3.2% of the world’s population is migrants; putting them all together in one country would create the world’s fifth most populous country with 232 million people. Europe and Asia combined host nearly two-thirds of all international migrants worldwide. Europe is the most popular region with 72 million migrants in 2013, compared to 71 million in Asia. Since 1990, Northern America has recorded the biggest gain in the absolute number of migrants, adding 25 million and has experienced the fastest growth in migrant stock by an average of 2.8% year. (Source: UN) According to Gallup these migrants are not alone. Around 13% of the world’s adults – or about 630 million people – say they would like to leave their country and move somewhere else permanently, with the U.S. being the most desirable destination.
Diasporas have always been a strong economic force with global remittances from migrants tripling over the past decade and now outstripping official aid. As travel becomes cheaper and easier, these networks are getting larger and more connected, helping to spread knowledge, wealth, and product demand, as well as opening doors by connecting people and businesses globally. Yet many countries and companies do not recognize the potential of the diaspora network and how it can contribute to economic progress and business growth. Clearly, disaporas are important in terms of spending power. But this is just once facet of the potential benefits for organizations and governments.
Diaspora networks can speed up information flows, e.g. a cousin living in Bangladesh knows about a great production site and alerts his cousin in Germany who is looking for place to outsource. In addition, many diasporas include people educated at Western universities who may return to their home country but keep exchanging ideas with their friends still living and working in other countries, promoting knowledge flows globally. Another important “gift” is cultural awareness and language skills, which are critical factors for success when companies want access to, e.g. foreign markets, production sites, and manpower. A study from Harvard Business School suggests that U.S. companies that employ lots of ethnic Chinese people find it much easier to set up in China without a joint venture involving a local firm. (Source: The Economist)
The U.S. has 32 million Mexican-Americans; Germany has 4 million residents of Turkish descent; and the UK has 3 million South Asians. The growth of these global migrant communities has led some companies to develop strategies to tap into new growth opportunities. One example is Bangladesh’s largest food company PRAN RFL that started targeting the Bangladeshi diaspora, expanding to serve immigrants from India, Sri Lanka, Nepal, and Pakistan, then concentrating on Muslims from the Subcontinent and finally launching as a brand in the UK, where it is now growing overseas. Another example is the Indian consumer goods company Dabur that is growing outside India by serving the needs of an expansive Indian diaspora community. It has created a customer segment that spans South Asia and the Middle East by using Bollywood star-based advertising as well as building on similarities in personal care product preferences. It has also made its way into developed markets like the UK and the U.S., replacing the Bollywood strategy, which would not resonate in the West, with an all-natural products strategy. (Source: HBR)