Circular Migration and Entrepreneurship in the Western Balkans: From Brain Drain to Innovation Potential

Abstract

This paper examines how circular migration can support entrepreneurship and innovation in the Western Balkans, using Albania as the principal analytical reference point. Migration in the region is usually framed as brain drain, yet that framing captures only one side of the relationship between mobility and development. Migrants and returnees may also accumulate skills, savings, market knowledge, work discipline, and transnational networks that can be mobilized for new venture creation, small-firm upgrading, and international market access. The paper argues that entrepreneurship is the critical mediating mechanism between migration and development: mobility-generated assets only become productive when they are translated into business formation, SME upgrading, innovation adoption, and export-oriented activity. The study is conceptual and exploratory. It draws on academic literature on brain circulation, transnational entrepreneurship, return migration, and entrepreneurial ecosystems, and combines this with desk-based analysis of recent official data and policy material from Albania. The empirical context is important. Recent official evidence indicates that Albania has around 1.6 million citizens abroad, that 37 percent of Albanian households include a current or returned migrant, that 108,503 Albanians returned over the previous 12 years including 25,595 in 2023, and that personal remittances equaled 8.4 percent of GDP in 2024. At the same time, only 23.8 percent of individuals report basic or above-basic digital skills, even though roughly 95 percent of public services are available online. The paper’s main finding is that circular migration clearly generates entrepreneurial resources, but these resources are only partially converted into innovation and growth because migration policy, SME support, digital capability, and export promotion remain weakly aligned. The paper contributes by integrating migration studies with ecosystem thinking, by grounding the discussion in stronger official evidence, and by proposing a concise conceptual framework through which entrepreneurship mediates the relationship between circular migration and development.