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DIASPORA ENGAGEMENT POSSIBILITIES FOR LATVIAN BUSINESS DEVELOPMENT BY DALIA PETKEVIČIENĖ CONTENTS CHAPTER I. Diaspora Engagement Possibilities for Business Development .................. 3 1. Foreword .................................................................................................................... 3 2. Introduction to Diaspora ............................................................................................ 5 2.1. What is Diaspora? ............................................................................................ 6 2.2. Types of Diaspora ............................................................................................. 8 3. Growing Trend of Governments Engaging Diaspora ............................................... 16 4. Research and Analysis of the Diaspora Potential .................................................... 18 4.1. Trade Promotion ............................................................................................ 19 4.2. Investment Promotion ................................................................................... 22 4.3. Entrepreneurship and Innovation .................................................................. 28 4.4. Knowledge and Skills Transfer ....................................................................... 35 4.5. Country Marketing & Tourism ....................................................................... 36 5. Case Study Analysis of Key Development Areas ...................................................... 44 CHAPTER II. Diaspora Mapping: Strategy and Tactics ................................................. 54 1. Methodology Recommsendations for Mapping the Diaspora ................................ 54 1.1. Research for Prospects ................................................................................... 54 1.2. Tapping Into Technology ................................................................................ 56 1.3. The Digital Generation of The Diaspora ......................................................... 57 2. Sources and Means to Identify Target ..................................................................... 58 2.1. Sources to Identify Diaspora .......................................................................... 58 2.2. Means of Mapping Target Group ................................................................... 59 3. Tactics of Building Diaspora Registry ....................................................................... 65 CHAPTER III. Diaspora Engagement for the Economic Development of Latvia ........... 67 1. Latvian Diaspora Status Quo and Potential ............................................................ 67 1.1 . Overview of Latvian Diaspora status quo and potential ................................ 67 1.1.1. Latvian Diaspora: Changing Definitions and History ................................... 68 1.1.2. Latvian Diaspora: numbers and geographies .............................................. 69 1.1.3. Urbanization in Latvia: Moving to the Cities ............................................... 75 1.1.4. New Generation Migrants of Latvia ............................................................ 76 1 1.1.5. The Potential of Returning Migrants ........................................................... 77 1.2 . Latvian Diaspora’s Effect on Economy ........................................................... 79 1.2.1. Remittances: Latvians Sending Money Home ............................................ 80 1.2.2. Latvian Diaspora’s Effects on Investment, Entrepreneurship, Growth ...... 83 1.2.2.1. World Class Achievers .............................................................................. 85 1.2.2.2. Change Agents .......................................................................................... 88 1.2.2.3. First Movers .............................................................................................. 91 1.2.2.4. Tipping Agents .......................................................................................... 94 1.2.2.5. Career Returnees and Remote Mentors .................................................. 97 1.3. Research and Situation Analysis of Latvian Diaspora Policies ....................... 99 1.3.1. Governmental Policies for Engaging Diaspora ............................................ 99 1.3.2. Implementing Latvian Diaspora Policy ...................................................... 103 1.3.2.1. Diaspora Networks in Action .................................................................. 104 1.3.2.2. Professional Clubs of Latvian Diaspora .................................................. 107 1.4. Analysis of Diaspora Engagement within LIAA ............................................. 109 1.4.1. Overview of Export Priorities .................................................................... 109 1.4.2. Overview of FDI Promotion Priorities ....................................................... 110 1.4.3. How LIAA works with Latvian Diaspora .................................................... 112 2. Engaging Latvian Diaspora: Framework and Recommendations .......................... 120 2.1. Diagnosis and Guiding for Engaging Diaspora ............................................. 120 2.1.1. SWOT Analysis of Engaging Latvian Diaspora ........................................... 120 2.1.2. The Scope of Recommendations............................................................... 121 2.2. Framework of the Diaspora Engagement Policy .......................................... 122 2.3. Policy Recommendations for Engaging Latvian Diaspora ............................ 124 2.4. Recommendations for Action Priorities ....................................................... 131 2.4.1. Encourage FDI and DDI to Latvia ............................................................... 132 2.4.2. Attract Venture Capital and Support Local Businesses to Grow............... 135 2.4.3. Focus on Young International Professionals and Students ....................... 138 2.4.4. Look for Synergies within Existing Activities ............................................. 144 3. Closing Remarks ..................................................................................................... 145 List of Qualitative Interviews 146 2 CHAPTER I. DIASPORA ENGAGEMENT POSSIBILITIES FOR BUSINESS DEVELOPMENT SITUATION ANALYSIS AND GLOBAL PRACTICE RESEARCH 1. FOREWORD Facing globalization, countries around the world have begun to target their Diasporas in new ways and seek to build mutually beneficial relationships and partnerships with them. Rather than viewing them as being “gone” from the home country, they re-engage with the homeland through strategic Diaspora initiatives such as investment and trade programs, formal mentoring programs, and cultural initiatives. Though often encouraged, they do not always need to return in order to make a difference. Nowadays the physical presence does not always reflect a case of one’s impact. In the new world of remoteness, countries also compete for the allocation of time and intellectual input, money or other form of human resource impact. This impact is not necessary created by a person physically present inside the geographical border of the country. “Global Diasporas represent a collective of people through whom networks can be created and individuals mobilized for mutual benefit of both Diasporas and the home country. Global Diasporas serve as an important channel, facilitating the two-way flow of capital. That capital presents itself in every form be it human, social, intellectual, cultural or financial. Looking at capital flows alone, the transfer of funds in the form of remittances, bonds, philanthropy or business investment is massive by any scale and growing.”1 1 Kingsley Aikins, Nicola White Global Diaspora Strategies Toolkit (Diaspora Matters, 2011) 3 This Strategy paper aims to provide analysis and research of Diaspora engagement possibilities for creating the best possible set of policy recommendations to develop the growth framework for Diaspora driven possibilities for promoting Latvian business development. The author is referring to the insights and research done by most accomplished Diaspora strategists. Therefore, it includes three main steps in its methodology:2 Global best practices, case studies’ analysis and data collection Review of existing policies and initiatives in Latvia Expert experience, frameworks and recommendations Analysis of these three elements will allow providing with Latvia-specific Diaspora driven business development framework and recommendations. “DIASPORA CAN CONTRIBUTE TO DEVELOPMENT BY CREATING BUSINESSES AND JOBS, STIMULATING INNOVATION, CREATING SOCIAL CAPITAL ACROSS BORDERS, AND CHANNELING POLITICAL AND FINANCIAL CAPITAL TOWARD THEIR COUNTRIES OF ORIGIN.” K. NEWLAND, H.TANAKA, 20103 2 Based on Diaspora Direct Investment (DDI) as a Development Tool methodology (IDB, 2010) 3 K. Newland, H.Tanaka Mobilizing Diaspora Entrepreneurship for Development (USAIDD, MPI, 2010) 4 2. INTRODUCTION TO DIASPORA “DIASPORA COMMUNITIES ARE OFTEN THE PRIME MOVERS IN RESPONDING TO IMPORTANT EVENTS, WHETHER WE’RE TALKING ABOUT A NATURAL DISASTER OR A TERROR ATTACK, A FINANCIAL CRISIS, OR EVEN EMERGING BUSINESS OPPORTUNITIES.” JOHN KERRY, U.S. SECRETARY OF STATE, WASHINGTON, DC, OCTOBER 9, 20154 According to the United Nations, more than 230 million people lived outside of their countries of birth in 2013, and over 700 million migrate within their countries. “Along with remittances,
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