Gospodarka I innowacje

2010 2015 2020 
EU-27 
9.3 
7.1 
9.0 
Germany 
10.5 
7.5 
7.8 
EU-8 
11.3 
6.5 
11.1 
Czech Republic 
8.3 
4.4 
6.7 
Estonia 
9.7 
5.5 
13.8 
 
First, consider the static "labor markets" setting. A certain number of firms' productivity in a particular 
host country is determined by labor costs, additional fixed technological capabilities, and trade costs. 
Immigrants enter the country only as workers and are perfectly interchangeable with the local 

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103 
International Journal of Economy and Innovation | Volume 29 | Gospodarka i Innowacje 
Kielce: Laboratorium Wiedzy Artur Borcuch 
Copyright © 2022 All rights reserved International Journal for Gospodarka i 
Innowacje This work licensed under a Creative Commons Attribution 4.0
population. In this model, skilled migration has limited economic impact. In small open economies 
(such as the UK), a net migration shock increases labor supply and temporarily lowers the average local 
wage. If wages are sticky, local jobs may also fall. Over time, domestic wages and employment rates 
should adjust to their pre-shock levels through international capital flows and the expansion of labor-
intensive industries. If the migration shock consists of skilled workers, it lowers the relative wages of 
skilled natives and raises the wages of low-skilled natives. For firms, migration helps labor productivity 
by reducing labor costs. But migration does not have a broader effect because other productivity 
modifiers are exogenous. 
Next, consider the dynamic "growth" setting. Here, firms can change their labor costs, innovation 
capacity, and trading environment. Endogenous growth models show how human capital can help 
generate new ideas that push the technological frontier and help increase productivity. Firms that invest 
in R&D can thus increase innovation capacity and improve productivity, but may face 
informational/financial constraints in doing so. Trade costs are now determined in part by information 
asymmetries and coordination problems, and firms that can lower them will increase productivity (and 
subsequently gain market share). Existing firms also face competition from entrepreneurs who build 
businesses around new ideas. 
In such circumstances, skilled immigration has several effects, particularly on the production and 
consumption sides of the economy. For example, access to knowledge and ideas may be highly uneven, 
national entrepreneurial "capacity" may vary, and the characteristics of innovation ecosystems may 
limit the diffusion of ideas. This opens up space for skilled/entrepreneurial individuals to contribute to 
knowledge production and for international networks to help spread innovation across space. 
Similarly, complex global production chains imply high search, transaction and management costs. 
Intermediary actors, such as skilled migrants, can help firms enter new markets and coordinate complex 
business activities. Similarly, production complementarity between skilled migrants and natives can 
increase returns to capital, thereby generating higher savings and inflows of foreign direct investment. 
All of these channels contribute to productivity and/or competitiveness in the sense of increasing 
market share for firms in the host country. These channels require relaxing some assumptions from the 
static framework. In particular, migrants can work as entrepreneurs and investors, as well as workers; 
migrants have financial, social and network capital, as well as human capital; and immigrants and 
natives may be imperfect substitutes. 
When thinking about these issues, it is useful to think about the side effects of "production" and 
"consumption". Production channels affect productivity and its driving force and can operate at 
different levels. First, individual migrant status may preselect entrepreneurial individuals who 
contribute to new business formation and/or open new market niches or highly human capital "stars" 
who contribute to innovation. Second, firms that hire a "star" researcher or scientist can significantly 
increase their productivity at the expense of other competing firms. More broadly, diverse workforces 
may have an advantage in generating innovative ideas, particularly in skills and knowledge-intensive 
sectors that create significant added value. Firms in these high-value sectors may also benefit from the 
access of skilled migrants to co-ethnic networks, which may facilitate knowledge diffusion or reduce 
coordination costs, thereby improving international market access. 
Third, we can see indirect spillover effects at the sector or market level. Migrant entrepreneurs can 
stimulate competition in domestic markets, forcing incumbents to innovate and increase their 
productivity. Diversity within specific firms and diaspora externalities can also contribute to the 
innovation of all firms by further spilling knowledge across industries. Similarly, changes in the 
activities of migrant entrepreneurs and investors and the market entry of specific firms can alter the 
overall patterns of trade and direct investment between home and host countries. 
On the consumption side, the effects of skilled migration are more difficult to isolate. Locally, high 

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104 
International Journal of Economy and Innovation | Volume 29 | Gospodarka i Innowacje 
Kielce: Laboratorium Wiedzy Artur Borcuch 
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Innowacje This work licensed under a Creative Commons Attribution 4.0
levels of net migration may increase the level of demand for non-traded goods and/or lead to shifts in 
demand in these sectors. Migration can also increase competition for goods whose supply is uncertain, 
such as housing and rising local prices. 
There is a well-established 'ethnic entrepreneur' literature linking migrant and minority communities to 
self-employment, entrepreneurship and small business formation. Migrants and minority ethnic 
communities are generally more likely to be self-employed. The enterprise level is influenced by the 
availability of opportunities, individual and group characteristics, and emerging strategies. An urban 
location may favor an ethnic enterprise due to urban demographics and/or greater economic 
opportunities. 
Ethnic entrepreneurship can be reactive: exclusion from mainstream economic life can force groups to 
develop new businesses, products and services. On the contrary, specific characteristics and attitudes of 
society can develop active entrepreneurship. For example, "middle-class minority" status may help 
individuals create business opportunities across social groups. Alternatively, entrepreneurs may benefit 
from the externalities of migrant enclaves, such as better access to information or finance. 
This study is not concerned with human capital per se: individual migrant entrepreneurs can be highly 
skilled individuals or low-skilled actors entering sectors with low entry barriers. A recent set of studies 
focuses more on skilled migrants and identifies two more channels. As shown in Roy's model, the 
migration decision involves balancing risks against expected future returns, so the migration decision 
may positively select highly skilled and/or highly entrepreneurial individuals. Migrants also face 
cheaper opportunities to invest in new skills or ways of working, so migrants may be more flexible 
economic actors – for example, more willing to participate in disruptive business models. a skills-based 
migration policy will then help attract highly skilled professionals. and/or entrepreneurial “stars” to host 
economies. 
In closed economies, the external influence of co-ethnic enclaves or groups may be limited by group 
size or external constraints. However, in the context of globalization, transnational diaspora groups can 
be an important source of social and cultural capital. Likewise, highly skilled and motivated 
transnational entrepreneurs may establish new ventures in several locations or act as liaisons between 
local firms and those in "home" countries. 
In theory, all four of these channels can be limited. First, the apparent effects of skilled 
migrant/minority status may simply be attributable to individual stocks of human capital or to broader 
structural conditions. Second, discrimination can limit opportunities for business creation, even in 
reactive settings; and may limit intermediary-type arbitrage opportunities. Third, in a closed economy, 
enclave externalities may also be limited by size (the smaller the group, the smaller the within-group 
matches. Finally, diaspora /enclave opportunities may be weaker than other factors; and some 
transnational teams may be more organized and efficient than others. 
The main effect of migration-entrepreneurial channels is on levels of business creation. There may also 
be wider implications. First, new firm entry increases market competition and may induce incumbent 
firms to innovate in response. Second, net firm entry accounts for a large share of national productivity 
growth, so higher levels of entrepreneurship can increase short-run productivity. 

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105 
International Journal of Economy and Innovation | Volume 29 | Gospodarka i Innowacje 
Kielce: Laboratorium Wiedzy Artur Borcuch 
Copyright © 2022 All rights reserved International Journal for Gospodarka i 
Innowacje This work licensed under a Creative Commons Attribution 4.0