Michael de Laine

By Michael de Laine, The Copenhagen Voice, 30 June 2009

Relatively more immigrant entrepreneurs create jobs than ethnic Danes, but they do not manage as well as the Danes, a new study shows. Their businesses are smaller and do not grow as quickly.

Relatively more immigrant entrepreneurs create jobs than ethnic Danes, but they do not manage as well as the Danes, according to a new study released by the Danish Enterprise and Construction Authority. The immigrants’ businesses are smaller and do not grow as quickly.

The report shows that 0.49% of people with a foreign background become entrepreneurs in Denmark compared with 0.27% among ethnic Danes - and women immigrants in particular are twice as likely to become entrepreneurs as their Danish counterparts.

The authority sees a number of reasons for this development – such as a strong tradition for being an independent trader in the immigrant’s home country or difficulties in finding a job in Denmark.

Immigrant entrepreneurs typically start businesses in branches where competition is high, yields are low and investors have little interest, the authority’s report said.

Of the more than 5.5 million people who live in Denmark, about 400,000 are immigrants and 125,000 are the children of immigrants. These figures include the 245,000 immigrants and 108,000 children of immigrants from non-western countries such as Turkey and Iraq.

About 9%, or 1,450, of the 15,000 people who start a business in Denmark each year are immigrants or children of immigrants fro, non-western countries who represent 6% of the population.

“Entrepreneurs with a foreign background contribute to a dynamic entrepreneurial culture in Denmark,” said Anders Hoffmann, deputy director of the Danish Enterprise and Construction Authority, in a comment to the authority’s new report. “But the growth potential for entrepreneurs with a foreign background is far from developed as few of them have growing businesses. We need more entrepreneurs with a foreign background to think in terms of development and growth in their businesses.”

There is a great need for role models, so existing and potential entrepreneurs with a foreign background can get inspiration and advice for generating growth, the report stated. Many immigrant entrepreneurs do not make use of the advisory service of the business development system - some of which is free - and they could benefit from more education. While 56% of ethnic Danes have vocational training, only 31% of 20-34-year-old children of immigrants have such training.