Why Entrepreneurship Could Ease the Refugee Crisis

Entrepreneurial ventures improve life for thousands in refugee camps.

As European nations continue to see an influx of hundreds of thousands of refugees fleeing civil war in Syria, one question looms large: Where—and how—will these displaced individuals live? A few will build new lives in other countries, but most could live for years in refugee camps, where existence can be precarious. In a recent paper, two researchers from the U.K.'s Cambridge Judge Business School explore how governments can provide refugees with a better quality of life.

Marlen de la Chaux, a doctoral student, and Helen Haugh, Senior Lecturer of Community Enterprise, suggest that one solution could be especially effective: entrepreneurship. By encouraging entrepreneurship in refugee camps, nations can reduce aid dependency while helping refugees maintain their dignity and lead meaningful lives.

De la Chaux and Haugh cite Kenya’s Dadaab, one of the world’s largest camps, noting that its refugee enterprises generate close to US$25 million annually—around $16 million of which benefits nearby communities. But only a fraction of Dadaab’s residents engage in entrepreneurial activity, suggesting a great deal of untapped potential.

The paper outlines three barriers to refugee camp entrepreneurship: a lack of functioning markets, inefficient legal and political systems, and poor infrastructure. The pair argues that policymakers should acknowledge that refugee camps are often long-term, not temporary, solutions; in fact, the camps often become small cities in themselves. Given that, governments should take steps to design stronger camp infrastructures, connect refugee camp organizers to microlenders and innovation hubs that provide business training and seed capital, and outsource work to refugees.

Such efforts, the co-authors write, not only could help reduce camp conflict and resentment between refugees and local citizens, but also could contribute significantly to the local economy.

De la Chaux and Haugh presented “Entrepreneurship and Innovation: How Institutional Voids Shape Economic Opportunities in Refugee Camps” at the 2015 Annual Meeting of the Academy of Management in Vancouver, Canada. The paper is available at insight.jbs.cam.ac.uk/assets/Marlen-de-la-Chaux-Entrepreneurship-and-Innovation1.pdf.