DIASPORA START-UP PROGRAMS AND CREATIVE INDUSTRIES: EVIDENCE FROM ROMANIA.

• Author: Croitoru, Alin

1. Introduction

   Romania is one of the main countries of origin for intra-European migration (Fries-Tersch et al., 2020; Recchi et al., 2019). To cope with this situation, the political authorities have initiated public debates and started formulating policies focused on managing migration flows and stimulating return migration (Croitoru, 2021; Serban, 2015; Serban and Croitoru, 2018). This interest in return policies also exists in other Central and Eastern European countries such as Poland (Karolak, 2020; Lesinska, 2013; Ministry of Economic Development, 2017), Latvia (Klave and Supule, 2019; Lulle, Zaiga and Bauls, 2019), and Bulgaria (Zareva, 2018). Most of the existing initiatives were developed around the idea that return policies should be selective so that they motivate to return home those individuals who are the most useful in terms of the country of origin's economy and labor market (Boros and Hegedus, 2016; Wahba, 2015). The literature focused on return migration emphasizes that most of the policies implemented by origin states aim to integrate returnees into the labour market by assisting them to find proper jobs or to start small businesses upon return.

   Against this background, returnees have been portrayed as entrepreneurs who have a great potential to contribute to their home country's economy--one of the myths policymakers cherish the most (Sinatti, 2015). Concurrently, officials have started to present small companies in the creative industries as one of the most valuable assets for capitalizing on individuals' human capital and for consolidating economies, as can be seen in European programmatic documents (European Commission, 2011). The overlapping between these two patterns inspired our interest in exploring the propensity of the return migrant entrepreneurs towards these valued niches of entrepreneurship within a unique comparative framework.

   Recent Romanian policy initiatives seeking to stimulate the emergence of entrepreneurship through dedicated start-up programs provide an excellent opportunity to reflect on the entrepreneurship of migrants. It also allows us to examine its integration into the regional business ecosystems in Romania. Government officials have designed two parallel programs: Romania Start-up Plus for people who live in Romania and Diaspora Start-up for Romanian citizens who have resided abroad for a minimum of 12 months before joining the program. Both programs began operations in 2018 under the management of the Romanian Ministry of European Funds (MEF). They were created for roughly identical reasons but with one essential difference in eligibility criteria: residence within the country for the first and residence abroad for the second.

   The present study seeks to provide a general overview of the Diaspora Start-up program by conducting a series of comparisons with Romania Start-up Plus. The main research objective was to explore the particularities of the former program and to generate an agenda for further research on the topic. To accomplish this objective, we analyze the regional distribution of businesses within the start-up programs and examine their regional profiles by looking at the prevalence of the new companies in the creative industries.

   The remainder of this paper is structured as follows. In the next section, a literature review discusses the main features of Romanian migration patterns and points out the various facets of the relationship between international migration and entrepreneurship. The third section provides an outline of the two start-up programs, discusses their main commonalities, and presents insights into their implementation. The fourth section focuses on methodology, describes the dataset and specifies the operational definition used to identify start-ups belonging to the creative industries. The main findings are presented in the fifth section through a series of comparisons and a map generated specifically for this research. The latter shows the classification of 40 Romanian counties based on their achievements within the Diaspora Start-up program. The last section summarizes the conclusions and discusses them in relation to an agenda for further research on this topic.

2. Literature review

   Romania is one of the Eastern European countries that went through a double transition period from communism toward democracy and a free market economy (Wolchik and Curry, 2018). This process included major changes in terms of labor opportunities within the country and a gradual growth of the segment of population which searched employment opportunities abroad. During the 1990s, the first phase of the transition encompassed the collapse of the former communist colossal industrial entities (Sucala, 2018) and generated important social problems including, among others, unemployment, deprivation, and violent protests (Croitoru, 2011; Varga, 2014). Rural areas also experienced a brutal de-collectivization process with direct consequences in terms of underdevelopment (Swain, 2013) and the prevalence of subsistence agriculture (Mihalache, 2020; Mihalache and Croitoru, 2011).

   Against this background marked by scarce employment opportunities, numerous Romanians used international migration as their last resort (Potot, 2010; Sandu, 2010). These phenomena were affected by important regional dynamics, so emigration flows emerged earlier and developed faster in some regions (Sandu, 2010). However, in 2007, Romania became a member state of the European Union (EU), and the opportunities for international mobility and migration were restructured accordingly. Romanians gained the right to free movement within the borders of the EU and, gradually, the right to work in any other EU country. This contributed to increased migratory flows so that, in 2020, Romania had over 3.5 million citizens (i.e., over 15% of the country's population) officially registered as residents in other EU countries (Eurostat, 2021). Simultaneously, the selective nature of migration decreased as international mobility became available to new categories of the population. People emigrated for a broader range of reasons including education and life-style choices, and migrants began to explore new destinations (Sandu, 2017; Sandu, Toth and Tudor, 2018). Finally, return migration became an increasingly accessible option and required less commitment because individuals could re-enter migratory pathways more easily (White, 2014, 2019). These significant changes along with gradual improvements in the national economy contributed to a smooth shift toward debating and designing policies that stimulate return migration (Croitoru, 2021; Serban, 2015; Serban and Croitoru, 2018).

   International migration is often presented as an experience that enhances individuals' propensity toward entrepreneurship (Dustmann and Kirchkamp, 2002; McCormick and Wahba, 2001; Sabar and Pagis, 2015), providing them with competitive advantages in setting up new businesses upon return. These benefits are linked to various types of capital (e.g., economic, human, and social). Such advantages fluctuate from one individual to another depending on a series of personal characteristics (e.g., socio-demographic and personality features) and types of migratory experiences (e.g., length of migration, activities performed abroad, and country of destination).

   Many scholars have focused on the relationship between migration and returnees' entrepreneurship. The results emphasize that financial savings can be used to capitalize on business initiatives (Black, King and Tiemoko, 2003; Croitoru, 2020) and that the human capital accumulated abroad can endow individuals with skills useful in entrepreneurial projects (Vlase and Croitoru, 2019; Williams, 2007). In addition, transnational social networks can facilitate exchanges of useful information, goods and services (Cosciug, 2017; von Bloh et al., 2020). An exhaustive list of the potential effects of migration cannot be made because this phenomenon is quite heterogenous. Multiple types of migratory experiences can be identified even if the discussion is restricted to economic migrants and to a specific country of origin. The research objective of this article is to find out to what extent the entrepreneurship exhibited by return migrants differs from the entrepreneurial initiatives enacted by individuals living within Romania.

   During the communist period, Romania's economy was centralized, planned, and completely controlled by the central government (Sucala, 2018). From 1990 onward, Romanians started to join the capitalist economy through entrepreneurship (Croitoru, 2016; Stoica, 2004, 2012), and recent research has found that entrepreneurship has become a high-status, desirable employment option in Romania. For instance, the Global Entrepreneurship Monitor reports that 75% of Romanians feel that 'entrepreneurs have high social status' and over 72% believe that 'entrepreneurship is a good career choice' (Kelley, Singer and Herrington, 2016).

   Stimulating entrepreneurship is a general EU objective (European Commission, 2013), but the Romanian authorities have managed to connect these policies to the idea of supporting return migration. This focus is important because, even if proposed policies have been debated previously and added to the agenda of public policies in Romania (Croitoru, 2021), few initiatives have been actually implemented. The Diaspora Start-Up is the main program in terms of size and national coverage, about which further details are provided in the next section.

   A broader understanding of business creation and entrepreneurial initiatives also needs to take into account entrepreneurial ecosystems (Schmutzler, Andonova and Perez-Lopez, 2021). Diasporas can become part of these ecosystems through multiple mechanisms that include the financial savings and remittances of migrants (Schmutzler, Andonova and Perez-Lopez, 2021), knowledge transfer, spillover effects...