Relational Dynamics within Refugee Business Incubators: Bridging Refugee Entrepreneurs to the Host-Country Entrepreneurial Ecosystem
Disadvantaged Entrepreneurship and the Entrepreneurial Ecosystem
ISBN: 978-1-80071-451-9, eISBN: 978-1-80071-450-2
ISSN: 2040-7246
Publication date: 17 January 2022
Abstract
The world is currently facing one of the most significant refugee crises in history, posing challenges to policymakers in host countries needing to facilitate socio-economic integration of refugees urgently. Policymakers and scholars have started shedding light on the entrepreneurial potential of refugees. Refugees confront considerable institutional barriers in their new environments. Particularly challenging is that they lose connection to their home country ecosystem through forced displacement and are not yet well-embedded in the local entrepreneurial ecosystem of the host country. The disconnection to the local ecosystem hinders refugees from accessing various resources essential to entrepreneurial activities. Against this background, this chapter illuminates the role of business incubators in integrating refugee entrepreneurs into the local entrepreneurial ecosystem, paying particular attention to relational dynamics within incubators. This study conducts explorative qualitative research with a single case study of a German business incubator for refugees. This study identifies three types of relational dynamics that characterise operation of refugee business incubators and two mechanisms constructive and descriptive to their mission. Finally, this study derives practical implications for refugee business incubators and policymakers in refugee-hosting countries.
Keywords
Citation
Jürgens, C., Ramalingam, A., Zarembski, R., Harima, A. and Yeshi, T. (2022), "Relational Dynamics within Refugee Business Incubators: Bridging Refugee Entrepreneurs to the Host-Country Entrepreneurial Ecosystem", Pickernell, D.G., Battisti, M., Dann, Z. and Ekinsmyth, C. (Ed.) Disadvantaged Entrepreneurship and the Entrepreneurial Ecosystem (Contemporary Issues in Entrepreneurship Research, Vol. 14), Emerald Publishing Limited, Leeds, pp. 147-169. https://doi.org/10.1108/S2040-724620220000014007
Publisher
:Emerald Publishing Limited
Copyright © 2022 Emerald Publishing Limited
1 Introduction
Over the last decade, public interest in the refugee crisis has increased worldwide. The forcibly displaced population has continuously increased in recent years. By the end of 2019, 79.5 million people had been forcibly displaced worldwide, 26 million of which were refugees fleeing from their home countries due to conflict, persecution, or serious human rights violations. In 2019, with 1.1 million refugees, Germany had the fifth-largest refugee population in the world (UNHCR, 2020). Syrians were the largest population-seeking asylum in Germany, in 2019 alone Germany recieved 165,938 asylum applications, Syrians making up 41,094, followed by 15,348 Iraqis (AIDA, 2019).
Economic integration of newly arrived refugees is a significant concern to policymakers in host countries as refugees face substantial barriers in the job market due to several institutional factors. Entrepreneurship has received increasing attention from policymakers and scholars as a means of quick and efficient economic integration of refugees (Alrawadieh, Karayilan, & Cetin, 2019; Bizri, 2017; Gürsel, 2017). On one side, recent research on refugee entrepreneurship has shown that refugees face significant disadvantages in the labour market of their host countries, pushing them to become entrepreneurs (Bakker, Dagevos, & Engbersen, 2017; Lee, Szkudlarek, Nguyen, & Nardon, 2020). On the other side, some refugees demonstrate a strong entrepreneurial orientation (Freiling & Harima, 2019; Obschonka, Hahn, & Bajwa, 2018) and do exploit business opportunities in their new environments by utilising migration backgrounds (Mawson & Kasem, 2019) and previous entrepreneurial experiences (Wauters & Lambrecht, 2006) despite significant institutional differences between home and host countries.
Starting a business in a fairly new environment is especially challenging for refugees because they are not yet embedded in the entrepreneurial ecosystem of the host country, while forced displacement tore them from that of the home country. Entrepreneurial ecosystems refer to an interdependent set of actors governed in such a way that it enables entrepreneurial action (Stam, 2017). Embeddedness in an entrepreneurial ecosystem allows entrepreneurial agents to access various resources available in the region (Welter & Smallbone, 2012). However, refugees encounter significant institutional barriers, which make it difficult for them to develop networks with stakeholders in the local entrepreneurial ecosystem. Some recent studies illuminated the role of accelerators in integrating foreign entrepreneurs into the local ecosystem (Brown, Mawson, Lee, & Peterson, 2019; Harima, Harima, & Freiling, 2020). Furthermore, studies on refugee entrepreneurship have also shed light on the role of organisations, which support refugees’ entrepreneurial activities, particularly business incubators (Harima & Freudenberg, 2020; Harima, Freudenberg, & Halberstadt, 2019; Meister & Mauer, 2019). Since the mid-2010s, the number of incubators and accelerators offering support programmes for refugee entrepreneurs in Germany has been increasing due to the recent refugee influx. Most of them are operated by non-profit organisations funded by European Union or national grants (Isaak, 2020). Such organisations can help fill the gap between refugees and the local entrepreneurial ecosystem, which enhances survival chance and accelerates the business development process.
Previous studies on such refugee business incubators primarily focussed on understanding how such organisations supported refugees’ entrepreneurial activities. These incubators, however, need to build intensive relationships with refugee entrepreneurs, who face significant institutional barriers and suffer from high degrees of uncertainty and psychological burden (Wauters & Lambrecht, 2008). Such relational dynamics within the incubator determine whether and to what extent such organisations can support refugees. Nevertheless, we still know little about the relational dynamics specific to such organisations. Therefore, this study will answer the following research questions:
How relational dynamics are constructed between refugee entrepreneurs and refugee business incubators?
Which factors do influence these relational dynamics constructively or disruptively?
To answer these research questions, we conducted an exploratory research study based on a single case study with a refugee business incubator in Germany. The study develops a framework by exhibiting relational dynamics within the refugee business incubators using a grounded theory approach. We identify three types of relational dynamics that characterise the operation of refugee business incubators.
This chapter is organised as follows: It starts with a literature review on the current situation of refugee entrepreneurs and business incubators. The section following describes the methodological approach selected for this study. After the methodology section, we describe the selected case, which provides contextual information of the research setting. After that, we develop a set of research propositions based on the results. This is followed by discussions and conclusions.
2 Prior Work: Literature Review
2.1 Refugee Entrepreneurship
European countries have experienced high immigration rates over the past few years, posing significant challenges for host societies to find ways to integrate refugees, displaced persons, and other migrants. Forced displacement leads to numerous adversities, such as traumatic experiences (Goodman, Vesely, Letiecq, & Cleaveland, 2017; Schmitz, Jacobus, Stakeman, Valenzuela, & Sprankel, 2013), unrecognised academic and vocational qualifications (Colic-Peisker & Tilbury, 2007), and language and cultural barriers (Embiricos, 2019; Lee, Sulaiman-Hill, & Thompson, 2014). Consequently, refugees face substantial difficulties in the labour market of their host countries, which hinders their economic integration (Connor, 2010).
Entrepreneurial activities offer alternative solutions for refugees’ socio-economic integration and a chance for them to restore lives in their new settlement. Researchers pointed out several positive outcomes from refugees’ entrepreneurial activities, such as economic contribution to host economies (Betts, Omata, & Bloom, 2017) and creation of (social) innovations (Betts, Bloom, & Weaver, 2015). While refugees often bring previous entrepreneurial experience and entrepreneurial aspirations to their host countries (Obschonka et al., 2018), they face significant obstacles when they develop a business. For instance, Alrawadieh et al. (2019) showed refugee entrepreneurs are confronted with challenges divided into legislative and administrative, financial, socio-cultural, and market-related challenges.
Recent studies have revealed that entrepreneurial activities of refugee entrepreneurs differ from migrants. While research on migration entrepreneurship has a long history, it has seldomly treated refugees as different entrepreneurial agents from migrants (Grey, Rodríguez, & Conrad, 2004; Lyon, Sepulveda, & Syrett, 2007; Portes & Manning, 1986). Both migrants and refugees leave home countries to seek better opportunities and living conditions. While the former voluntarily decide to move to another country, the latter is forced to do so. Refugees often experience traumatic events in their home countries or during the evacuation, which negatively influences their long-term mental condition (Goodman et al., 2017).
Due to the forced displacement, the relationship of refugees to their home countries also differs from migrants. On one side, migrants commonly maintain ties to home countries often having the intention to return someday. By leveraging these ties, as well as resources in home and host countries, migrants often conduct transnational entrepreneurial activities (Brzozowski, Cucculelli, & Surdej, 2019; Harima & Baron, 2020; Pruthi, Basu, & Wright, 2018) or become returnee entrepreneurs (Mayer, Harima, & Freiling, 2015; Wright, Liu, Buck, & Filatotchev, 2008). On the other side, refugee entrepreneurs are unable to return home, at least temporarily, and have no or limited access to networks and resources in their home countries (Cortes, 2004; Harima, Periac, Murphy, & Picard, 2021). Compared to migrants, refugees tend to encounter more significant institutional barriers in the host country since they often do not know where their journey ends, which makes it impossible for them to prepare for a particular country. Furthermore, legal status as refugees constrains their socio-economic activities (Embiricos, 2019; Kachkar, Mohammed, Saad, & Kayadibi, 2016).
Scholars commonly acknowledge that refugees bring entrepreneurial potential to the host country but also face significant institutional barriers (Alrawadieh et al., 2019; Lyon et al., 2007). Even when they have rich entrepreneurial experience in their home country, forced displacement makes it significantly more difficult to access resources embedded in the home country’s entrepreneurial ecosystem. Simultaneously, their newness and foreignness hinder refugees from integrating themselves into the local entrepreneurial ecosystem in the host country. Therefore, refugees often need special support to gain access to local entrepreneurial resources. Recently, several studies have illuminated the function of refugee business incubators in this regard.
2.2 Business Incubators
A business incubator is an organisational form providing start-ups with resources to accelerate development and success (Barbero, Casillas, Wright, & Garcia, 2014; Scillitoe & Chakrabarti, 2010). Today, business incubator centres are widely utilised for supporting entrepreneurship worldwide (Aernoudt, 2004; Ebbers, 2014; Lalkaka, 2002; Tamasy, 2007). In general, researchers see incubators as a tool to speed up growth and financial stability of incubatees and reduce operational uncertainty by providing services and support emphasising integration of expertise, sharing capital, creativity, and competitiveness (Ayatse, Kwahar, & Iyortsuun, 2017).
In research on refugee entrepreneurship, scholars have paid attention to the role of business incubators, which target, specifically, refugees who want to start ventures in the host country. These incubation and acceleration programmes provide refugees with entrepreneurship education (Rashid, 2018) and increase social inclusion (Salamoun & Azad, 2017). These programmes help refugees develop human, social, and financial capital (Isaak, 2020). Furthermore, business incubators provide refugee entrepreneurs with emotional support by alleviating anxiety related to institutional differences, motivating entrepreneurs to maintain their entrepreneurial aspirations, and offering soft support concerning personal matters (Harima et al., 2019). Refugee business incubators may give entrepreneurs better opportunities to engage with their host society by connecting them with the local entrepreneurial ecosystem (Meister & Mauer, 2019).
According to Barbero et al. (2014), there are four archetypes of business incubators with different strategic goals and funding sources: basic research, university, economic development, and private incubator. Recently, scholars have witnessed the reappearance of so-called social incubators, which seek social impact while addressing issues of social and ecological interest (Alvord, Brown, & Letts, 2004; Dacin, Dacin, & Tracey, 2011; Nicolopoulou, Karataş-Özkan, Vas, & Nouman, 2017). These social projects are organised in a hybrid manner through social missions relying on business practices (Battilana & Lee, 2014; Doherty, Haugh, & Lyon, 2014; Rivera-Santos, Holt, Littlewood, & Kolk, 2015). Such an incubator focuses on start-ups that also tackle social problems or target minorities like refugee entrepreneurs (Dacin et al., 2011; Harima & Freudenberg, 2020; Nicolopoulou et al., 2017). Upon their arrival in the host country, refugees are especially exposed to numerous barriers due to institutional differences and associated absence of social, human, and cultural capital in the host country (Obschonka et al., 2018).
Preceding studies have shown the emergence of specific models of incubation programmes. The integration of refugee entrepreneurs into the labour market through entrepreneurship is actively addressed by innovative integration programmes (Collins, 2017). Refugee business incubators play an essential role in supporting refugee entrepreneurs to join local entrepreneurial ecosystems, which provide them with various essential entrepreneurial resources. However, such incubators are assumed to have different relational dynamics within the organisation from conventional business incubators since refugees experience traumatic events and disruption in their life due to forced displacement. However, current research does not provide sufficient evidence to understand this aspect.
3 Methodology
3.1 Research Design
Following Charmaz (2014), we applied a constructive grounded theory approach, where the reality observed is context specific, socially constructed, and exists through perception of individuals (Charmaz, 2006). This approach is particularly suitable as people’s interactions can only be perceived by individuals involved in relational dynamics. Refugee entrepreneurship is a highly heterogeneous phenomenon, and its nature varies depending on context (Heilbrunn, Freiling, & Harima, 2019). Therefore, this study does not seek to generalise research findings by finding universally applicable patterns but to elaborate on the context of the selected case. Due to the limited knowledge about interpersonal relational dynamics that exist between refugee entrepreneurs and business incubators, we chose a qualitative approach to explore empirically how business incubators’ managers and refugee entrepreneurs interact with each other.
3.2 Data Selection and Collection
This study conducted a single case study with the German business incubator called ‘MoveOn’ while gaining additional empirical insights into two other refugee business incubation programmes in Germany to contrast different contexts. The main source for primary data is in-depth interviews with employees or managers of these business incubators and refugee entrepreneurs who participated in these incubation programmes. The interview partners were identified through the personal network of one author, who has engaged in the field of refugee entrepreneurship support in previous years.
The authors conducted seven interviews between November 2019 and January 2020. Interviewees include four managers of refugee business incubators and three refugee entrepreneurs. Additional data collection was carried out through field observation, for instance, by observing the introductory event for an incubation programme at MoveOn in December 2019, where the authors talked to the managers and visitors for brief conversations. Five interviews were conducted in person, while two via Skype/telephone. After conducting the interviews and recording them, the authors transcribed them in the original language (German). Furthermore, this study rests on secondary data, such as websites and social media of these business incubators, to understand their background and programme structures. An overview of the data collection is illustrated in Table 7.1.
List of Empirical Data.
| Primary Data | Interviewee | Gender | Country | Arrival | Mode | Interview Language | Duration (Min.) |
|---|---|---|---|---|---|---|---|
| MoveOn | Manager A | F | Germany | F2F | German | 66 | |
| Manager B | M | Germany | Tel | German | 41 | ||
| Entrepreneur A | M | Syria | 2015 | F2F | German | 42 | |
| Entrepreneur B | M | Syria | 2015 | F2F | German | 39 | |
| Observation | M | Germany | Observation | German | 65 | ||
| ActNow | Manager C | M | Germany | Skype | German | 59 | |
| Entrepreneur C | M | Syria | 2014 | Skype | German | 46 | |
| Kultur vor Ort | Manager D | F | Germany | F2F | German | 40 |
3.3 Data Analysis
Following Gioia, Corley, and Hamilton (2013), the data analysis for this study consisted of three steps. The first step was the initial coding of the interviews with MAXQDA. The authors paraphrased parts of interviews related to relational dynamics within business incubators while trying to keep original phrases and wordings used by respondents by applying line-by-line coding (Charmaz, 2006). In total, we created 419 initial codes throughout the process.
In the second step, the authors compared initial codes to find patterns to develop tentative second-order categories. Multiple authors collaboratively conducted this process. More specifically, we printed out initial codes and cut them into pieces. All five authors sat around a large desk where codes were manually grouped into categories on a flipchart. This process allowed multiple authors to discuss different ways of data interpretation and to consolidate different ways of understanding the observed reality. As a result, we identified 11 second-order themes in total. Finally, we developed aggregate dimensions by grouping second-order themes to relational mechanisms within refugee incubation programmes. The data analysis was a highly iterative process in which we constantly adjusted the data structure several times throughout the process. Fig. 7.1 presents the data structure.
To ensure validity and reliability of this study, the authors made efforts to make the process transparent. This study also triangulated the data (Cresswell & Miller, 2000). Primary data were collected through qualitative interviews and field observation at an event. Interview data were complemented by secondary data. To reduce researchers’ bias, this study also considered investigator triangulation by conducting regular team meetings to discuss data analysis and results. To enhance external validity, this study included detailed descriptions of the setting, the participants, and the concepts (Cresswell & Miler, 2000).
4 Case Description
The ‘MoveOn’ project is an incubation programme in Hamburg, which helps refugees from different countries build up their own business in Germany. They offer traditional formats, such as workshops and seminars, to develop participants’ entrepreneurial knowledge. The core of its pedagogical approach is development of a business plan. Refugee participants acquire basic business skills, such as business idea development, market analysis, marketing, financing, human resource management, and business model development. To participate in this programme, one needs to have a residence permit and language level B1 in German.1 MoveOn was founded in 2015 by the leetHub St.Pauli e.V. The programm lasts six months, and participants need to invest 20 hours a week in their own business. It offers free workspace, equipment, and direct access to entrepreneurial networks of former participants and incubator managers with potential partners, sponsors, and other social entrepreneurs.
The MoveOn programm is mainly executed by two managers. Manager A (cultural manager, mediator, co-founder, and CEO of MoveOn) is also a co-founder of a Germany-wide movement, ‘KulturLeben Hamburg e.V.’, which aims to enable people to participate in cultural and social life. Moreover, she is a cultural manager and has worked for many years in various cultural institutions. Her view of ‘culture’ is rather broad. To her, it is essential to engage with other cultures and learn from each other. Manager B (business economist, co-founder, and CEO of MoveOn) sees himself as a social entrepreneur building bridges between countries. In Africa, he was also involved in development aid, especially establishment of the street paper network for the United Nations. After completing his Master of Business Administration (MBA) in England, he worked together with non-governmental organisations (NGOs) and companies to create various projects. He has also lived in Africa, supporting micro-businesses as a consultant.
This study conducted interviews with two entrepreneurs who participated in the MoveOn programme. Entrepreneur A is a refugee from Aleppo, Syria. He has been living in Hamburg, Germany, since 2015. He studied journalism in Syria and wanted to be self-employed. While he learned German, he participated in the first MoveOn programme and helped implement later programms. He has been developing his social business, which was founded in 2017. His business is developing online media in which refugees share life and experience in Germany. His business aims to reduce prejudice of German locals towards refugees by providing the opportunity where people can learn about and from each other. Entrepreneur B is a refugee from Aleppo, Syria. He has been living in Germany since 2015. At first, he arrived at Sylt, a small island in northern Germany and has moved to Hamburg, where he has been living for a few years. Before he fled to Germany, he studied Business Administration with a specialisation in finance and banking at a university. Later, he became self-employed. In Germany, he first learned German and worked part-time at the company Arko, which produces and sells sweets, coffee, and tea. In 2018, he joined the MoveOn programme because he wanted to become an entrepreneur in Germany and needed support from a business incubator.
In addition to the case of MoveOn, we conducted interviews with Manager C (ActNow), Entrepreneur C (ActNow), and Manager D (Kultur vor Ort e.V.). ActNow is a programm offering entrepreneurial training for migrants and refugees, founded in 2016. Manager C started working for ActNow since 2019. He supports migrants and refugees who want to become entrepreneurs by organising workshops, meetings, consultations, and networking. Entrepreneur C is a refugee from Aleppo, Syria. He has been living in Cologne since 2014. Before he came to Germany, he studied music and law in Syria. Since he is interested in becoming an entrepreneur, he is currently participating in the ActNow programme. Manager C is his coach in this programme. The last respondent is Manager D, who has worked for Kultur vor Ort e.V. for 21 years. This organisation was founded in 1998 in Bremen. It is an association that creates a platform for everyone to interact in the fields of arts and cultures without having boundaries. Apart from developing cultural initiatives, Manager D offers individual consultations for migrants and refugees who want to become self-employed.
5 Results
5.1 ‘Trustful Safeguard’ – Relationship between the Incubator and Entrepreneurs
The first category deals with the relationship between refugee entrepreneurs and managers of refugee business incubators. This study revealed that refugee business incubators act as a ‘trustful safeguard’ towards refugee entrepreneurs. This indicates that the relationship is not only professional and business related but also personal and friendly. Consequently, refugee entrepreneurs received both business and emotional support from the refugee business incubators. Our study also found two factors that influenced the relationship between refugee entrepreneurs and the incubators: (1) friendship, which determined the ‘trustful’ aspect, and (2) colleagues, which defined the ‘safeguard’ aspect in the relationship.
First, the study demonstrated a friendship-like relationship between refugees and incubator, in which trust was built. In the case study, we observed that refugee entrepreneurs often faced challenging situations as they had to start various things from scratch to restore their lives in the host country. Therefore, incubators ‘sometimes work with sensitive topics’ (Manager C), which indicated that participants needed emotional support from the business incubator. Accordingly, conversation topics were often more personal:
Many of those who come as refugees really had a long time where they were not treated on equal terms, and we try to put much value on the fact that we can really bring peace here. Theoretically, you do not have to be their best friends to implement a good program, but it helps in communicating with each other. (Manager C)
The trust of refugees was gained by empathic behaviour of the incubator’s team. By being open and respectful, incubator managers made participants feel ‘accepted’ (Manager A) and showed them ‘we are serious. The participants are also close to our hearts, and we can support them’ (Manager C). Trust was essential for the relationship between incubator managers and their participants:
The topic of trust is very important, and it requires a little bit of empathy from us because, in the end, it is also about people learning that through mutual trust. You can also gain a lot of experience and knowledge from others. (Manager B)
The refugees in this study appreciated the business incubators’ team who helped them with ‘personal issues, not just business’ (Entrepreneur A). The refugee respondents also described the business incubator’s team as friends and observed ‘participants behave differently when the trust is greater’ (Entrepreneur A). Literature offers supportive arguments of what we observed in this case study. Regarding the focus of the business incubator’s team on empathy, several theoretical studies indicated that emotional closeness and reciprocity are essential to developing friendly relationships. Our study illustrated that empathy and emotional support were essential for refugee entrepreneurs to build trust. A study by Tötterman and Sten (2005) suggested trust allowed smooth information exchange between participants and incubators. Moreover, several studies advocated that relationships with a high trust level encouraged people to engage more in social exchange, particularly cooperative interactions (Nahapiet & Ghoshal, 2017; Tötterman, & Sten, 2005).
Second, this study revealed the professional, collegial nature of the relationship between refugee business incubators and refugee entrepreneurs. In the case study, we observed that there was also a business-related aspect. They wanted to be ‘friendly but with a clear boundary’ (Manager B) and ‘professional’ (Manger C). It was still a professional relationship to support the business ideas of the participants:
[…] friendship is a little bit different. You should not call it like that. Somehow, it would not be professional, but it is. We do not want to have any distance, but instead, we want to show that we act on the same level and that we want to work together. We work on people’s dreams, and therefore, I would not call it friendship. But in any case, a closer working relationship at the same eye level. (Manager C)
This quote indicated that the professional relationship did not necessarily mean keeping distance. It meant to keep the priority on the business and entrepreneurial support. The business incubators wanted to ‘really focus on the business with the respective problems’ (Manager B) in favour of the participants:
[When refugee entrepreneurs come up with unfeasible ideas], we would never say: ‘Sorry, we do not believe your idea. It will not be successful’. But rather say: ‘Okay, you have this vision, and you have this idea. It is difficult to realize it without having much capital and much knowledge in the background’. So, all these things play a role. How can we break it down so that they can start with something small? (Manager A)
The refugee business incubators supported the business ideas of the participants at the professional level. They acknowledged the ideas, even if they were not realisable initially. They did not turn them down but supported them and tried to adjust them to the situation at hand. This professionalism of the business incubator’s team enabled refugee entrepreneurs to get the entrepreneurial business support they needed.
Several studies described the relation between incubators and incubatees as a professional business relationship (Hackett & Dilts, 2004; Rice, 2002; Tötterman, & Sten, 2005). The study of Rice (2002) characterised the relationship between business incubators and entrepreneurs as interdependent co-production. Notably, we observed that a professional relationship did not mean distance but instead referred to business focus while understanding refugee individuals at a personal level.
RP-1: Refugee business incubators act as ‘trustful safeguards’ for refugee entrepreneurs by building a friendship-like relationship to build trust, which allows refugee participants to be open-minded, courageous, and independent on top of a colleague-like relationship that enables them to offer entrepreneurial business support at the professional level.
5.2 ‘Buddies’ – Relationship Between Refugee Entrepreneurs
The second category discusses the relationship between refugee entrepreneurs participating in business incubation programmes. This study observed that refugee entrepreneurs behaved like ‘buddies’ to each other. By sharing similar circumstances, they developed a comfortable and supportive relationship. This study identified two factors influencing the relationship among refugee entrepreneurs: (1) pain sharing and (2) continuous validation.
First, the study demonstrated the emotional connections between refugee entrepreneurs in which they shared their pains. We observed that programme participants were mostly glad when a major part of the other participants also had a refugee background. It made them feel understood by other participants and gave them a feeling of comfort and security:
Everyone is a refugee, which was very helpful. When participants had been for 30 to 40 years here in Germany, then it would have been a bit different for me because I want people here who have the same situation. We all came from different backgrounds, but now we speak one same language in the program. It makes me feel comfortable. (Entrepreneur B)
Refugee entrepreneurs realised ‘these are all like-minded people, they all have similar difficulties’ (Manager A), and they felt like part of the group. These circumstances allowed them to have ‘more trust’ (Researcher A) towards other participants than German locals or migrants who have lived in the host country for a long time. Miller (2004) explained that refugees tended to interact more openly with other refugees because they shared similar challenges. Likewise, Fong, Busch, Armour, Heffron, and Chanmugam (2007) also observed that refugees were willing to help each other and showed mutual commitment and kindness.
Second, the study revealed that the relationship between refugee participants also had a business-like nature. Entrepreneurs appreciated the feedback given by other refugee participants, and it had a crucial impact on the validation of their business ideas. Participants were interested in the opinion of other participants about their business ideas: ‘[It is] very important when you hear feedback and solutions from others. It is easier to give each other advice. Everyone has a different point of view’ (Entrepreneur A).
Additionally, observed entrepreneurs were willing to help each other if they did not understand specific topics taught in the incubation programme. This was ‘convenient’ (Entrepreneur B) for them because they could turn to a like-minded person who understood their challenges from a similar perspective. Furthermore, we observed that refugee entrepreneurs often talked actively about their business ideas and shared progress with each other. By doing so, they could compare themselves with others and validate their milestones:
So that you compare your situation, you look at other participants. Where are they now? What did they do? Someone has already written the business plan. Then you can just ask him or her how long it took and whether he or she wrote it alone or with someone else. One can also ask others: ‘Have you started your business already, or is it still in your head and so on?’ Or: ‘What is your problem right now?’ (Entrepreneur B)
McAdam and Marlow (2007) revealed that during a business incubation programm, entrepreneurs were close to each other, resulting in participants discussing experiences, as well as challenges they faced. Similarly, Redondo-Carretero and Camarero-Izquierdo (2017) observed that entrepreneurs at a business incubator had greater attentiveness to detail when working and provided a factor of convenience. In the observed case, refugee entrepreneurs shared not only business-related challenges but also obstacles in daily life. Therefore, they could holistically understand problems of other refugee entrepreneurs and provide highly personalised and detailed advice:
RP-2: Refugees incubatees support each other at the personal and business levels by sharing similar situations as refugees and entrepreneurs and acting as ‘buddies’ by mutually providing feedback and validating entrepreneurial milestones.
5.3 ‘Mission Partners’ – Members of Refugee Business Incubators
The third category deals with relationships among team members (managers, trainers, mentors, and volunteers) of refugee business incubators. Team members interacted as ‘mission partners’, because they have mission-driven interactions within the team. When counselling refugee entrepreneurs, team members reflected on the situation of each incubatee and shared their individual learnings. They followed the shared goal to integrate refugee entrepreneurs into society by supporting them in realising their dreams and business ideas. This study revealed how sharing a common mission influenced the team’s relationship within the incubator. They wanted to reach the same goals and faced similar challenges:
If we are no longer moving in the same direction, this will definitely affect the participants and the team members. I believe that by simply trying to develop an open team culture, we can achieve our common goal. (Manager A)
It is essential that the team cooperates and helps each other in conflict situations to achieve our mutual goals. (Manager D)
The main aim of the business incubator was to integrate refugee entrepreneurs, confronted with a new environment, into the host society. Therefore, Manager A clarified:
Of course, it is in our roots. We only reached this position because refugees know that we have a strong influence on their living situation. We are aware of this because we simply believe that this is the next step of integration. Our motto is, after all, ‘integration through business creation’. (Manager A)
The positive relational dynamics among incubator’s employees are comparable to the one in social enterprise. The literature emphasises the vital role of mission in the context of social entrepreneurship that strengthens collaborative relationships not only within the organisation but also with stakeholders (de Bruin, Shaw, & Lewis, 2017; Stevens, Moray, & Bruneel, 2015). This study demonstrated that a common mission united members of refugee business incubators, and these collaborative dynamics within team members are essential for the incubator to facilitate favourable interactions with incubatees. Therefore, we develop the following research proposition:
RP-3: The members of the refugee entrepreneurial support organizations team act as ‘mission partners’, due to their mission-driven interactions, and follow their mutual goal to integrate refugee entrepreneurs into society.
5.4 Constructive Mechanisms
The fourth category deals with the overall dynamics between different types of interactions discussed above. This study observed constructive mechanisms, which enabled the business incubator to function as a bridge for refugee entrepreneurs to the local entrepreneurial ecosystem. The empirical observation demonstrated that some factors lubricated relational dynamics within refugee business incubators, creating a virtuous cycle by promoting trust, teamwork, and networking. Refugee business incubators have a hybrid nature of conventional business incubators and social enterprise while having unique relationships with incubatees. Their relationship was characterised by closeness and intensive interactions, essential to building trust with refugees, who needed to overcome numerous institutional differences. Therefore, the overall atmosphere within business incubators needed to be more personal than professional: ‘In the end, there is always a positive atmosphere in the program because we do activities like cooking or other things together’ (Manager B); ‘friendship really develops’ (Manager C). Trust was essential for friendship, as Manager B emphasised: ‘They generally build up an extreme relationship of trust over time and that very intensively’ (Manager B).
One of the participants told me, ‘I can ask any question here, no matter how stupid it is, and even if the program has been over for half a year. It helps me enormously to have a place to go where I can ask anything’. (Manager A)
Trustful relationships between team members of the business incubators and refugee entrepreneurs made them feel comfortable in their environment. This resulted in building confidence in team member’s and refugee entrepreneurs’ reliability and integrity, which led to building shared expectations about behaviours and outcomes. Even after the incubation programmes, contacts to each other were maintained. The incubator tried to keep in touch with previous participants, for instance, by organising regular network meetings. ‘Network meetings were organized by us, but also in the qualifying rounds. As a result, many business relationships have been established’ (Manager D).
This observation provided the study with two significant hints on how a virtuous cycle regarding relational dynamics was created over time in the context of refugee business incubators. First, business incubators need to develop organisational culture in which incubator managers and incubatees understand each other beyond the professional level. Several entrepreneurs in this study shared challenges and successes not only in their professional life but also their private life with the business incubator as well. Incubator managers were required to show empathy towards refugees’ entire life circumstances, listen to them carefully, and develop a favourable atmosphere to build trust among stakeholders. Second, to connect refugee entrepreneurs to the local entrepreneurial ecosystem, refugee business incubators need to develop a long-term relationship with entrepreneurs even after the programme. Programmes themselves are undoubtedly helpful for participants to build a business idea and make the first step to integrating themselves into the local ecosystem. They also need, however, different types of business partners as they develop their business further. Furthermore, programme alumni can help the incubator make a better bridge between current participants and the ecosystem. Thus, we develop the following research proposition:
RP-4: By building a trustful atmosphere with participants and developing a long-term relationship with alumni, refugee business incubators can create a virtuous cycle to sustainably support refugee entrepreneurs in integrating into the local entrepreneurial ecosystem.
5.5 Disruptive Mechanisms
The fifth category deals with the disruptive mechanisms occurring in the context of refugee business incubators. This study found several possible disruptive mechanisms within business incubators programmes, which functioned as a vicious circle influencing relationships between all people involved. The study identified three primary disruptive mechanisms: (1) uncertainty, (2) cultural clash, and (3) expectation gaps between refugee entrepreneurs and business incubators.
First, the study demonstrated how subjectively perceived uncertainty of individual entrepreneurs led to hesitation and distrust towards other participants or team members. Refugee entrepreneurs were often uncertain about how to interpret intentions and reactions of other people. The feeling of uncertainty and distrust transferred to other members of the group. As a result, negative dynamics within the group of participants developed and positive relational dynamics got disrupted. We observed that the level of uncertainty depended on ‘personality’ (Manager C), ‘feeling’ (Entrepreneur B), and, in some cases, ‘culture’ (Entrepreneur A). Moreover, refugee entrepreneurs also were uncertain about the business incubators’ team, especially in the initial phase. They did not know what to expect from the business incubators and how they were going to interact with them. Furthermore, they were unsure about what the business incubators expected from them:
At first, I did not say anything in the interview. That was the first time when the whole team was here. I wanted to see how this place looked like first. What is the incubation program about? And then, they asked me, ‘What is your business idea?’ I said: ‘I am here to listen to you’. And I did not say anything, and then I just wanted to be silent somehow. (Entrepreneur B)
The quote underlined that some refugee entrepreneurs did not share their business ideas with the business incubators. It caused challenging situations since their business ideas were crucial information for the business incubators to facilitate effective support structures and to make the whole programme successful:
[We were] disappointed, despite all our efforts for individual participants, when participants unreliably do not show up or suddenly stay away or something. In such cases, there is a disappointment. (Manager A)
McAdam and Marlow (2007) supported uncertainty and secrecy as disruptive mechanisms in a business incubators programme as they lead to distrust. They observed that entrepreneurs hesitated to disclose specific information about their businesses. Such entrepreneurs perceive that other participants may take advantage of the shared information and use it to become competitors later (Redondo-Carretero & Camarero-Izquierdo, 2017). Since refugees are new to the environment and have limited knowledge about the host country’s institutions, they may have more substantial uncertainty when they contact the incubator.
Second, this study revealed that different cultural backgrounds of the people involved in the refugee business incubators programme could lead to barriers and misunderstandings: ‘We [=German people] are people who write a lot. People from Arabic countries do much verbal work, meaning all this writing we do is sometimes very exhausting for them’ (Manager B). Furthermore, the language was a barrier for the successful facilitation of interactions among participants:
Some of them just could not speak German very well; they did not understand anything. They just sat there and listened, and a little bit like this. It was a little bit boring with them because they did not understand everything so well. (Entrepreneur B)
Alrawadieh et al. (2019) identified four main challenges that refugee entrepreneurs faced in the host country: legislative and administrative, market-related issues, financial, and socio-cultural. Most of these challenges are related to the cultural background of refugee entrepreneurs. Similarly, Fong et al. (2007) revealed that the barrier for refugee entrepreneurs was the lack of familiarity with the host country’s system because processes were different in every county. Differences in business culture are a significant challenge. In contrast, our study showed that cultural barriers existed for business incubators as well. Different systems, processes, and behaviours were exhausting for the refugee entrepreneurs and business incubators’ team.
Third, this study revealed that gaps regarding the expectation of the business incubators and the refugee entrepreneurs could disrupt their relationship. Some refugee entrepreneurs, who wanted to participate in the incubation programme, had unrealistically high expectations concerning the progress of their business development. They wanted to start their business and earn much money within a short time.
The expectations are actually … that many people think they can start a business quickly and then make money, and we are just trying to do this more carefully, sustainably, and logically. (Manager B)
Business incubators tried to explain the difficulties for refugees to start a business in Germany. Some of the participants understood why starting a business in Germany would be more difficult than in their home countries. However, others did not and became ‘very loud and demanding’ (Manager C). Furthermore, there was a common misconception of the tax system in Germany. Many refugee entrepreneurs were scared of the topic of taxes and therefore thought the business incubators would be ‘the panacea that solves all tax problems’ (Manager B). When refugees’ expectations are too different from the mission of the business incubators, collaborative, relational dynamics cannot be created. Similarly, business incubators also had expectations towards participants. The relation between them could only form if these mutual expectations are met:
What I expect and what I am also addressing in the preliminary selection interviews is first and foremost an openness towards other cultures, so to speak, because we are a motley crew here. Not everyone speaks Arabic with each other; there are also Afghans who have no idea what others are talking in Arabic. That is why I expect openness from our participants. So, I am a bit concerned about sensing whether they really bring this openness with them. (Manager A)
The incubators have the privilege of selecting participants who have high potential in different areas fitting to the incubator’s objectives (McAdam & Marlow, 2007). In contrast, our study showed selection criteria of business incubators for refugees were more of a social nature. Business incubators selected refugee entrepreneurs who fitted into the group and were willing to get involved in the process. Hudson (2016) observed that sharing of expectations was essential to form relationships between mentors and mentees. Expectations have to be a two-way articulation because mentees need to express their expectations as well. Therefore, expectations have a direct impact on relational progress (Hudson, 2016). Based on the discussions above, this study proposes the following proposition.
RP-5: Disruptive mechanisms, including uncertainty, cultural clashes, and expectation gaps, create a vicious cycle that can lead to distrust and misunderstandings in relational dynamics within the refugee business incubators, which hinder them from supporting refugees to integrate themselves into the local ecosystem.
6 Discussion
Based on the findings above, we developed a framework of relational dynamics within the refugee business incubators (Fig. 7.2).
The results demonstrated that, unlike conventional ones, refugee business incubators were characterised by unique relational dynamics between business incubator and incubatees, among programme participants, and members of the incubator. All the relationships need to function well so that refugee business incubators can successfully help integrating newly arrived entrepreneurs into the local ecosystem.
This study identified three different types of interpersonal relationships. We propose that refugee business incubators act as ‘trustful safeguards’ for refugee entrepreneurs by building a friendship-like relationship to build trust (RP-1). This allows refugee entrepreneurs to be open-minded, courageous, and independent on top of a colleague-like relationship. The combination of these informal and formal natures is unique in contrast to conventional business incubators, whose social capital consists of intensive business-related networks (Honig & Karlsson, 2007). As the second type of relationship, this study suggests refugee entrepreneurs support each other at personal and business levels by sharing the same situations and acting as ‘buddies’, validating their business and milestones through mutual feedback (RP-2). The final type of relationship is between members of the business incubator who act as ‘mission partners’ (RP-3). Due to their mission-driven interactions, they follow their mutual goal to integrate refugee entrepreneurs into society by starting their own business. During this process, they reflect on their situation and help each other, which promotes team collaborative dynamics.
Furthermore, we propose that constructive mechanisms in business incubators programmes, including business support and learning from each other’s know-how and experience, are a virtuous cycle that promotes trust, teamwork, and networking (RP-4). Constructive mechanisms have a positive impact on evolution of business relationships. Finally, we discuss that disruptive mechanisms, including uncertainty, cultural clashes, and expectation gaps, build a vicious cycle that leads to distrust and misunderstandings in all relationships of business incubators programmes (RP-5).
Findings contribute to research on refugee entrepreneurship. Recently, scholars have started illuminating the role of refugee business incubators (Harima et al., 2019; Meister & Mauer, 2019). These studies have predominantly investigated their functions in developing entrepreneurial capacities of refugees who want to start businesses. Literature has revealed that internal dynamics within the business incubators have significant influences on performance of business incubators (Rothschild & Darr, 2005). Scholars have named different aspects, such as entrepreneurial cooperation and conflict between incubatees (McAdam & Marlow, 2007), the alignment of managerial incentives (Alsos, Hytti, & Ljunggren, 2011), networking capabilities of the business incubator (Lin, Wood, & Lu, 2012), and networking behaviours among incubatees (Ebbers, 2014). Since refugee business incubators pursue social goals to facilitate socio-economic integration of refugees into the host country and bridge them to the local entrepreneurial ecosystem, they have different internal dynamics from conventional business incubators. However, we still knew little about internal dynamics within such business incubators. By investigating relational dynamics within refugee business incubators, this study identified the unique relationships between different actors in refugee business incubation programmes.
7 Conclusions
7.1 Practical Implications
This study offers practical implications for refugee business incubators and policymakers in refugee-receiving countries. Our study shows refugee business incubators can make significant contributions to the integration of refugee entrepreneurs to the host-country entrepreneurial ecosystem. However, it also demonstrates that successful operation of such organisations requires a high degree of cultural sensitivity and special care of interpersonal dynamics. Starting a business is particularly challenging for refugees, as they need to operate in an almost entirely foreign environment. Therefore, they need trustful relationships with the incubator and other entrepreneurs who share similar circumstances. Furthermore, the relationship within the refugee business incubator is decisive as it needs to be driven by a common social mission to realise the socio-economic integration of refugees.
The findings are also helpful for policymakers in the host country who need to develop political measures to support refugees’ entrepreneurial activities. Offering financial aid is one option that can help refugees with business ideas. Nevertheless, they need to understand the role of refugee business incubators to fill the gap between refugees with high entrepreneurial potential and local entrepreneurial ecosystems. As long as refugees are not well integrated into the ecosystem, their businesses are unlikely to be sustainable.
7.2 Limitations
This study has several methodological limitations. First, we conducted interviews with refugee entrepreneurs introduced to us by incubators. As a result, interviewed entrepreneurs tend to be satisfied, with a good relationship with the incubator. Therefore, we could not fully investigate potential negative sides of the relationship between incubators and entrepreneurs. Second, entrepreneurs in our sample are male refugees from Syria, which hindered this study from considering factors specific to gender and ethnic background of respondents. It might be possible that results would have been different if we had conducted interviews with refugee entrepreneurs from another country and with a different gender. Third, interviews for this study took place in a limited time. Therefore, analysis lacked longitudinal aspects, which would have allowed this study to capture development of relational dynamics in the context of refugee business incubators over time. Finally, this study was conducted only in Germany. Therefore, findings are specific to the German context and institutional environments.
7.3 Research Outlook
Based on the contributions and limitations of this study, we have several suggestions for future research. First, we recommend future researchers focus more on negative experiences of refugee entrepreneurs with business incubators. Furthermore, refugee entrepreneurs from other countries than Syria and female refugee entrepreneurs should be included in future studies. Refugee entrepreneurship is a highly heterogeneous phenomenon, and its nature varies to a large extent depending on the backgrounds of entrepreneurs (Heilbrunn et al., 2019). Recent studies have highlighted the distinctive characteristics of female refugee entrepreneurship, which offer valuable empirical and theoretical insights in this regard (Ayadurai, 2011; Senthanar, MacEachen, Premji, & Bigelow, 2021). An investigation in different national and cultural contexts is effective in understanding how culture, language, and institutional factors influence the relational dynamics within business incubators. Since this study had limited consideration of the dynamic evolution of relational dynamics, we suggest future research considers an option to conduct a longitudinal analysis of a single or limited number of cases. Finally, we developed a set of research propositions. We recommend future researchers apply these propositions to other research contexts to validate or further develop them.
Note
B1 refers to the third level of German in the Common European Framework of Reference (CEFR).
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Acknowledgement
Tenzin Yeshi would like to express his gratitude for his doctorate financial support from the Friedrich-Naumann-Stiftung für die Freiheit.
- Prelims
- Chapter 1: Disadvantaged Entrepreneurship and the Entrepreneurial Ecosystem: A Critical Literature Review and Introduction
- Theme 1: Background and Theory
- Chapter 2: The (Mixed) Motivations of Those Engaged in Enterprise and Experiencing Poverty
- Chapter 3: The Influence of Human Capital in Entrepreneurial Intention in Deprived Areas: A Theoretical Framework
- Theme 2: Contexts
- Chapter 4: A Gendered Perspective Applied to Latin American Entrepreneurial Ecosystems
- Chapter 5: Migrant Women Entrepreneurship and The Entrepreneurial Ecosystem
- Chapter 6: How do Refugee Entrepreneurs Navigate Institutional Voids? Insights from Malaysia
- Theme 3: Ecosystem Substitutes and Compliments
- Chapter 7: Relational Dynamics within Refugee Business Incubators: Bridging Refugee Entrepreneurs to the Host-Country Entrepreneurial Ecosystem
- Chapter 8: Disadvantaged Entrepreneurship Development: The Role of Civil Society Organisations in the Sierra Leone Petty Trading Entrepreneurial Ecosystem
- Chapter 9: The Ecosystem of UK Social Entrepreneurship: A Meta-Analysis of Contemporary Studies
- Chapter 10: Disadvantaged Entrepreneurship and the Entrepreneurial Ecosystem: Conclusions and Areas for Future Research
- Index