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The global fight to attract foreign entrepreneurs

Posted on March 5, 2015
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Meet Fujia Chen, the Chinese aeronautical engineer who the UK government hopes will grow a successful business.

And say hello to Simon Papineau, the Canadian whose software company the Chilean authorities would very much like to see expand and prosper.

While it may at first seem odd that national governments are cheering for foreign entrepreneurs, it is in fact a growing trend.

For in the increasingly competitive global economy, a rising number of countries are trying to poach talented young businessmen and women from overseas, encouraging them to set up shop in their nations instead.

The hope is that the businesses in question will then grow, creating employment, wealth and tax revenues in the host country.

Start-up Chile enabled us to go from a small struggling start-up, to one that could start growing”

Such targeting of young entrepreneurial talent is the type of focused immigration that mainstream political parties agree upon. It is a world apart from the rows and concerns about levels of mass immigration.

Therefore, such government-backed schemes as Start-up Chile, and the UK’s Sirius programme, invite overseas entrepreneurs, typically recent university graduates, to apply for a limited number of places each year.

Successful applicants are then given living expenses, work visas, free office accommodation, mentor support, and access to potential investors for 12 months or so.

After this time the hope is that the start-ups can stand on their own feet, and with visas extended, remain in that country.

Satellite technology

Ms Chen and her German business partner Julian Jantke, both 30, are part of their current, second crop of 60 participant Sirius start-ups.

Oxford Space Structures' travel cot
The travel cot opens and closes in seconds

After meeting while studying at Oxford University, they are now developing consumer products made using patents licensed to them by the European Space Agency (ESA), which has also financially supported their start-up – Oxford Space Structures.

While Ms Chen looks after the engineering, Mr Jantke handles the day-to-day running of their business. Both are getting £1,100 a month for a year from Sirius to help cover their living expenses.

Their first product, a lightweight travel cot which opens and closes in seconds, is set to go on sale in the summer. It uses the same technology by which ESA satellites open out after they have been launched into orbit.

Now based in London, Ms Chen, who originates from Shanghai, says it would have been very difficult for her to have tried to launch the business in China.

“In China, setting up a company is very bureaucratic… and requires a lot of capital. It is not something that a normal student would be able to do,” she says.

“Also in China, it is much more difficult to have access to the capital markets unless you are very well connected – in the UK it is much easier.”

Mr Jantke, adds that despite the strength of the German economy, and particularly its manufacturing sector, it is easier for start-ups in the UK to access investment.

The company, which was only set up last summer, has so far raised £150,000 of funding.

While it will get the cot manufactured in China, Ms Chen says that the firm’s headquarters and design base will remain firmly in the UK. And additional manufacturing in the UK may follow in the future.

Chile’s efforts

More than 7,000 miles away in the Chilean capital Santiago, Start-up Chile is now in its fifth year.

Young entrepreneurs at Start-up Chile
Start-up Chile attracts young entrepreneurs from around the world

It was set up by the Chilean government to attract young entrepreneurs from around the world, with the hope that it would have the knock-on impact of boosting entrepreneurship among young Chileans.

More than 1,000 start-up businesses from around the world have now participated in the scheme. Each is given a grant of $40,000 (£26,055), and a one-year visa to develop their business in Chile.

Canadian entrepreneur Simon Papineau, 31, heard about the scheme when he was working in Argentina, and successfully applied back in 2012.

Simon Papineau
Simon Papineau now divides his time between Canada and Chile

His software testing company Crowdsourced Testing now has sister officers in Montreal and Santiago, and he divides his time between the two locations.

“Start-up Chile enabled us to go from a small struggling, start-up to one that could start growing,” says Mr Papineau.

Hey Success is a global listings page for students

“It was great for me because in Quebec, where I’m from, the government is very interested in helping big companies, but not so much start-ups like mine.

“And the language barrier [at Start-up Chile] wasn’t a problem at all. I can speak a little Spanish, but the majority, I’d say 70% of participants, can’t speak any Spanish when they arrive.”

Language issue

Yet despite the efforts of governments, sometimes foreign entrepreneurs just don’t want to stay in that country.

Australian Jake Tyler and Canadian Nat Cartwright met while both doing a master of business administration (MBA) course in the Spanish capital Madrid, when they came up with the idea for their mobile payments business Payso.

Jake Tyler and Nat Cartwright Jake Tyler and Nat Cartwright turned down a chance to stay in Spain

They were offered start-up visas to launch the company in Spain, but instead chose to move to Ms Cartwright’s hometown of Vancouver.

Mr Tyler, 32, says: “Spain is a very difficult place to start a business… there is very high unemployment, it doesn’t have a huge amount of financing options, and it is a difficult place to operate if you don’t speak very good Spanish.

“[By contrast], Canada is a very attractive market for us, we are growing our business out here. Canada in terms of access to banking is very well regarded, and we are next to the US.”

Igor (left) and Milenko Pilic
Igor (left) and Milenko Pilic have come to the UK from Serbia to start their company

Back in the UK, Serbian brothers Igor and Milenko Pilic are using the help of Sirius – which is run by UK Trade & Investment – to launch their website Hey Success, which lists global opportunities for students, such as scholarships, events, grants and competitions.

Milenko Pilic, 27, says: “It would have been impossible for us to launch the business in Serbia. Being in the UK gives us a global profile, and access to finance. We are here for good.”

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