New Research Brief: The Positive Economic Contributions of Refugees in Türkiye
New Research Brief: The Positive Economic Contributions of Refugees in Türkiye
August 8, 2022 | Building Markets
Since 2016, Building Markets has been conducting novel research to bring visibility and opportunity to refugee-owned small businesses and understand their contributions to the Turkish economy.
Building Markets’ research shows that refugee-owned small businesses create jobs, livelihoods, and independence not only for themselves, but for their Turkish neighbors as well. We have published more than a dozen reports on our findings, and have synthesized our data into a new brief for public, private, and development partners that will be presented in Gaziantep, Ankara, and Istanbul in August 2022.
Türkiye has four million refugees and asylum seekers, of whom 3.6M (90%) are Syrian. Over the last decade, Syrians have become more integrated into economic life as consumers, job seekers, employees, and entrepreneurs. By 2020, it is estimated that Syrians had invested more than US $500M in capital into the country through the establishment of commercial activities. As Building Markets’ research has found, Syrians have brought their entrepreneurial skills and capital to Türkiye, starting the vast majority of the 2,776 SMEs in our network.
Through our research we have found that:
On average, Syrian SMEs have been operating in Türkiye for 5 years. The majority of businesses operate in the Wholesale/Retail (34.2%), Manufacturing (26%), and Accommodation and Food Service (8.9%) sectors.
These businesses employ 7 full-time employees on average.
Among Syrian SMEs, 8.4% have at least one woman owner or manager.
Syrian SMEs have advantages (e.g., multiple languages, international networks, export capacity) and are also faced with unique disadvantages (e.g., lack of local market experience, unfamiliarity with regulations, and low technology use) that affect their competitiveness in the Turkish market and attractiveness as partners to Turkish companies. Syrian-owned companies also faced additional challenges during the COVID-19 pandemic, given that their competitive disadvantages were amplified. This included a lack of available capital, information gaps, and language barriers that limited access to support programs, trade and supply chain disruptions, and lack of digital capacity in their operational models.
At a time when Türkiye is facing significant economic difficulties, addressing challenges faced by these entrepreneurs and businesses can boost job creation. Building Markets recommends the following actions by public, private, and development partners to support further integration of refugee businesses into the Turkish commercial ecosystem and society, enhancing their economic contributions:
IDENTIFY AND ADDRESS GAPS IN THE POLICY & REGULATORY ENVIRONMENT
The public sector should:
Focus on improving the enabling environment for all businesses to contribute to Türkiye’s economy.
Help ensure that all entrepreneurs in Türkiye can access support to start and operate a business and understand applicable regulations.
Ease regulatory burdens and reduce uncertainties for refugee SMEs to encourage formalization, boost exports and job creation, and enable refugee entrepreneurs to deploy and retain their capital in Türkiye.
MARKET ACCESS AND INTEGRATION
Civil society organizations and business associations should:
Promote the integration of refugee businesses in the Turkish economy by providing training and mentorship aligned with refugee SME growth constraints offered in Arabic and Turkish.
Make resources available to support the digital capacity of SME operating models.
Communicate refugee SMEs’ contributions to the economy to counterbalance anti-refugee sentiment.
The private sector should:
Benefit from new partnerships with refugee SMEs by engaging in networking opportunities between buyers and SME suppliers.
Include refugee SMEs in supplier diversity strategies.
ACCESS TO CAPITAL
Private and public sector stakeholders should:
Increase access to financing opportunities to support business growth.
Encourage and incentivize banks and financiers to work with refugee SMEs.
Financiers should:
Diversity their investment portfolio by working with refugee SMEs, giving them access to a group of businesses with a higher potential to export to Arabic-speaking countries than local SMEs.
Civil society organizations and business associations should:
Support and improve SME investment readiness.
CONTRIBUTE TO THE EVIDENCE BASE TO SUPPORT SOCIAL AND ECONOMIC INTEGRATION
Other organizations should join Building Markets in producing and publishing research that helps enable SME success and expansion in the Turkish economy to benefit all.
Download the brief: The Positive Economic Contributions of Refugees in Türkiye in ARABIC, ENGLISH, TURKISH