Refugees

How Businesses Can Help Refugees And Why It’s A Good Investment

On World Refugee Day, We challenge companies to support refugees by tapping their core competencies -- we think doing so is good business. 

We are in a refugee crisis. There are 65 million refugees and internally displaced persons globally, more than any time since World War II. Many of these refugees have been forgotten along the knotty path from displacement to integration.

Most refugees who flee their homes today are not finding shelter in formal refugee camps. Instead, they are making their way into informal settlements, urban settings in neighboring states, or safer regions of their own country. Many of these people remain isolated, unserved, and unwanted in their host community. For others, the temporary shelters and rudimentary services of refugee camps are not a stepping stone to something more stable but a permanent reality. In Kenya, for example, Somali refugees have resided in camps for more than 20 years – camps the government is now pushing to close. Yet, the lucky few who are resettled in established communities struggle with long-term integration. In fact, more than 40% of working-age refugees in the UK and Belgium remain unemployed ten years after arriving, spurring resentment and friction with host populations. A recent Tent Foundation study on the economic dividends of investment in refugees showed that public investment of €1 in a refugee, will yield a return of nearly €2 in GDP growth within 5 years — the business community should vocally support investments with such a strong return. Additionally, businesses can, and should, help address many of the systemic challenges that refugees, host countries and support organizations face in managing the refugee crisis. Increasing international and local business involvement is not only the right thing to do, but also makes good business sense.

Public investment of €1 in a refugee, will yield a return of nearly €2 in GDP growth within 5 years

Fulfilling Refugees’ Needs as Consumers

Business innovation and entrepreneurship can improve conditions in refugee settlements. These settlements are akin to haphazardly constructed cities that house hundreds of thousands of residents. The majority of the residents need basic services: housing, food, education, hygiene and medical services. UNHCR and various aid agencies do a laudable job of addressing these needs under very difficult conditions. However, businesses’ clear comparative advantages in product design, manufacturing, logistics and service delivery could improve quality and lower cost. IKEA’s partnership with UNHCR to develop high-quality, easily-assembled shelters for refugees is a great example of a company applying its core capabilities to this challenge. Smaller and local companies also have a role and could use their proximity and local supply chains to more efficiently address the needs of refugee populations.

Training a refugee doctor to practice in the UK is 10% of the cost of training a new doctor, can take a fraction of the time, and may allow locals to immediately tap into the skills of a seasoned and experienced professional.

When refugees resettle in established communities, the challenge of integration must be overcome. Public-private partnerships can allow host countries to tap private sector ingenuity to more efficiently receive and settle refugees. For example, Moni, a start-up mobile money transfer app, has rapidly built a client base by teaming with the Finnish Immigration Service to instantly distribute cash to refugees.

Moni provides a crucial service for refugees — particularly those who are unable to open bank accounts due to lack of proper documentation.

In some ways, resettled refugees, with their long term potential as economic contributors, and lack of pre-existing loyalties as consumers, share market characteristics with college students. Banks, consumer brand companies, and mobile networks have long understood the value of placement on college campuses to demonstrate value and build loyalty. Similar efforts by companies such as L’Oreal and Deutsche Telekom to provide much-needed free or discounted products to newly arrived refugees, are not only generous, but are smart long-term investments in potential lifelong customers. This is equally true for small neighborhood businesses that invest in engaging and welcoming new community members.

Refugees as a Pool of Potential Workers

Once they have resettled, the perseverance, resourcefulness, and diverse perspectives of refugees make them particularly attractive employees and high potential entrepreneurs. Andy Grove of Intel and Ashish J. Thakkar of Mara Group are just a few examples of refugees who achieved business success. More broadly, Tent Foundation’s Public opinion research found that locals in countries with few work restrictions on refugees recognize refugees’ strong work ethic.

Entrepreneurship is one means of leveraging refugees’ independence and tolerance for risk. Sharing economy businesses, Uber and TaskRabit, for example, are changing the way business is being done by leveraging technology to match entrepreneurs with eager clients. Large refugee populations could become bases to rapidly recruit and train partners that enable new sharing economy business models.

In emerging markets, companies can invest in supplier development programs that help new small businesses become their suppliers. Such efforts promise to reduce input costs and build more resilient supply chains for the investor, while helping new companies get started and grow.

When legally allowed to work, refugees – of all skill levels – have much to offer. Unskilled refugees are often willing to fill open positions that have not attracted local talent. Filling these jobs can often create additional employment for local managers and professional staff while providing livelihoods for refugees. Take Daniel Kok, the owner of a small German flooring business who – after trying in vain to find a local trainee – was able to fill his apprenticeship position with an Eritrean refugee. Mr. Kok has found a valuable new team member, and he may have even identified a future successor for himself.

At the other end of the spectrum, highly skilled refugees should be able to continue to serve as professionals and leaders in their fields. However, too often, lack of recognition of foreign credentials limits their opportunities, resulting in doctors and engineers driving taxis. Businesses struggling to find enough suitably qualified employees in specialized fields, can quickly and cost-effectively invest in re-credentialing refugees. Training a refugee doctor to practice in the UK is 10% of the cost of training a new doctor, can take a fraction of the time, and may allow locals to immediately tap into the skills of a seasoned and experienced professional. Allowing such professionals to contribute in more junior roles in their field as they are credentialed (e.g., as a paralegal rather than an attorney) helps refugees to earn a livelihood while they re-credential, further benefiting them, their families and the economies of their new host societies.

WE INVITE OTHER COMPANIES TO JOIN US IN OUR COMMITMENT TO SUPPORT REFUGEES BY ADVOCATING FOR REFUGEES IN YOUR COMMUNITY, INVESTING IN REFUGEES, AND JOINING THE TENT ALLIANCE AT TENT.ORG.

This article was originally published on Global Daily and is authored by Ruma Bose, President of the Tent Foundation and President of Chobani Foundation. James I. Mwangi, Executive Director of Dalberg Group. Ms. Bose and Mr. Mwangi have both served on the United Nations Foundation’s Global Entrepreneurs Council.  

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