Over 120 million people worldwide have been forcibly displaced. Among them, a striking number become entrepreneurs — creating businesses in host countries where they often lack legal status, language proficiency, social networks, and access to formal financial systems. Refugee entrepreneurship is not a marginal phenomenon but a substantial economic force that challenges conventional theories of venture creation, which assume baseline access to resources, institutions, and markets that refugees do not have.
Entrepreneurship in Non-Western Contexts
Mousa (2024), in International Migration, examines refugee entrepreneurship in a non-Western host country context. Most refugee entrepreneurship research has focused on Western host countries — Germany, Sweden, the US — where institutional frameworks, while imperfect, provide basic legal protections and formal economic access. Mousa's research examines contexts where these institutional supports are weaker or absent, revealing how refugees create ventures through informal networks, community solidarity, and creative adaptation to hostile institutional environments.
The findings challenge the assumption that entrepreneurship requires a supportive ecosystem. Refugees create ventures not because the environment is favorable but because employment alternatives are unavailable or inadequate. This necessity-driven entrepreneurship produces businesses that are smaller, less formal, and more precarious than opportunity-driven ventures, but also more resilient to shocks — because they were created under adverse conditions and their founders have developed adaptive capacity through the displacement experience itself.
Trauma-Informed Support
Nafari and Ruebottom (2025), in the International Small Business Journal, propose a trauma-informed approach to refugee entrepreneurship support. Their research recognizes that refugee founders carry psychological burdens — trauma from conflict, displacement, and loss — that interact with entrepreneurial cognition and decision-making in ways that standard business support programs do not address.
A trauma-informed approach does not pathologize refugee founders but recognizes that trauma affects risk perception (refugees who have experienced unpredictable violence may either over-estimate or under-estimate business risks), social trust (refugees who have experienced betrayal by institutions may resist engagement with formal support systems), and temporal orientation (refugees living with uncertainty about their legal status may prioritize short-term survival over long-term business development).
The practical implication is that entrepreneurship support programs designed for general populations may be ineffective or even harmful for refugee founders if they do not account for the psychological dynamics of displacement. Programs that integrate trauma-aware coaching, build trust through community-embedded delivery, and accommodate the legal and social constraints refugees face produce better outcomes than programs that treat refugees as a subset of general entrepreneurs.
Host Country Perspectives
Reis et al. (2024), in Cuadernos de Gestion, examine refugee entrepreneurship from the host country perspective — analyzing the drivers and obstacles that host country institutions, policies, and attitudes create for refugee venture creation. Their analysis reveals that the same host country can simultaneously enable and constrain refugee entrepreneurship through different policy domains: labor market policies that restrict formal employment push refugees toward self-employment, while business registration requirements that assume stable residency and documentation create barriers to formal business creation.
The institutional friction produces a distinctive form of entrepreneurship that operates in the gaps between formal and informal economies. Refugee businesses that cannot obtain formal registration operate informally, providing services within refugee and diaspora communities. Some of these businesses grow to serve broader markets, gradually formalizing as the founder's legal status stabilizes. Others remain permanently informal, invisible to official statistics but economically significant within their communities.
The broader lesson from refugee entrepreneurship research is that venture creation capacity is more robust than resource-based theories suggest. When people are stripped of nearly everything — financial capital, social capital, institutional support, legal status — many still create businesses. This extreme case reveals the irreducible core of entrepreneurship: the human capacity to identify opportunities and organize resources creatively, even when the resources are minimal and the environment is hostile.
The policy implications extend beyond refugee-specific programs. The resilience and creativity that refugee entrepreneurs demonstrate under extreme constraints offer lessons for entrepreneurship policy more broadly. If ventures can be created with minimal formal resources, then the barriers to entrepreneurship in non-refugee contexts, such as licensing requirements, registration costs, and access-to-capital thresholds, may be higher than necessary. Policies that reduce these barriers for all entrepreneurs, while providing additional support for refugee-specific challenges like legal status and trauma recovery, would create more inclusive entrepreneurial ecosystems. The refugee entrepreneur, operating at the boundary of what is possible, illuminates the distinction between obstacles that are genuinely necessary and those that are merely conventional.
The economic contribution of refugee entrepreneurs is also systematically undercounted because much of their activity occurs in informal sectors that official statistics do not capture. Studies that account for informal economic activity consistently find that refugees contribute more to host economies than conventional measures suggest.