Enabling diaspora to take the lead – a synthesis

To generate an in-depth understanding of how diaspora professionals and entrepreneurs in The Netherlands can (and already do) contribute to the sustainable development of their home country, The Broker and IOM The Netherlands joined forces to reopen the online knowledge on Diaspora Inclusion in late 2020. By speaking to senior IOM officials and various diaspora entrepreneurs and experts, as well featuring an extra article from an academic perspective, the second part of the knowledge dossier provided an overview of relevant challenges and opportunities related to diaspora inclusion in the entrepreneurial sphere. Overall, the featured articles suggest that various diaspora communities living in the Netherlands have a great potential to contribute to the sustainable development of their country of origin. This depends, however, on the ability of the diaspora to overcome specific challenges that they face and on the creation of an enabling environment to stimulate and tap into their potential. This synthesis brings together the insights of the last five articles in this dossier, highlighting their most important and interesting elements, with a focus on challenges, opportunities and the enabling environment. In the end it is our hope that, combined with the insights of the earlier contributions to this dossier, all agents – diaspora, development actors, policy makers and private sector actors alike – find inspiration and motivation on how to move forward in working together towards more efficient, sustainable and inclusive development efforts and entrepreneurship.

Invaluable forces: diaspora employees, experts and entrepreneurs

“There is a vast amount of creativity and innovation within the African diaspora.” This view, expressed by Deputy Managing Director of the Netherlands-African Business Council (NABC) Marina Diboma, was shared by many of the contributors to this dossier. In addition to their talents, members of the diaspora are regarded as particularly driven and ambitious. “That fire is kept blazing by the fact that every member of the African diaspora with family in their home country is aware of the challenges [they face] and feels responsible to contribute to the betterment of their lives.”  The awareness of the challenges people in their country of origin are facing, the intrinsic motivation to give something back, and the talent they possess make members of the diaspora powerful actors for change. They are in the unique position to contribute to development efforts in their countries of origin, as employees within international companies, as entrepreneurs, or as experts transferring their knowledge to their peers abroad. 

Diaspora professionals working as employees in international companies operating in their country of origin bring along their unique ‘double perspective’. Based on her experience working as a consultant in Ethiopia, Saskia Kloezeman refers to this as the diaspora’s ‘international mind and local heart.’ With their knowledge of and sensitivity to the culture of both the Netherlands and their countries of origin, diaspora professionals can fill the gap between international companies and local businesses. Diaspora professionals are able to play a unique bridging role, helping international companies take better account of the local context and, consequently, generate more impact with their investments. Marina Diboma confirms this idea of the diaspora employee as ‘bridge’, arguing that the African diaspora in The Netherlands can play a valuable position for Dutch companies who want to set up daughter organisations in countries in Africa. 

In addition to their valuable role as employees in international companies, entrepreneurship is also described in various articles as an effective means for diaspora to contribute to the sustainable development of their country of origin. Fridah Ntarangwi, when talking about the need for a rethinking of aid and the role of diaspora entrepreneurs, voiced the opinion that entrepreneurship is an effective means to foster development and accumulation of generational wealth in Africa. As she explains: “African governments keep borrowing because they do not have generational wealth that can be duplicated, multiplied or employed to create businesses and foster sustainable development.” Fridah believes that setting up businesses and making sound investments in African economies is the way forward for sustainable growth. And diaspora entrepreneurs are uniquely suited to do so, she argues. 

As the articles on the Connecting Diaspora for Development (CD4D) programme and its UNU-MERIT evaluation showed, diaspora professionals can be of great added value to the development of their countries of origin by transferring their knowledge and expertise. Not only by actually starting up a business or working in a company, but by sharing what – and, in some cases, who – they know, diaspora professionals can make an enormous difference for the functioning of institutions in their countries of origin. Facilitating such knowledge transfers, as IOM The Netherlands does, is an effective way to allow for members of the African diaspora living in the Netherlands to employ their unique position and knowledge to become development agents in their own right. 

In order to effectively use their bridge building position for the sustainable development of their countries of origins, diaspora professionals and entrepreneurs need to meet certain preconditions. In the first place, they must be aware of their unique position; recognising that what sets them apart from people from the Netherlands as well as from people from their home countries is their strength and by no means a weakness. Further, as Saskia Kloezeman emphasized, for those diaspora professionals who want to set up their own enterprises in their countries of origin, it is important to have an entrepreneurial mindset and the flexibility needed to adjust to the challenges of the local context. For diaspora working in international organisations or as independent entrepreneurs in their country of origin, Marina Diboma also highlighted the importance of understanding both business cultures. This also includes mastering both the Dutch language and the language of the country of origin as well as having a longer-term perspective of working in the African context; not only being interested in a cultural exchange. As further discussed in the following section, other factors affect the success of diaspora professionals, some of them (partially) outside their own control. Considering that being part of a diaspora community presents unique opportunities but also unique challenges, diaspora professionals should also be resilient and tenacious, while managing their expectations when operating in their country of origin. 

Overcoming challenges

In order to effectively contribute to the sustainable development of their country of origin, diaspora entrepreneurs (and professionals) need to overcome specific challenges that are related to their position as bridge builders between two worlds. Challenges are varied and will depend, among others, on the business sector, country of origin and background of the diaspora professional. They include a lack of social and financial capital, misconceptions or unrealistic expectations about diaspora, and a challenging (business) environment. This section looks at these three categories of challenges, including the obstacles that have arisen due to the COVID-19 pandemic (box 1). Even though these obstacles are specific to the current time, they provide relevant lessons for diaspora inclusion and point to surprising new opportunities.

Social and financial capital

Diaspora entrepreneurs are confronted with their limited social and financial capital in their efforts to engage in business activities in their country of origin. Compared to their Dutch peers, diaspora entrepreneurs usually do not have the necessary networks within the Dutch entrepreneurial ecosystem, lacking, for example, recognisable role models or much-needed mentorship and coaching. This limited social capital is usually related to (and often results in) limited financial capital within the various African diaspora communities in The Netherlands. As Marina Diboma explained, when diaspora entrepreneurs start a crowdfunding campaign for their start-up, they generate limited financial contribution due to their lack of a wealthy network in the Netherlands. That is not the case for their native Dutch counterparts. 

Based on the insight that diaspora communities have limited social and financial capital, various articles highlighted the importance of specific entrepreneurship programmes that target the diaspora community. IOM The Netherlands initiated Entrepreneurship by Diaspora for Development (ED4D), a training programme that aims  to reinforce the capacities of Ghanaian and Ethiopian diaspora entrepreneurs in the Netherlands to set-up businesses in their countries of origin and enable a trusting environment for their investment. The ED4D programme is based on the belief that, despite having some advantages, diaspora entrepreneurs still face significant obstacles in their efforts to start a business in their country of origin. The same conviction inspired Fridah Ntangwi to set up Zidicircle, a social enterprise that aims to support diaspora entrepreneurs by providing them with the resources necessary to successfully launch their business; either in their country of residence, country of origin, or internationally. 

 

Image, misconceptions and expectations

Despite positive outcomes and success stories related to the role of diaspora professionals and entrepreneurs as development agents for their country of origin, the featured articles also highlight the importance of recognising the mismatch that exists between ideas about the diaspora and the reality they live in. Members of the African diaspora themselves, moreover, are not free from misconceptions either, especially with regards to their country of origin. From the contributions to this dossier, three misconceptions stand out as particularly persistent and negatively affecting diaspora’s ability to effectively conduct business activities in their country of origin:

In the first place, there is a prejudice and misconception among investors about risks related to investing in African diaspora.  In her contribution, Fridah Ntarangwi explains that diaspora professionals are often neglected by investors because they tend to be judged on the basis of their background and associated perceived risks and not necessarily on their business ideas. While there is a growing conversation about diversity and inclusion within the investment community, Fridah argues that there are still large steps to be made to overcome prejudice about Africans diaspora and migrants. Only when investors can look beyond their background – or even begin to see it as an asset – will there be ground for an inclusive entrepreneurial ecosystem where the potential of diaspora entrepreneurs can be fully recognised and harnessed.

In the second place, overestimation of the diaspora’s resources – by both governments and local communities in the country of origin – pose serious challenges for diaspora professionals and entrepreneurs. Both Saskia Kloezeman and Fridah Ntarangwi explain that the financial capacity of the diaspora tends to be gravely overestimated. International organisations, governments and families assume that the diaspora have sufficient capital to invest in their entrepreneurial endeavours in their country of origin. In reality, however, diaspora professionals usually have normal jobs and matching, average, income in their host countries. The price of this misconception is two-fold. In the first place, the diaspora tend to be overlooked in targeted programming to support (prospective) entrepreneurs and their business activities. Second, members of the diaspora often go to great lengths to match the image their families and communities in the country of origin have about them. In some cases, Kloezeman explains, members of the diaspora have even taken out loans in their host countries to be able to afford expensive gifts for their family members, just to keep the ‘fairy tale’ alive. The featured articles suggest that overcoming this misconception and managing expectations about the potential of the diaspora is a determinant factor for the success of diaspora engagement. This means that for the diaspora professionals it is of great importance that they are transparent about their financial capacity and the challenges they face particular to their position.  

Finally, a mismatch can be observed between expectations that the diaspora have about their country of origin and the reality they meet once they move to set up a business or engage in employment there. Despite the fact that diaspora professionals and entrepreneurs have a closer connection to their country of origin than their Dutch counterparts, the articles in the knowledge dossier suggest that the diaspora still tend to hold misconceptions about what they will encounter. Diaspora entrepreneurs and professionals often expect from local communities and institutions in their country of origin to meet certain standards – standards that are informed by (business) frameworks adopted in the Netherlands. When local partners, institutions and family members cannot meet these expectations, frustration and clashes often arise. In most extreme cases, Saskia Kloezeman has observed, diaspora entrepreneurs have been disappointed to the point that they decided to return to their host country and never engage themselves in business activities in their country of origin again. To manage expectations and prevent such disappointments, preparation is therefore key. Responsibility for this preparation lies with the diaspora entrepreneur, but government and NGOs can play an important role too. As the examples of ED4D, CD4D and Zidicircle show, successful programmes to support diaspora professionals and entrepreneurs in their attempt to contribute to the sustainable development of their country of origin, include rigorous preparation – not only in terms of formulating sound business plans, but also in terms of managing ’cultural’ expectations and being realistic about opportunities and challenges ahead. 

Enabling environment 

To overcome the above-mentioned challenges, the featured articles in the knowledge dossier also provided certain tools that various actors can implement in order to create an environment that enables diaspora professionals and entrepreneurs to operate as development actors. Existing initiatives such as the Entrepreneurship by Diaspora for Development (ED4D) programme for example, show that targeted initiatives go a long way to contribute to creating this enabling environment. This explains why IOM The Netherlands, Zidicircle and other consulted participants in this dossier are unanimously in favour of more of such programmes. It also explains why there is wide agreement about the need for the Dutch government and other actors not to neglect diaspora entrepreneurs and, by extension, include them as a specific target group in policy making. Adjusting policy to the background of the entrepreneurs, their specific needs and talents is the way to best make use of and stimulate their potential. In other words, the government could play an important facilitating role by formulating a policy framework specifically targeting diaspora as a separate group. There is, as Marina Diboma emphasized, “serious need for instruments that allow the upcoming generation of diaspora entrepreneurs to do business in their home country.” In practical terms, such support could be translated into a special diaspora investment fund by the government. Existing funds in other countries that support entrepreneurs from marginalised communities can be a source of inspiration. 

At the same time, all featured articles articulate the importance of looking beyond the government in an attempt to create an environment that enables the diaspora to contribute to the sustainable development of their country of origin. The private sector, multilateral organisations and individual diaspora initiatives can all make a difference. Various articles suggest that the private sector should make more effort to tap into the pool of diaspora professionals. Active diaspora recruitment and strategic policies that encourage diversity are stimulated, especially when it comes to making management and executive positions more inclusive to the African diaspora. Similarly, the Dutch private sector is encouraged to build partnerships with diaspora entrepreneurs, by either developing new products together or by setting up daughter organisations in various African countries. Multilateral organisations and NGOs, in turn, can also contribute to the creation of an enabling environment for diaspora engagement. As is the case for IOM The Netherlands, intergovernmental organisations have a strong network and a reputation that can be used to open doors for diaspora entrepreneurs and to facilitate knowledge exchange between diaspora and their country of origin. 

Last but not least, members of the diaspora themselves have an active role to play. In fact, they should eventually take the lead. This means that, even when the public sector seems reluctant to actively support them, members of the diaspora have to come up with innovative ideas and look for alternative resources and investment opportunities. This is a challenging path that demands perseverance, innovativeness and talent. Yet, to conclude with the words of Marina Diboma, the success of the diaspora is on its way. “I am sure [they] will take the lead and succeed to provide alternative solutions…It is only a matter of time.”

 

It is important to mention that, with a few exceptions, the generated insights in our online knowledge dossier on diaspora Inclusion focused on the African diaspora in The Netherlands. More than 22 percent of the residents in The Netherlands come from over 220 foreign countries. This means the presented contributions can be further complemented with new insights that focus on other diaspora communities (including: The Turkish, South East Asian, Moroccan, Surinamese and Caribbean, to name just a few).