Diaspora economic engagement and innovation

Diaspora communities play a pivotal role in providing economic support to their countries of origin through various means such as remittances, investments, and grants, often surpassing the levels of international aid. These financial streams are essential for ensuring access to education, healthcare, and supporting local businesses, which, in turn, generate employment.

Recognizing the significant impact of diaspora economic engagement and support at community and household levels, DRC works to further maximize this impact by addressing the challenges to existing practices as they are felt by those involved – from within the diaspora and from the communities and households at the receiving end.

Diaspora business engagement

Diaspora entrepreneurs are supported to set up or invest in local businesses in their countries of origin, thereby promoting local job creation. This support includes training and coaching on entrepreneurship, national legislation and investment processes, as well as the sharing of best practices. Access to investment capital is facilitated through financial institutions in both the diaspora's country of residence and the country of origin. In fragile contexts, diaspora investment often represents a significant proportion of foreign investment, as other investors may prefer more stable economies. Different models of diaspora investment include individual investment, direct involvement in existing businesses, or organised group investment. 

DRC has observed varying degrees of success in diaspora business investment and engagement, as the skills, the local knowledge, or the local contacts and connections may not always be sufficient to ensure success in a business venture. However some larger investments turn out successful.

Diaspora economic engagement at community level

Diaspora financial support for community-led initiatives is widespread and an area of exploration for DRC. Engagement can include refining community processes for prioritising diaspora support and potentially matching diaspora contributions to local initiatives. Current (2024) activities around diaspora economic engagement and support are ongoing in Ethiopia, Lebanon, and  Mali. Diaspora groups, often organised through hometown associations or kinship lines, provide essential funding for local initiatives. Fundraising within diaspora communities supports emergency responses through cash transfers to trusted local partners and longer-term crisis support, including the construction of schools, boreholes and clinics.