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Entrepreneurship, Migration and The ‘Expat’ Label in Southeast Asia

Man walks up a hill

Since the end of the Vietnam War there has been an ongoing reverse migration of Westerners to Southeast Asia.

In the quest for lower living costs, warm climates and a share of the local tourism market, Southeast Asia has become a hub for digital nomads, wanderers and expatriates seeking to bootstrap scalable startups.

Migration has and continues to affect all nations and cultures. Although the topic has been used to endorse what it seems like a global xenophobic movement, evidence shows that immigration is almost always a good thing for the economy.

Some argue that immigrants steal jobs, drain taxpayers and threatens indigenous cultures. Others say immigration boosts economic growth, provides specialist skills and expertise and creates more dynamic societies.

But we as expatriates are immigrants too and ultimately it should not be up to us to determine if we are actually contributing to the development of the region. If people in the western world can get away with running anti-immigration campaigns, what makes us think we are safe from the same shame?

The seemingly never-ending dichotomy: Expat vs. Immigrant

Southeast Asia expat label

The term ‘expat’ is no more than a refined way to call immigrants of certain social class, country of origin and economic status. According to Internations, the term is “generally used to refer to people who temporarily or permanently live in a different country than the one they were born in or whose nationality they have.”

According to this definition I should have been an expat during the 3 years I spent in Australia doing my master’s degree and contributing thousands of dollars to the Australian education sector.

However I was not, neither were all the overseas students that in total contributed over US$ 13 billion in 2014 to the Australian economy.  Whether or not we wanted to stay and regardless of making international education Australia’s third largest export, we were immigrants.

That status changed in Southeast Asia and without knowing it I became an ‘expat’, whatever that meant.

Stamp next to two passports

Interestingly enough, this is a reality that occurs all over the world. Christopher DeWolf in his article for The Wall Street Journal “In Hong Kong, Just Who is an Expat Anyway?concludes:

“Some arrivals are described as expats; others as immigrants; and some simply as migrants. It depends on social class, country of origin and economic status. It’s strange to hear some people in Hong Kong described as expats, but not others. Anyone with roots in a western country is considered an expat … Filipino domestic helpers are just guests, even if they’ve been here for decades. Mandarin-speaking mainland Chinese are rarely regarded as expats … It’s a double standard woven into official policy.”

Similarly Mawuna Koutonin, an African activist and author explained in his controversial article for The Guardian “Why are white people expats when the rest of us are immigrants?” that top African professionals working in Europe are not considered expats. When interviewed, an African migrant worker declared:

“I work for multinational organisations both in the private and public sectors. And being black or coloured doesn’t gain me the term “expat”. I’m a highly qualified immigrant, as they call me, to be politically correct,”

Southeast Asia, a fertile ground for startups?

Danang's Skyline at night in Vietnam

Many places in Southeast Asia are still catching up on new technologies and business models. Sam Marks, an entrepreneur and angel investor, explains in an interview for Forbes

“It’s easier to bootstrap in Asia than any place in the world […] Expat entrepreneurs have a huge benefit of expertise and knowledge when it comes to creating online products and services, although any offering must be tailored to local markets”

Although it is true that there are many benefits and opportunities for migrant entrepreneurs and business owners operating in Southeast Asia, they also face many challenges.

Many people also seek a lifestyle of flexibility, travel and independence without realising the amount of work and dedication that goes into earning a lifestyle like that. As Casey Hynes explains in her article Ultimately, much of the hard work falls on the shoulders of the entrepreneurs behind these startups, rather than outsourced teams”

The low cost of living in some parts of Southeast Asia can be a double-edged sword for new startups. Entrepreneurs can become complacent without the urgency to pay big bills. The desire for growth and success, the need to spend the entire day working on a business model and to outperform the competition can gradually fade.

“Literally everyone who lives here falls into it at some point […] A lot of companies here have too small of a vision or they’re not ambitious enough,” 

Sam Marks about Chiang Mai.

Workplace dynamics

Pedestrian walking around in Ho Chi Minh

Cultural understanding and local networking has become a priority for successful entrepreneurs and business owners in Southeast Asia. In a region where relationships are highly valued, the ‘colonialist-minded expat’ is likely to struggle at some point.

Two of the employment related socio-economic diseases of the region are the dual salary system and the common mistreatment of employers towards local staff.

In an article published earlier this year by The Guardian, a survey of 1,300 local and expat workers living in lower-income countries found a wage gap that ranges from 400% to 900%.

Expats often assume dual salary systems are not an issue. However these disparities generate significant feelings of workplace injustice among local workers.

As a consequence they feel less valued than their expatriate counterparts. There is no need to hire a specialist in cross-cultural management to understand how bad this can be for employee performance.

Nevertheless, when it comes to justifying weaknesses in business plans and operational models, it is quite common to hear that getting ‘the right staff’ is extremely difficult in the region.

For a lot of business owners, it is factually impossible that these weaknesses could come from the wrong management approach or recruitment process. Nor a lack of understanding for the cultural environment, effective cross cultural communication practices or the absence of appropriate incentives.

That said, there are a large number of companies and tourism-related businesses that are shaping the future of a globalised business environment in Southeast Asia. Nowadays many companies in Southeast Asia implement sustainable employee engagement frameworks, offer competitive wages, appropriate training and benefits packages for their local employees.  

Perhaps these companies are where all ‘the right staff’ went.

Robert Rueda

Marketing Consultant and Freelancer

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