusbands.68Somewomenmayfeelmorecomfortablelearningwithotherwomen.Theymayhavepreconceptionsabouttheircapabilitiesandneedtoboosttheirself-confidence,especiallyiftheirhusbandisreluctanttohavethemtoworkoutsidethehome.TheymayfaceincreaseddiscriminationinAustraliatoo.Severalinitiativescaterspecificallytofemalerefugeeentrepreneurs,notablySteppingStonestoSmallBusiness,SisterWorksandFourBraveWomen.

SteppingStonestoSmallBusinessisaprogramoftheBrotherhoodofStLaurence(BSL),anon-profitthat seeks to alleviate poverty across Australia. It provides training andmentoring to help femalerefugees and migrants start businesses in Victoria through a “strengths-based, gender-aware and

holisticpracticeframework”.69

LaunchedinMelbournein2011withfinancialsupportfromtheAMPFoundationasathree-yearpilotprogram,SteppingStonesnowinvolvesfourkeycomponents:

1. Empowerment Pathways Program. This five-day program helps participants make informed decisionsaboutwhethertostartabusinessorpursueeducation,trainingoremployment.Ithelpsthemidentifytheirstrengths, improvetheirtimemanagementandfinancial literacy,exploretheirbusinessaspirations,setgoalsandlearnabouttheday-to-dayoperationsofrunningasmallbusiness.

2. SteppingStonestoSmallBusinessEntrepreneursCourse.Thisten-dayculturallytailoredcourse,providedinpartnershipwithSmallBusinessVictoria,aimstoboosttheconfidenceandbusinessskillsof20womenwho feel ready to develop a business plan. Topics include: how to start a business, record keeping,budgeting,marketinganddevelopingabusinessplan.ThecoursealsoincludesEnglish-languagesupportworkshops.Childcare isprovidedforbothcourses,andworkshopstakeplaceonedayperweekduringschoolhours.

3. Ongoingsupportoverthreeyearsthatincludesone-on-onementoring,accesstomicrofinancethroughapartnershipwiththeCommonwealthBankofAustralia,70marketingsupportat festivalsandexpos,andhelpwithchildcare,transportandreferralsforemploymentassistanceandfamilysupportservices.

4. Trainingoffemalementors.

Anin-houseevaluationinJuly2018foundthat,sinceitslaunch,SteppingStoneshaddeliveredbusinessseminarsto1,403participants,supported228entrepreneursfrom57differentcountriesandtrained164volunteerbusinessmentors.71Sinceitslaunch,nearlyhalfofthecourse’s1,228graduateswerereceivingaregularincomefromtheirbusiness.Additionalparticipantbenefitsincludedincreasedfinancialliteracy,businessacumenandeconomicandsocialparticipation.

Nearlytwo-thirdsofthe44SteppingStonesgraduatesbetween2016and2018werefromrefugeebackgroundsfrom16differentcountries.72Halfofthose28entrepreneurswerereceivingaregularincomefromtheirbusinessandtheotherhalfcontinuedtodeveloptheirbusiness idea.Aboutathirdwereundertakingfurthertrainingoreducationandaroundone fifthwereemployed.Nearly all participants reported that their socialnetworkshadimproved.

68Forinstance,femalerefugeeswhohavesufferedgender-relatedviolenceanddonotenjoytheprotectionofamalerelativecanenterAustraliaonaWomanatRiskVisa(subclass204).69https://www.bsl.org.au/services/refugees-immigration-multiculturalism/stepping-stones/70ThispartnershipwiththeCommonwealthBankofAustraliamaysoonbeending.71RebeccaPinneyMeddings,“SteppingStonestoSmallBusinessFinalReport”,BrotherhoodofStLaurenceandAMP,July201872InterviewwithRebeccaMeddings

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Box5:Faven,aSteppingStonesgraduate73

Faven74arrivedinAustralia in2003fromEritreaviaEgypt.“AssoonasIarrived,Iworked.Ididsomecleaning…somecashierworkinaparkinglot…someagedcarework,Ididnursing,I’vedonelotsofworkbefore,”sheexplains.“Inthebeginning, the work like the cleaning and cashier [work] didn’t need any qualifications. Then I did [a] six-monthqualificationinagedcare,andthenIworkedaboutthreeyears.Atthesametime,Iwasdoingmynursingdegree,whichIfinishedin2008,andthenIstartedworkinginmid-2008.ButthenIhadtwobabies,andbecauseofthematernityleaveIcan’tgotomyshifts,soIhadtostayathome,andmybrainwantedsomework,”shesays.“So,Ididthis[theSteppingStones]courseinmymaternityleave.”

FavenlearnedaboutSteppingStonesfromaflyerin2014.“Iwasthinkingofstartingmyownbusiness,that’swhyIwasencouragedtodotheprogram,”sheexplains.Whileshehadnopreviousbusinessexperience,shedidhaveabusinessidea.“Anonlinebusiness…toselljewellery,electronics,andanythingthatIcanmakemoney.”

BythenshespokegoodenoughEnglishtoapplyforNEIS.Butshewasn’treadytocommitfulltimetoherbusiness,sinceshewasalsocaringforfourchildren.“Icouldn’tdoit[NEIS]atmyownpace.”

HerexperiencewithSteppingStoneswasmixed.“Therewereotherwomenwithasimilarbackground,refugees.”ShecouldseebothprosandconstothefactthatSteppingStonesissolelyforwomen.“Withwomenyoufeelfreetosharesomeexperiences,butatthesametimeyoufeel,whatifmybrotherwouldwanttodoit?”

Thetimingofthecourse,whichwasthreedaysaweekforeightweeks,helpedwithchildcare.“Itwasgoodthatitstartedlater,about10or10.30am,soIhadtime…tosendmychildrentoschoolortotheirchildcareandarriveintheprogram[ontime].”

Shefeltthatadownsidewasthatthetrainingdidn’tleadtoaformal,recognisedqualification.Herexperiencewithhermentor,whomshemetafewtimes,couldalsohavebeenbetter.“Itwasgood–mymentorhadanonlinebusiness,andshesharedherexperiencehowshegotherwebsite,howshedoesthings.Butitwasn’tascloseas…Imeanthementorshipwas…wecouldspeak,but Ididnotbenefit largely fromthementorship.”Faven feelsaworkplacement inanonlinebusinesswould have beenmore helpful. “I would see all the interactions, all the processes – it gives you hands-onexperience.”

ShepointedtootherareaswhereSteppingStonescouldimprove.“Ithinkperhaps,forexample,[itcouldhavetaughtmeabout]followingupwithmyclients,orcollectingmyclients’dataforexampletoimprovemyemailmarketing.Orthetechnology,theydidn’tevenmentionanythingaboutthat–that’ssomethingIwouldhavelikedtolearn!”TheSteppingStonesprogramhassinceintroducedtechnologyworkshops.

Since finishing the course, she has benefited from follow-upworkshops, catch-up lunches, a Facebook page and anongoingBSLcontact.ShehasattendedsomebusinesstrainingworkshopsatBSLaswellasdoingonlinetraining.

In2017,sheregisteredabusinessnameandcreatedawebsite.“Isellfromhomealittlebit,butitisnotabigbusiness.Itisgoingok,theclientsarecomingslowly.”Shesellsjewellery,clothing,cosmeticsandotheritems.

Ideally, Favenwould likeanexperiencedmentor from theMiddleEastorAsia. Shecouldalsodowith fundingbut isreluctanttoseekaloan.“Idon’tliketheideaofaloan,Idon’twanttogetintodebt.”She’dalsoliketoexport.“HopefullyinthenearfutureIwillbeabletosellnotonlyinAustralia,butworldwide.Ifthebusinessgoesinternationalthereisnolimit.”

73Personalinterview.74Favenisapseudonymtoprotectherprivacy

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SisterWorks,anot-for-profitsocialenterprisethathelpsfemalerefugees,asylumseekersandmigrantsbecomefinanciallyindependentandhappilysettledinAustralia,employsalearning-by-doingmodeltohelpwomenlearnhowtoworkandcreateabusinesswithina

supportivenetwork.75Itfocusesonhelpingthemostvulnerableandmarginalisedwomen,whomaybemothersand family carerswith limited English skills and little or nowork experience, andwho are also unfamiliarwithWesternculture,sociallyisolatedandilliterateintheirownlanguage.

Its“home”intheinner-cityMelbournesuburbofRichmondincludesadesignlabwherewomenlearntomakehigh-qualityproducts;acommercialkitchenwhereparticipantslearntocookatabusinesslevelandmakeretail-qualitypackaged foodunder theguidanceofaprofessional chef;a shopwhere they learn to sell theirhandcraftsandpackagedfood;andabusinesshubtosupportnewentrepreneursincreatingasustainablemicro-businessoncetheyhavetheconfidencetopromotetheirmarketableproduct.76AfurthershopisnearbyinSouthYarra,withpop-upselsewhere.RevenuesaresharedbetweentheentrepreneursandSisterWorks.

Betweenitslaunchin2013andJune2018,187entrepreneurshavebeensupported,20ofwhomhavestartedtheirownbusiness.In2017-18afurther68entrepreneurswereinvoicingSisterWorksandtogetherearned$87,183.

FourBraveWomen(FBW),aninitiativeofTheTradingCircle,anot-forprofitthatseekstocreateeconomicandeducationopportunitiesforwomenandgirls,employsasimilarmodeltoSisterWorks.77Whileitfocusesonwomen,italsotakesonsomemen.

LaunchedinApril2018intheinner-westSydneysuburbofSummerHill,FBWseekstoempowerrefugeestooperateandgrowtheirownsmallbusinessinaninclusiveandwell-supportedenvironment.Itdoessoprimarilythroughacaféthatprovidesrefugeeswithexperienceoftheday-to-dayrunningofasmallbusiness,workinginacommercialkitchen and serving customers. After a cycle of eight weeks, the goal is for them to gain enough capital andknowledgetobranchoutandestablishabusinessoftheirown.

Duringthoseeightweeks,refugeesalsoreceiveeducationandtrainingontheAustralianworkplaceandregulationssuch as health and safety, aswell as informalmentoring. Refugees are able to test their business idea,menu,businessplanandreadinesstostarttheirownbusiness.Whilerefugeesmustcoveralloftheircosts,includingrent,theyretainanyprofits theymake.The firstgroupearned$58,000 ineightweeks,$25,000ofwhichwasprofit.Participants’childrenoftenaccompanythem.

FBW received initial funding from The Trading Circle and Good Shepherd Australia New Zealand, along withsubstantial volunteer support. In its first 11months, refugeesmade around $260,000 in profit, with a further$130,000goingtowardsoverheads.FBWseekstobeentirelyself-sufficientwithinfiveyears.

Nextdoortothecaféandkitchen,abakerywhichoffersUkrainian,Iranian,SyrianandRussiansweetsandsavourypastrieshasbeenestablished.There isastorethatsells fair-tradeproductsmadebywomen in theAsia-Pacificregion.FBWalsotrainsbaristasincollaborationwithSacredGroundsCoffeeCompanyandbarstafftogetherwithTheTemperanceSociety.FBWacceptscontractsforlargercateringeventsandhostseventswithinthecafé,suchasIraqibarbecuenights.

FBW partners with SSI’s Ignite, which refers suitable clients to FBW and provides them with the necessaryrequirementstostartabusinessinAustralia.

Promisingbutpatchy

Asthisoverviewhashighlighted,Australiahasagrowingnumberofpromisingandworthyinitiativestohelprefugeeentrepreneurs.Yetsupportremainspatchyatbest.ItisalmostexclusivelyconcentratedinNewSouthWalesand

75https://sisterworks.org.au/about-us/76https://sisterworks.org.au/wp-content/uploads/2018/10/SisterWorks-Annual-Report-2017-18e-smaller1.pdf77http://www.thetradingcircle.com.au/fourbravewomen

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Victoria,andmorespecificallyinSydneyandMelbourne.Itisprimarilyprovidedbythenot-for-profitsector,withvaryingdegreesofsuccess,andsodesperatelyshortoffundingthatsuccessfulventuresareunabletoscaleup.Therearehugegapsthatneedfilling;ortoputitmorepositively,therearehugeopportunitiesforprogress.

DrawingonwhatworksbestinAustraliaandinternationally,thenextsectionsetsoutSevenStepstoSUCCESS.

Image4

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3. RECOMMENDATIONS:SEVENSTEPSTOSUCCESSHowcanrefugees–andAustralia–makethemostoftheirentrepreneurialpotential?BasedonourresearchandanalysisofbestpracticesinAustraliaandinternationally,thisreporthasdistilledSevenStepstoSUCCESS:

Eachstepentailsthreerecommendations.Thestepsandrecommendationsarepresentedbelowandillustratedwithcasestudiesofbestpractices.

Step1:StrategicapproachRecommendation 1: Integrate self-employment and business formation pathways into the economicparticipationstrategiesofrefugeesettlementandemploymentservices.

With a fewnotable exceptions, such as SSI’s Ignite in Sydney, refugee settlement and employment services inAustralia focus solely on employment as a pathway to economic participation. While Settling Better rightlyhighlightedtheimportanceofboostingrefugeeemployment,entrepreneurshipisanotherimportantpathway,notleastbecauseofthebarriersrefugeesoftenfacefindingjobs.Moreover,employmentandentrepreneurshiparecomplementary:employmentcanhelprefugeesaccumulatetheexperienceandsavingsthattheyneedtostartabusiness,whilepeopleincreasinglycombineself-employmentandrunningasmallbusinesswithfull-orpart-timework.

While ad-hoc initiativesmay help some individuals, only a strategic approach can realise the full potential forrefugeeentrepreneurshipacrossAustralia.Thismeansintegratingself-employmentandbusinessformationintoallprograms to promote refugees’ economic participation, beginning with the Humanitarian Settlement Program(HSP)andextendingtoeverylevelofgovernmentthatprovidessettlementandemploymentservicesandeveryNGOthatreceivespublicfundingtodoso.

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Putsimply,allinitiativestohelprefugeesbecomeeconomicallyactiveandfinanciallyindependentshouldpresententrepreneurshipasaviableoption,aboutwhichpotentiallysuitablerefugeescanmakeinformedchoices.

Forentrepreneurshiptobeaviableoption,refugeesneedaccesstoupskilling,connections,capital,anenablingenvironment and specific support in starting a business, as detailed in subsequent sections.Gauging refugees’potential suitability for self-employment andbusiness formation requires timely assessmentsof their skills andattributes,asoutlinedinRecommendation3.Forrefugeestomakeinformedchoices,theyneedtobeawareoftheopportunitiesandchallengesthatexist–andtheyalsoneedrolemodels,hencethe importanceofspotlightingsuccessstories.

Anexample(Box6)ofbestpracticeinintegratingentrepreneurshipintoeconomicparticipationstrategiesistheholistic approach to settlement, employment and entrepreneurship of the United States Office of RefugeeResettlement(ORR).

Box6:TheOfficeofRefugeeResettlement(US)

TheORR,anarmoftheUSDepartmentofHealthandHumanServices,placesentrepreneurshipattheheartofitsstrategyforrefugeeemploymentandeconomicdevelopment.78ItsupportsrefugeeentrepreneurshipthroughitsMicroenterprise Development (MED) program, the largest initiative of its kind in the developedworld. (Alsoimportant is itsRefugeeFamilyChildCareMicroenterpriseDevelopmentprogram– seeRecommendation18below).

MEDhelpsrefugeesbecomefinanciallyindependentbystarting,growingandsustainingbusinesses.Itprovidesrefugeeentrepreneurswith loans, training,adviceandhelp toobtain (or improve) theircredit rating throughcredit-builderloans.

TheORRusesacompetitiveapplicationprocesstoawardgrantsofuptoUS$300,000(A$417,000)ayearforfiveyearstopublicagencies(suchastheMassachusettsOfficeofRefugeesandImmigrants),communitydevelopmentagencies (suchastheHmongAmericanPartnership)andvoluntaryagencies (suchasthe InternationalRescueCommittee).

Grantsmaybeused fora revolving loan fundand loan-loss reserves,aswellas forprovidingadvice, training,networkingandoutreachconsistentwithORRguidelines.

EligiblerefugeeclientsmayborrowuptoUS$15,000(A$20,800)foravarietyofbusinessneeds,repayablewithin60monthswithinterestnottoexceedtheprimerateplus4%.OrganisationsreceivingORRgrantsareencouragedtoobtainadditionalfundingfromothersourcesandthosethatdocanlendmorethan$15,000ifnecessary.

Between1991and2012organisations receivinggrantsunder theMEDprovidedsomeUS$10million (A$13.9million)inORRfinancingtorefugeeentrepreneursandpassedonafurtherUS$15.5million(A$21.5million)inloans from other sources. This helped refugees start, expand or strengthen approximately 10,800 micro-businesses,withabusinesssurvivalrateof88%andaloanrepaymentrateofnearly98%.79Morethan10,000newjobshavealsobeencreated,morethan24,000refugeeshavegainedentrepreneurialskillsandknowledge,andtheadditionalbusinessincomeishelpingrefugeefamiliestoachieveeconomicself-sufficiency.

In fiscal year2015alone, theORRprovidedmore than2,000 refugeeswithone-on-one counselling, training,adviceandfinance,including558loansaveragingUS$8,000(A$11,100)eachthathelpedcreate1,163jobs.80

78https://www.acf.hhs.gov/orr/refugees79https://www.acf.hhs.gov/orr/programs/microenterprise-development-child-care80UNCTAD,“Policyguideonentrepreneurshipformigrantsandrefugees”,October2018https://unctad.org/en/PublicationsLibrary/diae2018d2_en.pdf

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Recommendation2:Includeastrategythataddressesrefugeeentrepreneurs’particularneedsandchallengesinexistingprogramstoencourageentrepreneurship.

Promotingentrepreneurshipiskeytostimulatingeconomicgrowthanddevelopment,becausenewandgrowingbusinessescreatejobs,valuableproductsandservices,wealthandtaxrevenues.Yetexistinggovernmentstrategiestopromoteentrepreneurshipgenerallyneglectrefugees’hugeentrepreneurialpotential.Tomaximisetheirimpact,and give refugees a fair go, entrepreneurship strategies need to address the specific needs of refugeeentrepreneurs.

The federal government’s flagship Entrepreneurs’ Programme contains no reference tomigrants in general orrefugeesinparticular.Nor,forexample,doestheNewSouthWalesgovernment’sSmallBusinessStrategy.81TheNew SouthWales government has a strategy for attracting businessmigrants with entrepreneurial skills fromaroundtheworld,butnotfortappingintotheentrepreneurialpotentialofrefugeeswhoarealreadyinthestate.82

Theseglaringoversightscanberemedied.Forexample,theEntrepreneurs’Programmecurrentlyprovidesgrantsofupto$500,000toincubatorsthatfosterbusinessesfocusedoninternationaltrade.83Thiscouldbebroadenedtoincludebusinessesfocusedonlocaltrade(whichwouldallowincubatorsforrefugeebusinessestoapply).Theprogramprovidesadditionalsupporttoincubatorsinregionalandremoteareas.Aspecificcategoryforincubatorsforrefugee-ownedbusinesses(orthosestartedbydisadvantagedgroups)couldalsobecreated.

OtherstategovernmentsshouldemulateVictoria,whereLaunchVicawardsgrantstoprojectsthathelprefugeeandmigrantentrepreneursaccessthelocalstart-upecosystem.Strategiesforsmallbusinessesshouldalsoincludesupportforthosewithspecificneeds.

TheNEIStrialofferingspecificsupporttohelpunemployedrefugeesandmigrantsstartbusinessesispromising,although it is toosoon to judge itseffectiveness. Ifa formalevaluationdeems it successful, the trial shouldbeexpandedandmadepermanent;ifnot,itcouldbeimprovedwithinputsfromotherschemessuchasThriveandSSI’sIgnite.

TheEuropeanUnion’sEntrepreneurship2020ActionPlan(Box7)isamodelofinternationalbestpracticeonhowtoensureentrepreneurshipstrategiesaddressrefugees’needs.

81https://www.industry.nsw.gov.au/__data/assets/pdf_file/0003/107643/nsw-small-business-strategy.pdf82https://www.industry.nsw.gov.au/__data/assets/pdf_file/0004/56317/NSW-Strategy-for-Business-Migration-and-attracting-international-students.pdf83https://www.business.gov.au/Assistance/Entrepreneurs-Programme/Incubator-Support-New-and-Existing-Incubators

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Box7:TheEuropeanUnion’sEntrepreneurship2020ActionPlan

TheEuropeanCommission,thequasi-executivebodythatproposesEuropeanUnion(EU)legislationandmonitorsitsimplementation,aimstosupportanenvironmentattractivetoallformsofentrepreneurship.84

Itseesrefugeeandmigrantsasimportantpotentialentrepreneursandrecognisesthatentrepreneurshipisavaluableway for themtoparticipate in theeconomyand integrate intosociety. Italso recognises theneed toaddress thespecificlegal,culturalandlinguisticobstaclesrefugeesandmigrantsface.

FacilitatingrefugeeandmigrantentrepreneurshipisagoalofboththeEU’sEntrepreneurship2020ActionPlananditsAction Plan on the Integration of Third-Country Nationals. The latter encourages EU countries to stimulateentrepreneurshipthroughtailoredbusinesstrainingandmentoringandbyopeningupmainstreamentrepreneurshipsupportstructurestothird-countrynationals.TheCommissionalsoseekstoidentifybestpracticestopromoteandsupportrefugeeandmigrantentrepreneurshipandfundspilotprojectsfortheirdissemination.

In2016theEUheldaconferencewithrepresentativesfromEUcountriesandrelevantstakeholderstodiscussthestateofexistinginitiativesandthepossibleactionstoaddvalueatEUlevel.Thefindingswerepublishedinaguidebookongoodpracticesonrefugeeandmigrantentrepreneurship.

In June 2017, the EU started funding four two-year projects covering nine countries85 to support training andmentoring for potential refugee andmigrant entrepreneurs:Migrants Empowerment for Change (ME4Change)86,EntryWay87,FreshStart88andYoungMigrantEntrepreneurs(YOU-ME).89ME4ChangeandYOU-MEinparticularhelpraise awareness of entrepreneurship within refugee communities, identify potential entrepreneurs and providetrainingandmentoring.

InOctober2017,theEUstartedfundingfourprojectsacross11countriestofosterthecreationofnetworksandthesharingofbestpracticesamongsupportschemesforrefugeeandmigrantentrepreneurship.90ThesearetheEuropeanMigrantEntrepreneurshipNetwork(EMEN)91,theEuropeanNetworkforMigrantEntrepreneurstoScaleUpandGrowUp(M-UP)92,MigrantAccelerationforGrowth–NetworkforEntrepreneurshipTraining(MAGNET)93andtheMigrantEntrepreneurshipGrowthAgenda(MEGA).94

MAGNETinparticularfocusesonrefugeeentrepreneurship.Itseekstodevelopatrainingprogramforthoseinvolvedin supporting refugeeandmigrantentrepreneurship, anopen toolkit for supportbasedongoodpracticesandanonlineplatformtohelpdisseminateknowledge,aswellaspromotingnetworking.

84https://ec.europa.eu/growth/smes/promoting-entrepreneurship/we-work-for/migrants_en85TheninecountriesareBelgium,Finland,Germany,Greece,Italy,theNetherlands,Spain,SwedenandtheUK.86http://me4change.eu/about/87http://www.entrywayproject.eu/about/88https://www.fresh-start.eu/89https://youme-project.eu/project90The11countriesareAustria,Belgium,Bulgaria,France,Germany,Greece,Italy,theNetherlands,Poland,SpainandtheUK.91http://emen-project.eu/92https://emen-up.eu/about-m-up/93https://migrantacceleration.eu/94https://migrant-entrepreneurship.eu/

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Recommendation3:Providetargetedandtimelysupportforprospectiverefugeeentrepreneurs,notablythroughanearlyassessmentoftheirentrepreneurialpotential.

Onlysomerefugeeswant–andaresuitable– tobecomeentrepreneurs,but thosethatdooftentakeyears torealisetheirambition.Toenablebothsettlementprovidersandrefugeestomake informedchoicesabouttheiroptions,earlyassessmentsarecrucial.

SkillsassessmentsandcareerorientationsessionsoughttotakeplacesoonafterarrivalinAustralia(orbeforehandin the caseof refugees resettled fromcamps). Tohelp identifyprospectiveentrepreneurs, assessments shouldinclude evaluations of entrepreneurial traits, marketable skills, interest in starting a business and previousentrepreneurialexperience.

Once prospective entrepreneurs are identified within a strategic framework that encourages refugeeentrepreneurship,thenextstepisUpskilling.

Step2:UpskillingRecommendation4:Offerprospectiverefugeeentrepreneursappropriatebusinessandlanguagetraining,suchascourses on English for business and all aspects of how to start a business, including information onAustralianbusinesspractices,laws,taxes,regulationandculturalnorms.

ExistinginitiativesthatpromoterefugeeentrepreneurshipsuchasIgniteandThriveofferbasicbusinesstrainingcoursesupfront.Thisprovidesamodelformainstreamingentrepreneurshipineconomicparticipationstrategies.

TheDepartmentofEducationandTraining’sAdultMigrantEnglishProgram(AMEP)anditsproviderssuchasAMESAustraliashouldalsoofferanEnglishforBusinesscoursealongsideexistingEnglishforWorkcourses.95

Recommendation 5: Provide skilled refugees with small loans to enable them to obtain local licenses andqualificationsandbecomeself-employedorsmallbusinessowners.

ManyrefugeeshaveskillsandqualificationsthatarenotrecognisedinAustralia,ortheylacktherequisitelicenses.Helpingthemtoobtainthenecessarytraining,certificatesandpermitsisapriority.

Windmill Microlending (previously Immigrant Access Fund) in Canada provides a model of international bestpractice(Box8).Itssmallloanshaveaveryhighrateofeconomicandsocialreturn.InWindmill’scase,loansareprovidedbyprivatebankswiththeinterest-freecomponentmadepossiblebycommunitydonations.

IntheAustraliancontext,suchloanscouldalsobeprovided,orsubsidised,bygovernment.OneoptionwouldbefortheloanstoberepayablethroughthetaxsystemasisthecaseforstudentloansinAustraliaandtheUK.Thiskeepscostslowandreducescreditrisk.

95https://www.ames.net.au/learn-english/english-for-work

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Box8:WindmillMicrolending(Canada)

In2016,ImmigrantAccessFundCanada(nowWindmillMicrolending)introducedamicro-loanprogramforpeoplegrantedrefugeestatuswithinthepreviousthreeyears.Itoffersinterest-freeloansofuptoC$10,000(A$10,600)tohelpthemobtainlicensingand/ortrainingintheirfield.Whilemanyborrowersthenobtainemployment,others—suchasdoctors,dentists,pharmacists,accountants, lawyersandtruckdrivers—becomeself-employedorsmallbusinessowners. Funding isprovidedbyprivatebanks suchas theRoyalBankofCanada,with the interest-freecomponentmadepossiblebycommunitydonations.Asof31August2018,138interest-freeloansforrefugeeshadbeenapproved.

WindmillMicrolendinghasbeensuccessfullyprovidingloanstoimmigrantsingeneralsince2005.Anindependentevaluation showed that 80%of loan recipients subsequently foundwork closelymatchingwhat theydid beforecomingtoCanada.Theiraverageincometrebled(fromC$16,000toC$50,000)andtheirfederalandprovincialtaxpaymentsquadrupled(fromC$1,945toC$8,452).96

Thestudythusfoundthatevery$1investedledtoareturnof$15totheCanadianeconomyinthefirstyearafteraborrowercompletedtheirlendingplan.97

Recommendation6: Incubators for refugeeentrepreneurs shouldconsiderofferingpart-timeemploymentopportunitiestoentrepreneurswiththeirbusinesspartners.

Australianjobexperienceisvaluableinitself.Itcanalsobeacomplementtoentrepreneurship,bothasasourceofincome(andthusseedcapital)andtohelpwould-beentrepreneurslearnmoreaboutthelineofbusinesstheywanttodevelop(astheSteppingStonesparticipantprofiledinBox5pointedout).Moreover,itisafall-backoptionifparticipantsturnouttobeunsuitableorunwillingtobecomeentrepreneurs.

In the UK, The Entrepreneurial Refugee Network (TERN), a social enterprise that promotes refugeeentrepreneurship,inpartnershipwiththeBen&JerryFoundation’sIceAcademy,provideswould-beentrepreneurswithpart-timejobsasice-creamvendorswhiletheydeveloptheirbusinessideaonTERN’spre-incubatorprogram.

Itwouldbebetterstilltoprovideemploymentopportunitiesinthelineofbusinessinwhichtherefugeewantstowork.Thiscouldbedeliveredthroughpartnershipswithbusinessesthatwishtohelprefugeesaspartofcorporatesocial responsibility programs, and that may also wish to foster future business relationships with refugeeentrepreneurs.

AlongwithUpskilling,refugeeentrepreneursalsoneedConnections.

96https://windmillmicrolending.org/about/our-impact/97J.C.HerbertEmery,“EvaluatingtheincomeandtaxyieldoutcomesoftheImmigrantAccessFundPrograminAlberta”,ImmigrantAccessFund(2015)https://docplayer.net/25473268-Executive-summary-evaluating-the-income-tax-yield-outcomes-of-the-immigrant-access-fund-program-in-alberta-dr-j-c-herbert-emery-march-31-2015.html

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Step3:Connections

Recommendation7:Establishanonlineplatformtohelpconnectrefugeeentrepreneurstoeachotherandtonetworksofpeopleequippedtohelpthem.

Refugeeentrepreneursoftenlacksupportivenetworks,bothwithintheirlocalcommunityandmorebroadly.Theyhavemuchtogainfromconnectionstootherrefugeeentrepreneurswhohavevaluableexperiencestoshareabouthowtostartabusiness.Theywouldalsobenefitfrombeingmatchedtoothersreadytoofferadvice,mentoring,financeandotherhelp.

Onewaytocreatesuchvaluableconnectionswouldbethroughanonlineplatform.Atabasiclevel,thiscouldlistall government andnon-government programs thatmight assist refugee entrepreneurs. This could include themanygrantsandothersupportavailabletosmallbusinessesingeneral.

Suchanonlineplatformcouldalsoenablerefugeestopostpersonalprofilesshowingtheirskills,experienceandneeds.Potentialsupporterscouldalsooutlinethehelptheycanoffer.Thesitecouldthenhelpmatchthem,possiblyonprojectpages.RefugeeTalent,ajobmatchingsiteforrefugeesinAustralia,couldpotentiallyhostthesiteinitially.

OneexampleofinternationalbestpracticeisStartupRefugeesinFinland(Box9).

Box9:StartupRefugees(Finland)

StartupRefugeesbrings togethermore than500partners fromacrossFinland— includingcompanies,governmentdepartments,NGOs,universities,congregations,researchinstitutes,communitiesandindividuals—tosupportrefugeesstartabusinessandenterthelabourmarket.TheyincludeSupercell,amobilegamingcompany,Demos,athinktank,theHankenSchoolofEconomics,Heippa,amentor-on-demandapp,andAaltoUniversity’sStart-upCentre,aswellasseveralgovernmentministries.Everyoneiswelcometojointhenetwork,providedtheyoffersomethingconcretetosupportthecommongoal.

The network provides work and education opportunities, professional connections, funding, mentoring, skillsdevelopmentanduseful information.Todate ithassupportedthedevelopmentofmorethan55businessesrunbyrefugeesandofferedover4,000workandeducationopportunities.

Oncea refugeehas completedaprofile, theirneedsarematchedwithoffers fromprogrampartners.Thebusinessprogrammatchesrefugeeswiththeprofessionalvolunteersbestsuitedtoofferthesupporttheyneedtostartandrunacompany.98Volunteersprovidesupportonallthestepsfromformingabusinessideatorunningaprofitablecompany.Theyofferinformationonbureaucracyandlegalissuesandconnectrefugeestothenetworksusefultotheirbusiness.Theyofferamentorthatbestsuitstheirneeds–forexampleforpeersupport,andexpertiseinvariousbusinessfields.Theysupportentrepreneursineverythingfromfindingfundingtogettingtheirbusinessupandrunning.

Onegreatbusiness setup thanks toStartupRefugees isBaghdadBarbers.99 “TheMiddleEasthasa fantasticbeardtradition, but here people don’t know how to take care of beards,” explains program coordinator Camilla Nurmi.“HipsterswithbigbeardscangotoBaghdadBarbersandgetgroomingtechniquesthatFinlanddoesnothave.TherearealsoservicesforMuslimwomenwhocangettheirhairdoneinprivate.”

98https://startuprefugees.com/about/business-program-for-refugees/99https://finland.fi/business-innovation/startup-refugees-innovate-integrate-finland/

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Recommendation 8: Create a network for the sharing of best practices about how to support refugeeentrepreneurship.

In the absence of a strategic, comprehensive approach to supporting refugee entrepreneurship, many smallinnovative initiativeshavesprungup,each fillingslightlydifferentniches.Thisdiversityand innovationareverypositive.

Atthesametime,themanydisparategroupsthathelprefugeeentrepreneursatastateandlocallevelinAustraliacouldalsobenefitfromsharingresources,connectionsandbestpractices,suchasthefindingsinthisreport.CPDandtheCouncilontheEconomicParticipationofRefugeescouldassist insettingupanetworktodothis.Moreambitiously,suchanetworkcouldoffertrainingandatoolkittomembersofsupportorganisations.

Asmentionedabove(Box7),theEuropeanCommissionfundsseveralsuchnetworksintheEU,notablyMAGNET.

Recommendation9:Providerefugeeentrepreneurswithstructuredhelpinconnectingtopotentialcustomersandmarkets.

IncountriessuchastheUS(wherepublicauthoritiesaremandatedtosourcefromminoritybusinesses)andtheUK(wheretheyaren’t),membershiporganisationsencouragepublicorganisationsandprivatebusinessestosourcefromminority-ownedbusinessesandhelpconnectbuyerstosuppliers.TheseincludetheNationalMinoritySupplierDevelopmentCouncilintheUS,andMinoritySupplierDevelopmentUK.TheirpartnerorganisationinAustraliaisSupplyNation,whichcertifiesandprovidesadirectoryofindigenous-ownedbusinesses.100

Intheabsenceofgovernmentmandatestopurchasefromrefugee-ownedbusinesses,theMSDUKmodelseemsmostappropriateforAustralia.101ThisismoreambitiousthanSupplyNation.Italsohostsamarketplacethathelpsmatchsupplierstocontracts.Itorganisesconferencesandeventstopromotenetworking.Itprovidesacentreofexcellencetoprovide informationonbestpracticesaroundsupplierdiversity. Ithostsaplatformforknowledgeexchangeandtohelpsmallbusinessespartnertogethertobidforlargecontracts.Anditoffersawardstorecogniseachievementsandraiseawareness.

AswellasConnections,refugeeentrepreneursalsoneedCapital.

Step4:Capital

Recommendation10:Provideaccesstocapitalthroughpartnershipswithfinancialprovidersasacomponentofsupportprogramsforrefugeeentrepreneurs.

Lackofcapitalisperhapsthebiggeststumblingblockthatprospectiverefugeeentrepreneursface.102Refugeestendtoarrivewithoutcapital,taketimetoamasssavingsandtypicallystruggletoobtainexternalfinanceduetoalackofcredithistoryandcollateral.

Giventheimportanceofseedcapital,programstosupportrefugeeentrepreneurshipthatdonotprovideaccesstocapitalareunlikelytobesuccessful.Sincetheymaylacksuchfundingthemselves,nottomentiontheexpertisetoevaluatecreditworthiness,itmakessensetopartnerwithspecialistfinancialproviders.

100https://supplynation.org.au/101https://www.msduk.org.uk/about-us/102See,forexample,JohnvanKooy,“RefugeewomenasentrepreneursinAustralia”,ForcedMigrationReview53,October2016

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If refugee settlement providers are to include entrepreneurship as a viable option for suitable candidates,partnershipswith financialproviders,and increasedaccess tocapitaloverall, arecrucial. Likewise, independentinitiativestopromoterefugeeentrepreneurshipoughttopartnerwithsuccessfulmicrofinanceproviders,notablyThrive,assomealreadydo.

Recommendation 11: Encourage a diversity of funding sources,with the overarching aim of greatly increasingrefugeeentrepreneurs’accesstocapital.

Intheabsenceofcreditratingsorcollateral,prospectiverefugeeentrepreneursgenerallycannotgetabankloan,whileexternalequitycapitalisonlysuitableforasmallnumberofhigh-growthbusinesses.Avarietyofapproachescouldbeemployedtoovercomethischallenge.

• Interest-freecharitableloans.IntheUK,thecharityRestartRefugeeSupportprovidesinterest-freeloansto refugee entrepreneurs, including those graduating from TERN, with no requirements for collateral,equityorguarantees.Ineffect,prospectiveborrowers’creditworthinessisscreenedthroughtheirselectionby,persistencewithandgraduationfromTERN’sbusinessincubator.InAustraliatheSteppingStonestoSmallBusinessprogramissettopilotinterest-freeloansthisyear.Clearly,interest-freeloansofferhighlyfavourable terms for beneficiaries. But scaling them up would require large-scale charitable support,communitydonationsorpublicsubsidy.

• Loanguarantees.InSweden,theEsterFoundationprovideslow-costloanstofemalerefugeesandmigrantswhocompleteits18-monthentrepreneurshipprogramandhaveapprovedbusinessplans,thankstoloanguaranteesfromitscharitypartnerJohaniterhjälpen.103Thecharityhassetupanaccountthatguarantees80%ofeachloan,withtherefugeeborrowerliablefortheremaining20%.Swedbank,alocalbank,providesloansforuptothreeyearsofbetweenSEK20,000($3,000)andSEK300,000($45,200)atacurrentinterestrate of around 3% (the residential mortgage rate plus 1-2 percentage points). Entrepreneurs whosebusinessplanhasbeenapprovedbytheSwedishEmploymentAgencycanalsoreceivefinancialstart-upsupportfromit.Suchlow-costloansareattractiveforborrowersandsofar,theloanguaranteeshaveneverbeencalledon.Butscalingupsuchaschememaybedifficultduetothecostoftheloanguarantees.

• Credit-builderloans.GranteesoftheUSOfficeofRefugeeResettlement’sMicroenterpriseDevelopmentProgram(Box6)providecredit-builderloanstohelprefugeesacquire,orimprove,theircreditrating.Theseinvolvealenderdepositingasmallamountofmoneyintoasecuredsavingsaccountfortheapplicant.Theborrowerthenpaysthemoneybackinsmallmonthlyinstalments,withinterest,overasetperiodoftime.At theendof the term,which typically ranges from six to24months, theborrower receives the totalamountofthecreditbuilderloaninalumpsum,plusanyinterestearnedifthelenderoffersinterest.Bydemonstratingthattheycanreliablymakesmallmonthlypaymentsontime,refugeesbuildupasolidcredithistory,makingiteasiertotapotherformsoffinance.Abigplusofthisschemeisthatitislow-costandreadilyscalable,butitinvolvesadelayinrefugeesstartingabusiness.Intheabsenceofaseparatepoolofcapital(whichdoesexistinthecaseoftheMED),refugeeentrepreneursmaystillstruggletoobtainasmall-businessloan,becausebanksarelikelytostillconsiderthemveryhigh-riskcredits.

• Characterassessments.Thrivebasesitslendingdecisionsonindividualcharacterassessmentsandbusinessexperts’ assessment of borrowers’ business plans (see section 2.) Done well, these can be effectivesubstitutesfortraditionalcredit-ratingsystems.Thrivehasveryhighrepaymentratessofar,althoughitisstillanewventureanddefaultratesmayriseovertime.

103http://stiftelsenester.se/om-ester/SeealsocasestudyonEsterinUNCTAD,“Policyguideonentrepreneurshipformigrantsandrefugees”,October2018https://unctad.org/en/PublicationsLibrary/diae2018d2_en.pdf

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• Crowdfunding.Kiva,aninternationalnot-for-profitthat istheworld’s largestcrowdfundingplatformfor

socialgood,hasenabledpeoplearoundtheglobetolend$1.2billiontoentrepreneursintheUSandmorethan80developingcountriessince2005throughanetworkoffieldpartners.In2016KivalaunchedtheWorldRefugeeFund(WRF)specificallyforrefugeeentrepreneurs,facilitatingUS$3.5million(A$4.9million)inlendingin2017.SinceindividualslendaslittleasUS$25(A$35)each,theyarebothtolerantofrisksandcompassionate.Tomitigaterisk,Kivaand itspartnersengage ingroup lendingwherebyeach individualmemberguaranteestheotherindividualsinthegroup.Refugees’repaymentrateis96.6%.“Weareverymuchopentoexpandingtootherdevelopedcountriesthatarehoststolargerefugeepopulations,”saysseniorportfoliomanagerLevPlaves.However,grouplendingrequiresthesharingofpersonalfinancialdatawithotherborrowers,whichwouldrequireachangeto(orexemptionfrom)Australianlaw.

• Start-upswithhighgrowthpotential,notablyinthetechsector,maybeabletoattractequityfunding.InVictoria,YGAP’sFirstGensaccelerator,fundedprimarilybyLaunchVic,provides$25,000ofequitycapitaltotherefugeeandmigrantentrepreneurswiththemostpromisingsocialimpactventurestohelpthemgrowtheirbusinesses,aswellasopportunitiestopitchtoimpactinvestors,philanthropists,entrepreneursandindustryleaders.InSydney,Catalysrhasconnectedsomerefugeeentrepreneursinthetechsectortofunders.

Recommendation 12: Provide loan guarantees backed by federal and state governments to enable refugeeentrepreneurstoobtainlow-costloansfromcommercialbanks,togetherwithpartnerssuchasThrive.

Makingmorefundingavailabletorefugeeentrepreneurswouldyieldlargefinancial,economicandsocialreturns.Thefederalgovernmentalreadyinvestsnearly$3.5billionannuallyingrantstonewandgrowingbusinessesthatcan provide 50-80% of the necessary funds to start a business, introduce new products or increasecompetitiveness.104 But it does little to help refugee entrepreneurs and others from highly disadvantagedbackgrounds, such as IndigenousAustralians. Providing government loan guaranteeswould enable commercialbankstoofferincreasedlow-costfundingtorefugeeentrepreneurs,inpartnershipwithinitiativessuchasThrivethathelpassessborrowers’creditworthinessandprovideadditionalsupportsuchasmentoring.

Australia is one of the only developed countries that lacks a government-backed guarantee scheme for smallbusinesses.TheInstituteofPublicAccountantsadvocatedthecreationofsuchaschemeinAustraliain2018.105

IntheUK,entrepreneurscanborrowupto£25,000($46,300)intheformofagovernment-guaranteedStartUploanforatermofuptofiveyearsatafixedinterestrateof6%.Unlikemostcommercialbusinessloans,thisisanunsecured loan.106The loansareadministeredby theStartUpLoansCompany,partof thestate-ownedBritishBusinessBank,anddeliveredbyfinancepartners.Sharia-compliantfinanceisalsoavailable.ArigorousindependentevaluationfoundthatStartUploanswereeffectiveatstimulatingthecreationofadditionalbusinessesandprovidevalueformoney.107

Upskilling,ConnectionsandCapitalwillbemoreeffectiveinanEnablingenvironment.

104https://www.business.gov.au/assistance/entrepreneurs-programme105https://www.accountantsdaily.com.au/tax-compliance/11206-govt-pushed-on-loan-guarantee-scheme-for-small-firms106https://www.startuploans.co.uk/what-is-a-start-up-loan/107BritishBusinessBank,“EvaluationofStartUpLoans:Year2Report”,areportfromSQWLtdwithsupportfromBMGResearch,October2017https://www.british-business-bank.co.uk/wp-content/uploads/2017/10/SUL-Evaluation-Year-2-Report-Final-Report-October-2017.pdf

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Step5:EnablingEnvironment

Recommendation13:Lowerfederalandstateregulatorybarriersthatimpedeentrepreneurshipbyrefugeesandotherdisadvantagedgroups.

Reducingunnecessary regulatorybarrierswouldenablemore refugees to start viablebusinesses.The first stepwouldbetosurveyrefugeeentrepreneursandtheirsupportnetworkstoidentifythebiggestregulatoryhurdlesthattheyface.Oneobvioushurdleisthelackofofficialrecognitionofforeignqualifications.AlessobvioushurdleisthatimplementingtheKivacrowdfundingmodel—inwhichgroupsofborrowersguaranteeeachother—wouldrequireachangeindataprotectionlaws.

The next step would be to identify whether the regulations are truly necessary or whether their prudentialobjectivescouldbeachieved ina lessburdensomeanddiscriminatoryway.Forexample, theNewSouthWalesgovernmentrequireshairdresserstohaveaformalqualificationorapprovedequivalent.108Yetrefugeeswholackformal qualifications but have ample experience as hairdressers or barbers in their country of originmight beperfectlycapableofprovidinganexcellentserviceonaself-employmentbasisorintheirownsalon.Ashortcut,asonemightputit,wouldbeforastreamlinedassessmentofrefugeehairdressers’skillsbyAustraliancolleagues.

Thefinalstepwouldbetolobbyforachangeinthelaworregulationstoimproveopportunitiesforrefugees.

Recommendation14:Continueprovidinggovernmentwelfaresupporttorefugeeentrepreneursforthefirstyearaftertheirbusinesslaunch.

It often takes time forentrepreneurs to start earninga regular incomewhen startingabusiness. Somewill bedeterredfromdoingsobytheprospectoflosingtheirgovernmentbenefits;otherswillsuffergreathardshipandmayendupquittingabusinessthatcouldhavethrivedifgivenmoretime.

Toencourageentrepreneurshipandreducelonger-termfiscalcosts,itmakessensetocontinueprovidingwelfaresupportforaperiodoftime—ideallyayear—whileentrepreneursgetontheirfeet,asisalreadythecaseforNEISentrepreneurs. This should be applied more widely to graduates of other government-approved programs toencourageentrepreneurship.

Recommendation15:Createadditionalvisaplacesforwould-berefugeeentrepreneursoffshore

MostrefugeeentrepreneursinAustraliaarrivethroughthegovernment’sRefugeeandHumanitarianProgrammeandthenstartabusinessaftertheyhavesettled.Butinprinciple,would-berefugeeentrepreneursoffshorecouldgainentrytoAustraliabyobtainingabusinesstalentvisaviathebusinesstalentpathway.ThisallowsanapplicanttoestablishanewbusinessinAustralia,ordevelopanexistingone,ifnominatedbyanAustralianstateorterritorygovernmentagency.Applicantsalsoneedtohavenetbusinessandpersonalassetsofatleast$1.5millionandanannualbusinessturnoverofatleast$3million,ortohaveobtainedatleast$1millioninventurecapitalfunding.Asitstands,then,hardlyanywould-berefugeeentrepreneurswouldqualify.

Clearly, assessing the viability of a business plan is not among government officials’ core competences. Nor isexistingwealthapre-conditionofbusinesssuccess;manyofAustralia’smostsuccessful refugeeentrepreneurs,

108https://www.fairtrading.nsw.gov.au/trades-and-businesses/business-essentials/information-for-specific-industries/hairdressers

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notably Frank Lowy, arrived penniless. The business talent visa could be improved, and refugees’ access to itincreased,bylettingbusinessfundersdeterminetheviabilityofabusinessplanandremovingthewealthconditions.

AnexampleofinternationalbestpracticeisCanada,wherewould-beentrepreneurscanapplyforastart-upvisaiftheir business idea or venture gets the support of a designated venture-capital fund, angel-investor group orbusinessincubator.109SuccessfulapplicantstotheprogramareabletomigratetoCanadaaspermanentresidentswithnoconditionsattachedtothesuccessoftheirbusiness.110

TheCanadianmodeloughttobetrialledinAustralia.ApartnershipwithTalentBeyondBoundaries,aninternationalNGOthathelpsmatchskilledrefugeesoffshoretoemploymentopportunitiesinhostcountries,couldhelpidentifyprospectiverefugeeentrepreneursandmatchthemtobusinessfunders.

A complementary approach would be to create an entrepreneurship stream in the new Community SupportProgram(CSP).111Asitstands,theCSPallowscommunitygroups,businesses,familiesandindividualstosponsorrefugeeapplicantsforahumanitarianvisa.Applicantsneedtobeaged18to50,employable,willingto liveandwork inregionalareasandabletobecomefinanciallyself-sufficientwithintheir firstyear inAustralia.Sponsorscommittohelprefugeestointegrateintothecommunityandtosupportthemfinanciallyforthefirstyear.

TheCSPcouldbeimprovedinanumberofways.Inadditiontobusinessesbeingabletosponsorrefugeeapplicantswhomtheycommittoemploy,businessfunderscouldcommittosponsoringapplicantswithabusinessideaandhelpingthemtogetitstartedinAustralia.Ideally,theCSPquotaof1,000placesoughttoberaised,andsuchplacesoughttobeinadditionto,ratherthanpartof,theexistingquotaoftheRefugeeandHumanitarianProgram.

CreatingaCanadian-stylestart-upvisathatrefugeesoffshorecanaccessandanentrepreneurshipstreamintheCSPisnotasubstituteformeasurestoencourageentrepreneurshipamongrefugeeswhoarealreadyinAustralia.Butitcanbeausefulcomplementforsomerefugeesoffshorewithentrepreneurialpotential.

A Strategic approach to providing refugee entrepreneurs with Upskilling, Connections, Capital and an EnablingEnvironmentwouldbemosteffectivewithSpecificsupport.

Step6:SpecificSupport

Recommendation16:Targetsupportforrefugeeentrepreneursatdifferentstagesofbusinessdevelopment.

While it is important that all refugees should be able to choose an entrepreneurship pathway to economicparticipationiftheyfeelitisappropriate,scarceresourcesneedtobetargetedatthosewithaviablebusinessplan.Providingentrepreneurshipsupportinstagesensuresbroadaccessaswellascost-effectiveness.

Information.Inordertomakeinformeddecisionsaboutwhetheremployment,entrepreneurshiporeducationistheir best pathway to economic participation, all refugees could receive an introductory information andawareness-raising session about their entrepreneurship options. This should be provided by HSP (seeRecommendation1).

Pre-incubator.Thosewithentrepreneurialinclinationscouldthenreceivehelpinformulatinganddevelopingtheirbusinessidea,aswellasinformationonAustralianbusinesspracticesandlaws.Whilethefederalgovernmenthas

109https://www.canada.ca/en/immigration-refugees-citizenship/services/immigrate-canada/start-visa/designated-organizations.html110https://www.canada.ca/en/immigration-refugees-citizenship/corporate/publications-manuals/canada-wants-entrepreneurs.html111https://immi.homeaffairs.gov.au/what-we-do/refugee-and-humanitarian-program/community-support-program

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ausefulonline“Startingabusinessguide”,112thisisonlyinEnglishandassumesafairamountoflocalandbusinessknowledge.

Incubator.Thosewithaviablebusinessplancouldthenreceiveaccesstomentoring,capital,networksandotherpre-requisitesforlaunchingtheirbusiness.

Accelerator.Inthegrowthandexpansionphase,refugeeentrepreneursshouldcontinuetobenefitfromsupportnetworkstohelptheirbusinessesbecomeself-sufficientandself-sustaining.

Recommendation17:Provide,wherepossible,intensive,one-on-one,ongoingsupportinthepre-incubator,incubatorandacceleratorstages,andleveragesupportfromincubatorhubsandvolunteernetworkstokeepcostsdown.

Short generic courses may be appropriate and cost-effective for providing information and raising awarenessamongrefugeesasawhole.Butwide-rangingadviceandsupporttailoredtoprospectiverefugeeentrepreneurs’individualneedsismuchmoreeffectiveinthepre-incubator,incubatorandpost-incubatorstages,asthesuccessofSSI’sIgniteshows.Whilethisispotentiallymoreexpensive,leveragingsupportfromincubatorhubsandvolunteernetworkscankeepcostslow.

Subject to thecaveat that thecostof the Igniteprogram isunclear, itsmodelappearsworth replicatingacrossAustralia.

Recommendation18:Target supportat theneedsof specificgroups–notablyyoungpeople,womenandrefugeesinregionalandruralareas.

Certaincategoriesofrefugeeentrepreneurhaveparticularneedsthatrequirespecificsupport,especiallyyoungpeople,womenandrefugeesinregionalandruralareas.

Youngpeopleoftenhavehugeentrepreneurialpotential.Theyaremorelikelytohavefreshideas,areoftenmorewillingtotakerisks,andhavemoretimetogrowtheirbusinessifitissuccessful(ortochangecourse).Buttheyoftenlackexperienceandcontacts,especiallyiftheyarerefugees.Targetingentrepreneurshipprogramsatyoungpeople makes sense. This may be particularly attractive to private finance providers, who hope to acquiresuccessful,long-termfutureclients.

OneexampleofinternationalbestpracticeisFuturpreneurCanada(Box10).

112https://www.business.gov.au/Guide/Starting

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Box10:FuturpreneurCanada

FuturpreneurCanada’sfinance,mentoringandsupporttoolshavehelpedyoungentrepreneursagedbetween18and39launchnearly10,000Canadianbusinessessince1996.Eachbusinesscreatesanaverageoffivejobswithinfiveyearsofitslaunch.113

ItsNewcomerprogramofferstailoredsupporttoyoungrefugeesandmigrantswhohavebeeninCanadalessthanfive years and lack a credit history. Like Thrive, it uses character-based lending to assess borrowers’creditworthiness.SuitableborrowerscanthenborrowuptoC$15,000(A$16,00)fromtheBusinessDevelopmentBank of Canada over five years at the prime rate plus 3.75%, with interest-only payments for the first year.Entrepreneursalsoreceivetwoyearsofexpertbusinessmentoringandawiderangeofothersupport.

Femalerefugeeentrepreneursfaceawholehostofadditionalchallenges,(seesection2.4above).Somewomenmayprefertotakepartinfemale-onlyprograms,othersinmixedones.Eitherway,programstosupportrefugeeentrepreneursshouldtakeaccountofwomen’sspecificneeds.Forinstance,childcareoptionsshouldbeofferedforactivitiesoutsideschoolhours.

Australia has several successful initiatives for female refugee entrepreneurs, notably the Brotherhood of StLaurence Stepping Stones to Small Business program. One example of international best practice is the EsterFoundation’sprograminSweden(Box11).Itworkswithverydisadvantagedwomeninaneconomythathasmanyregulatorybarriers,yetithasaveryhighsuccessrate.

113https://www.futurpreneur.ca/en/about/

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Box11:Ester(Sweden)

Esterseekstoempowerunemployedrefugeeandmigrantwomenbyprovidingthemwiththetraining,supportandcapital they need to start their own businesses and become financially independent. It provides knowledge,networksandfinancetosmallgroupsofmarginalisedwomenwhohavenotbeenabletofindajobthroughotherprograms.Itwaslaunchedin2012intheSkåneregionofcentralSwedenandhassinceexpandedtothecapital,Stockholm.

Esterofferstwoprograms:PreEsterandEster.ThePreEsterprogramfeaturedasanexampleofbestpracticesinthe European Commission’s Handbook on Integration for Policy-Makers and Practitioners. It is a nine-weekintroductory course that includes Swedish language lessons and classes on business knowledge and personalleadershipskills.

TheEsterprogramisan18-monthcoursesplitintothreesix-monthparts.Thefirstphaseinvolvesfull-timetraininginalltheskillsneededtostartabusiness.Womenaresplitintogroupsoffivetotenandeachparticipantreceivesapersonalbusinessadviserwhoworkswithhertodevelopabusinessplan.Thesecondphaseinvolvesregisteringand starting the company, and seekingmicrofinance. The thirdand finalphase involvesmentoring tohelp thebusinessbecomesustainable.

ParticipantsreceivemonthlygrantsfromtheSwedishEmploymentAgencyand/orwelfaresupportfromthesocialauthoritiesuntiltheyregistertheircompany.

Twenty-onewomen,allofwhomhadbeenunemployedforsixtoeightyears,participatedintheSkånepilotproject.Sixsubsequentlystartedabusinessandtenfoundajob—a76%successrate—whilefivearestill joblessandreliantongovernmentsupport.ThatisaremarkablesuccessrategiventhatEsterfocusesonhelpingwomenwhohavebeenoutofworkforaverylongtimeandwhodon’tspeakEnglishorSwedishatall.ItistooearlytoevaluatethesuccessoftheStockholmproject.

ThePre-EsterprogramcostsSEK20,000-30,000($3,000-$4,500)perparticipant.The18-monthEsterprogramcostsSEK150,000 ($22,600).114 This compares with an estimated annual fiscal cost of SEK500,000 ($75,300) forunemployedrefugees.

Onepromisingbusinessoptionformanyfemalerefugeesmaybeprovidingchildcare.TheUSORRoffersaspecificmicroenterprisedevelopmentscheme(Box12)thatcouldbereplicatedinAustralia.

114InterviewwithLinnNey

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Box12:ORR’sRefugeeFamilyChildCareMicroenterpriseDevelopment(RFCCMED)program(US)

Launchedin2011,theRefugeeFamilyChildCareMicroenterpriseDevelopment(RFCCMED)programservesrefugeeswhohavelivedintheUSforfiveyearsorlessandareinterestedinstartingachildcarebusinessintheirownhome.115

Itprovidesrefugeeparticipantswithtraining inchildcareandbusinessskills, togetherwithhelp inapplying forachildcarelicence.ItalsooffersparticipantsacashstipendofuptoUS$3,000(A$4,200)forsuppliesandmaterialsneededtoruntheirbusinesses.

Refugeewomenlearnaboutstateandfederalchildcarelaws,regulationsandlicensingrequirementsandAmericanculturalnormsonchildcareandchilddevelopment.Byencouragingrefugeewomentoapplytheirnewchildcareknowledgeandskillsinthejobmarket,theprojecthelpsthemtobettertheirEnglish,advancetheireducation,learnbasicfinancialskillsandimprovetheireconomicopportunities.

Theprogramaimstohelprecentlyarrivedrefugeestoearnanincomethatallowsthemtoliveindependently.ManyrefugeescometotheUSwithexperiencecaringforsmallchildren.Theymayalsohaveyoungchildrenoftheirowntocarefor,makingitdifficultforthemtoworkoutsideoftheirhome.TheRFCCMEDprogramallowstheserefugeestousetheirchildcareskillstoearnanincomewhilealsocaringfortheirownchildrenifneeded.Thesebusinessesmayalsohelpotherrefugeesfindwork,astheyareabletocarefortheserefugees’childrenduringtheworkday.

RFCCMED is operated by local community organisations that have been awarded a three-year grant. Granteespartnerwithotherlocalorganisationssuchasnon-profitagenciesthatsupportchildcareprovidersandgovernmentofficesresponsibleforissuingchildcarelicences.

Infiscalyear2019,tengranteeseachreceivedgrantsofUS$175,000(A$243,000),totallingUS$1.75million(A$2.4million).

Refugeeentrepreneurscouldalsoplayan important role in regenerating regionaland ruralareas, soefforts toencouragethemtosettleinsuchareasshouldbeaccompaniedbyspecificsupportforentrepreneurship.

Oneparticularopportunityforrefugeeentrepreneursinregionalandruralareasisfarming.Manyrefugeeshavefarmingexperience,andwithyoungAustraliansincreasinglyleavingtheland,ruralcommunitieswouldbenefitfromaninfluxofrefugeefarmers.Inadditiontohiringrefugeesasfarmworkers,specificsupportcouldbeprovidedtohelprefugeesdeveloptheirownfarmbusinesses.

OneexampleofinternationalbestpracticeisBigRiverFarmsintheUS(Box13),whichprovidesrefugeeswithlandandsupportineveryaspectofbusinessdevelopment,includingconnectionstowholesalers,farmers’marketsandretailbuyerssuchasrestaurants.

115https://www.acf.hhs.gov/orr/programs/refugee-family-child-care

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Box13.BigRiverFarms(US)

BigRiverFarms,acertifiedorganicvegetablefarminMarineonSt.Croix,Minnesota,providesrefugeeandmigrantfarmerswithaplotoflandandaccesstofarmequipmenttogetherwithtrainingsothattheyareabletocultivatetheir own small, sustainable, commercial farms.116 Through its Community Supported Agriculture program itprovidesamarketforthefarmers’produceaswellassupportwithmarketinganddevelopingtheirindependentdistributionchannels.

BigRiverFarmsisoperatedbythenon-profitMinnesotaFoodAssociationtoprovideaguaranteedmarketforthefarmerstheysupport,andtogeneratefundsneededtotrainfuturefarmers.

Beneficiariesofitsground-breakingCommunitySupportedAgricultureprogramincludeMohammedGaabanewhoarrivedintheUSasarefugeefromSomaliain2006.HestartedtheMinnesotaFoodAssociationtrainingprogramin2011withlimitedEnglishandlittleincomeorfamiliaritywithUSfoodsystems.Threeyearslater,attheageof78,heboughthisownfarm,ChickenHeadFarm.117

Aswellasprovidingentrepreneurswiththesupporttheyneed,weneedtoSpotlightsuccessstoriestochangeattitudes.

Step7:Spotlightsuccessstories

Recommendation19:CelebratesuccessfulrefugeeentrepreneursasrolemodelstoinspireotherrefugeesandtocreateamorepositivenarrativeaboutrefugeesamongAustralians.

Inspiringpersonalstoriescandomoretomotivateandchangepeople’smindsthanstatistics.Whiletheevidencepresentedinthisstudyiscompelling,highlightingthesuccessofestablishedentrepreneurssuchasTanLeandHuyTruong can help shift public attitudes about refugees. It can be helpful too to remind people that successfulentrepreneurswhoarenotidentifiedasrefugees(suchasWestfield’sFrankLowyorGoogleco-founderSergeyBrin)comefromarefugeebackground.

116http://www.mnfoodassociation.org/our-csa117https://s3.amazonaws.com/sfc-dynamic-content/uploadfiles/1302/Chicken%20Head%20Farm%202015.pdf

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Recommendation20:CreateanannualRefugeeEntrepreneuroftheYearawardsprogram.

Upcomingtalentalsoneedstoberecognised.High-profileRefugeeEntrepreneuroftheYearawardscouldbothpromoteindividualwinnersandhighlightthecontributionofrefugeeentrepreneursmorebroadly.

Tomaximisetheirimpact,theawardsceremonyshouldbeheldoutsideRefugeeWeek,withappropriatecorporatesponsorship,high-profilejudgesandmediapublicity.Variouscategoriescouldbecreated,forinstanceforyoungentrepreneursandfoundersofsocialenterprises.Therecouldbebothamaleandafemalerefugeeentrepreneuroftheyear.AwardscouldbelimitedtorefugeeswhohavearrivedinAustraliainthepasttenyears,alongsideaLifetimeAchievementawardforestablishedrefugees.

Therecouldalsobeacategoryforinitiativesthatsupportrefugeeentrepreneurship.Thiscouldhelpraiseawarenessandfundsforsmallorganisationsthatdovaluableworkthatoughttobecelebrated,expandedandemulated.Moreambitiously, this could be the launchpad for a broader awareness-raising campaign among the likes ofphilanthropists,familytrustsandcorporatefoundations;impactinvestors,angelnetworksandventurecapitalists;regionalfundingandservicedeliveryorganisationssuchasAustraliaPost;InclusiveAustralia,aneworganisation,not yet officially launched, targeting the general public’s attitudes to inclusiveness; and entrepreneurshipecosystemorganisations,especiallythosewithanexplicitsocialimpactagenda.

Recommendation21:EncouragelocalareaswithsubstantialrefugeecommunitiestodeveloplocalCommunityHeroawards.

Manyrefugeeentrepreneurshelprevitalisetheirlocalcommunityinallsortsofwaysthatmaynotbesignificantenoughfornationalrecognition,butwhichcanberecognisedlocally.LocalauthoritiesinplaceswithlargerefugeepopulationssuchasFairfieldcouldcreateCommunityHeroawardstocelebratetheachievementsoflocalrefugeeentrepreneursandenhancecommunitycohesion.

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4. CONCLUSIONRefugeesinAustraliahavegreatentrepreneurialpotential.Despitethehugechallengestheyface,theyarealreadymuchmorelikelytostartabusinessthanpeopleborninAustralia.Theycouldachievemuchmorewithincreasedinvestmentandsupport,whichwouldyieldlargefinancial,economicandsocialreturnsforlocalcommunitiesandsocietyasawhole.

BasedonAustralianandinternationalbestpractices,thisreporthaspresentedSevenStepstoSUCCESSforrefugeeentrepreneurship:aStrategicapproach,Upskilling,Connections,Capital,anEnablingenvironment,SpecificsupportandSpotlightingsuccessstories.

Thesesevenstepswillbemosteffectiveiftheyareintroducedasapackage.But,politicallyandpractically,someofthe21recommendationswillbeeasiertoimplementthanothers.

The immediate priority is to raise awareness of the existing contribution and huge potential of refugeeentrepreneursamongpolicymakers,practitionersandthepublicatlarge.PublicisingthefindingsofthisreportandlaunchingRefugeeEntrepreneuroftheYearawardsarekeytoachievingthis.

Another immediatepathforward istoreplicateandexpandthepiecemealbutpromising initiativesweidentify,suchastheNEISHighlyDisadvantagedTrial,Ignite,ThriveandSteppingStones.Thrivestandsoutasaninnovativeventurethathasscaledupquicklyandsuccessfully.AnotherpromisingprogramthatcouldbereplicatednationallyisSSI’sIgnite.

At the same time, delivering substantial change across Australia requires a strategic approach. Refugeeentrepreneurs often fall between two stools: neither refugee settlement service providers nor programs toencourageentrepreneurshiptendtosupportthem,letaloneconsidertheirspecificneeds.Entrepreneurshipcanbecomeaviableoptionforallsuitablerefugeesbyassessingentrepreneurialaptitudequickly,providingappropriateinformationandtraining,andcreatingonlineplatformsforknowledgesharing.Thisisreadilyachievable.

Morechallenging,butalsocrucial,aremeasuresthatrequiremorepublicfunding,notablytoenableskilledrefugeesto acquire local qualifications, to guarantee small-business loans and to maintain welfare payments toentrepreneursintheirfirstyearofstartingabusiness.Buttheupfrontcostwouldpayforitselfbyyieldinglargefinancial,economicandsocialreturnsforlocalcommunitiesandsociety.

Alllevelsofgovernmenthaveanimportantroletoplayinsupportingrefugeeentrepreneurship,andprogresswillalsorelyonnot-for-profitinitiatives,networksofvolunteermentorsandnon-traditionalsourcesoffinance.Theseeffortscanbeenhancedbythejudicioususeofdigitaltechnologiestoconnectrefugees,testtheirskills,monitortheirachievements,assesstheircreditworthiness,andmuchelse.

Underpinningallourrecommendationsisachangeofmindset.Refugeesshouldbeviewednotaspassiverecipientsofassistancebutratherasdynamicactors.Withahandupandtheirownhardwork,theycanandwillflourish.