Immigration and entrepreneurialism

Austin, Texas is a model of economic advancement through managed migration

THE WORD ‘immigration’ in the UK has recently become a political ‘hot potato’, but – managed correctly – immigration could well be the key to Wales’s future prosperity.

Increased immigration is not a solution if it simply delays the problems of an ageing population. But the Welsh Assembly Government needs to set a population goal.

Although Wales has historically experienced net emigration in the past, inward migration is nothing new. For example, it is already true that the Welsh economy and society would be almost unworkable without the contribution from first and second generation immigrants now working in the NHS, in education, in construction, and in restaurants and retail. While Wales would no doubt wish to emulate Ireland by attracting back past emigrants, this is a longer-term objective, best achieved by creating a stronger economy.

In the shorter term there are alternatives. For example, we might provide incentives for non-UK citizens to stay in Wales. This could be achieved through attracting economic migrants or through attempting to retain overseas students rather than forcing them to return to their home countries. This seems the most feasible way of not just reversing the depopulation trend, but also in attracting entrepreneurial talent to Wales. The desire to succeed is surely strongest in those who are prepared to break with their own families, friends and country of upbringing in order to prosper.

There are a number of good reasons to encourage economic immigration: Wales’s population is both declining and ageing, and the natural growth rate shows no sign of compensating for this; company start-up rates are much higher for people of ethnic backgrounds than for any other group; and U.S.-based evidence also points to a much higher rate of academic entrepreneurs amongst overseas students who stay on after graduation.

The difficulty may be in attracting the economic immigrants most desired, since other countries have similar problems. While some media outlets still like to dwell on the potential disadvantages of immigration, many governments of developed economies have quietly accepted the need for greater immigration in order to keep the economic wheels turning. Even low-skilled immigrants are equally crucial in keeping the economy growing through filling vacancies in areas like personal care, construction and retail.

Whether citizens of other countries want to permanently settle in Wales to live and work, or to do so on a temporary basis before returning to their homeland, their participation in and contribution to Wales’s economic and social improvement should be welcomed. As well as the direct economic benefits from migration, there is another important reason to encourage greater diversity in Wales: the impact on the Welsh economy and society of having a more open, tolerant society.

The work of academics like Richard Florida suggests that such an ‘open society’ is likely to encourage greater diversity of economic activity and act as a magnet to attract entrepreneurs, both at home and from afar. This need not be as difficult as it may at first appear. Cardiff and Swansea are popular student cities with thriving arts sectors, as well as excellent natural attractions nearby.

This is a good basis from which to cultivate the Austin, Texas phenomenon: the bringing together of technology, talent and tolerance to allow a relative backwater to compete with the likes of Silicon Valley. Austin has been found to be more affordable and offers improved lifestyle, as well as job prospects.

The challenge for Wales’s cities is to offer the same in competing with the superior job prospects of the south of England. However, in order to build on its natural advantages, Wales has to reinforce its reputation in other areas: in terms of being a welcoming country to foreign nationals; in terms of being tolerant to minorities; in terms of encouraging cultural and economic diversity. This may involve greater support for crucial elements like universities and cultural activities, as well as strengthening of minority cultures and areas. It is also important that Wales promotes itself more effectively, with a greater degree of co-ordination and using a generic brand to cover promotion of diverse activities, from the arts to inward investment.

If we can build on Wales’s natural advantages by widening our cultural and economic appeal, we can also begin to attract more people to the country and help overcome the negative demographic changes currently built into our population. However, there is likely to be increasing international competition in this area, and so attracting more outsiders and retaining our own potential migrants will only be achievable by such ideas being positively embraced.