What is a Refugee-Inclusive Business?

By Jessica Davis Pluess, Challenge Director, Business Fights Poverty

As part of the Business and Refugees Challenge, we have been exploring some of the barriers to mobilizing more business action to support refugees’ resilience in low to middle income countries. In the process, we have uncovered numerous examples of innovative business ideas, ambitious commitments, and genuine efforts to support the needs of refugees.

We stand #WithRefugees today on World Refugee Day and every other day of the year.

A few weeks ago, the International Finance Corporation published a study revealing that the Kakuma refugee camp and surrounding neighborhoods in northern Kenya, one of the largest and long-standing refugee settlements, represents a US$56 million market opportunity. This is eye-opening but perhaps, even more interesting is how entrepreneurship and markets for consumer goods, real estate, education, telecommunications, and many other goods and services are flourishing in the area despite significant practical and legal constraints.

These findings are important because they reinforce the point that supporting refugees is not just a moral obligation and shared responsibility. It is also an economic and social imperative as well as an opportunity for business to bring the efficiencies, scale, innovation, and durability of market-based solutions. When people are not able to achieve their full potential and face constant threats to their health and wellbeing because they are uprooted from their homes, their education is interrupted, or they are exploited in work on the margins of society, there are significant implications for all of us.

Over the last three months, as part of the Business and Refugees Challenge, we have been exploring some of the barriers to mobilizing more business action to support refugees’ resilience in low to middle income countries. In the process, we have uncovered numerous examples of innovative business ideas, ambitious commitments, and genuine efforts to support the needs of refugees.

We have also discovered that translating these aspirations and commitments into viable, scalable solutions that benefit refugees, host countries, and business is challenging. Although there is greater awareness of the business opportunity of supporting the refugee response, we found that there are gaps in our knowledge of refugee-inclusive business models and what can enable these models to work effectively and scale. As one company representative we engaged said, “Companies aren’t sure how to engage in the refugee response, especially when they aren’t affected by displacement directly. There is not enough awareness on how to engage.”

Formal hiring of refugees in company operations and supply chains is one important model. But, many other models are needed that take into account the diversity of refugee skills, education, and needs as well as the local policy, social, and economic context. Our interviews and research found some emerging models such as joint ventures with refugee-owned businesses, mobile-enabled e-commerce models, digital freelance and outsourcing work, pay-as-you-go off-grid solar distribution, franchise sanitation solutions, digital education, among others.

Although many of these are still in early phases, they present exciting possibilities to take what we know about “inclusive business” and adapt it to the context and needs of refugees. “Refugee-inclusive businesses” are commercially viable business ventures that include refugees as employees, suppliers, distributors and consumers but they also take into consideration the unique needs, external context, and obstacles refugees face to inclusion.

Our initial findings from the Challenge indicate that there are several unique features of refugee-inclusive business models.

For example, refugees are far from a uniform group but rather have diverse skill sets and experience they can bring to business ventures. Building models that match or harness these different skill sets appropriately is essential. Alexandra Clare from Re:Coded, a start-up that helps refugees become future tech leaders in Turkey and Iraq, explained, “the humanitarian sector is focused on the most vulnerable. Higher skilled refugees are also vulnerable but the approach to reducing their vulnerability and providing them with economic opportunities may be different.” It is about finding different pathways and matching supply of skills with demand for income generating opportunities.

Our interviews also revealed the importance of considering the benefits for host countries in business models. This includes identifying sectors for investment that have the potential to create opportunities for refugees and strengthen local economies and infrastructure. This is also about supporting vulnerable groups among the local population and promoting social cohesion. For example, Pearson’s ‘Every Child Learning’ partnership with Save the Children has prioritized improving learning outcomes for both local Jordanians as well as refugees and has involved both groups in the innovation process to develop their Math app “Space Hero.”

The legal and practical constraints refugees face to engaging in formal education and employment, can often lead refugees into informal, precarious work. Sasha Muench of Mercy Corps said, “refugee-owned businesses outside of camp settings are in a gray zone that can put them at risk of abuse and exploitation.” There is a need for models that find alternatives to formality without posing risks to refugees’ rights and safety. For example, the European Bank for Reconstruction and Development is working to set up sole proprietorships to allow refugees to provide freelance or contract services in Turkey and elsewhere.

Similarly, UNICEF has been working with the Akelius Foundation to develop a an innovative language-learning tool for children on the move, as well as out-of-school children in humanitarian and multilingual contexts. This recognizes that language acquisition is an essential foundation for children to enter formal schooling. With only 9 percent of refugees able to attend secondary school,  informal education can help keep kids learning and serve as a bridge to the formal system.

Refugee-inclusive business models also need to consider how to meet immediate needs and prepare refugees for an uncertain albeit bright future. This means providing skills and opportunities that can support refugees wherever they are located and that are transferable to other sectors and countries. Justin Sykes at Innovest Advisory said that “there is a need for circular refugee models that also consider ways to create opportunities for refugees back in their countries of origin.”

Interviewees also explained that innovation is important but cautioned about too much emphasis on coming up with the next big idea. As one representative of UNHCR explained, “some ideas are not always aligned with refugee needs and have the ability to scale.”

Over the next few months, we will be identifying practical refugee inclusive business models and enablers of scale. Let us know what you think. Are you building a refugee-inclusive business model?  What factors should be considered when building refugee-inclusive business models? What are the key enablers of scale?

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