Transnational Entrepreneurs:

Presentation to IDRCUnleashing Entrepreneurship Conference

April 8, 2005

Carlo Dade, Senior Advisor

Canadian Foundation for the Americas (FOCAL)

Transnationalism a profound shift in development

Migration as the Human Face of Globalisation

Hyper-migration

Difference today is1. Trade

2. Travel

3. Telecommunications

4. Transfers

Evidence of Shift

Jamaica 2.6 2.6 100%Haiti 7.6 4 52%Guyana 0.7 1 143%Mexico 104 30 28%

Domestic Population

Diaspora Population %

Evidence of the Shift

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

Exports from Country X Imports to Country X

Economic Impact of 10% increase in immigration to US and Canada

“Particularly in the case of South Asia, there is a striking disjuncture between hugemigration flows and very limited economic links.”“Asian Canadians and Canada’s Foreign Policy”. Asia Pacific Foundation. 2003.

Evidence of the ShiftRemittances to Selected Countries, 1970-98

0

1000

2000

3000

4000

5000

6000

7000

8000

9000

10000

1970 1975 1980 1985 1990 1995 1998

US

$ m

illio

ns

India

Mexico

Turkey

Egypt

Nigeria

Dom.Rep.

Beyond Remittances

1. Remittances are more than money.

2. Indication of deeper, wider, more dynamic exchange within communities.

3. These exchanges and actors are crucial to effective, relevant development work.

4. Redefine communities in which we work and how we work in/with them.

5. How to respond to new reality, new demands, new possibilities, new partners.

Transnationalism a profound shift in development

As a result:Transnational communities• dispersed geographically • but • united by culture, language, economics. • Resources, knowledge and ideas are shared within

community at speed of modern business • geography and national borders close to irrelevant.

Leads to Transnational Markets, Entrepreneurs

The Response

Transnational Enterprises1. Response to new opportunities of globalization

2. Response to lower cost and greater availability of technologies of trade

3. Response to existence of multi-stranded and deep cultural, national, ethnic ties.

Old and New phenomenon?

Types of Transnational Enterprise

Ethnic enterprises

Circuit firms

Cultural enterprises

Return migrant enterprises: – Also includes franchises

Importance for PSD

Destination Country – Canada, US, UK

• Economic prospects of immigrants depend on host-country labour market AND self-employment opportunities

• Immigrant entrepreneurs do better economically than their waged co-ethnics (Portes and Zhou 1999; Logan, Alba, and McNulty

1994; Wilson and Martin 1982).

Importance for PSD

Home Country – China, India, Philippines, Jamaica, Haiti

• Access to new capital

• Access to new (more profitable) markets– Which is larger, population of Canada or population of

Mexicans in US?

• Access to new technologies/ideas

Importance for PSD

Some sectors of economy increasingly dependent on Diaspora

– home construction, DR

– investment, China

– services, everywhere

Requires re-thinking PSD development strategies in areas of high emigration or migration and especially in these sectors.

Activities Linking Immigrants to Home Country

ActivityEmployee/

Wage Worker Domestic

EntrepreneurTransnational Entrepreneur

Imports Goods from Abroad 8.2% 9.9% 31.9%Exports Goods 6.5% 8.9% 18.1%Invests in Business in Home Country 5.9% 11.7% 26.4%Invests in Real Estate in Home Country 20.7% 28.2% 41.9%Has Been an International Courier 10.1% 8.3% 23.6%Hires at Least One Employee in Home Country 0.0% 30.8% 42.2%Frequency of Business Travel Abroad:

at least twice per year 7.1% 17.3% 28.4%six times or more per year 0.9% 6.1% 14.6%

Total number 742 180 276

Source: Portes, Haller and Guarnizo 2001.

US vs. Canada

0.0%

1.0%

2.0%

3.0%

4.0%

5.0%

6.0%

7.0%

8.0%

9.0%

Exports from Country X Imports to Country X

Economic Impact of 10% increase in immigration to US and Canada

“Particularly in the case of South Asia, there is a striking disjuncture between hugemigration flows and very limited economic links.”“Asian Canadians and Canada’s Foreign Policy”. Asia Pacific Foundation. 2003.

Research Issues– US-Canada immigration and trade linkage

discrepancy.

– Survey transnational economic activity by immigrants in Canada.

– Map ICT usage by transnational entrepreneurs.

– Catalogue Diaspora projects receiving and sending countries.

Policy Issues

– Rationalize domestic and foreign business support services to reflect transnational reality.

– Examine aid and trade agreements to find hindrances and missed opportunities.

– International cooperation.

MDGs

References to Diaspora linkages in Martin-Zedillo report Problematic

• Too brief and general, need focused research and best practice recommendations

• Recommendation in Chapter 5, Bad Idea “Innovative schemes are also needed to transform financial flows from the many diasporas into long-term productive investment in their home countries.”

But report hints at importance of Diaspora linkages– Discussion of PSD incomplete without this– Success of PSD programmes doubtful without this