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City mattersCompetitiveness, cohesion and urban governance$

Martin Boddy and Michael Parkinson

Print publication date: 2004

Print ISBN-13: 9781861344458

Published to Policy Press Scholarship Online: March 2012

DOI: 10.1332/policypress/9781861344458.001.0001

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Ethnic minority enterprise in an inner-city context: the case of the independent restaurant sector in Birmingham

Ethnic minority enterprise in an inner-city context: the case of the independent restaurant sector in Birmingham

Chapter:
(p.306) (p.307) Seventeen Ethnic minority enterprise in an inner-city context: the case of the independent restaurant sector in Birmingham
Source:
City matters
Author(s):

Trevor Jones

Monder Ram

Tahir Abbas

Publisher:
Policy Press
DOI:10.1332/policypress/9781861344458.003.0017

Abstract and Keywords

This chapter examines ethnic-minority enterprises in inner cities in England, focusing on the independent restaurant sector in Birmingham. It discusses the salient theoretical and empirical issues in the field of ethnic-minority entrepreneurship, and addresses the problem of market saturation, which is the most important problem faced by restaurateurs in the Balti Quarter. The chapter describes the strategies for breaking free from the economic trajectory of the sector and evaluates the relevance of existing policy approaches towards ethnic-minority entrepreneurs.

Keywords:   ethnic-minority enterprises, inner cities, England, restaurant sector, market saturation, economic trajectory

Introduction

Government, government agencies and economic development bodies have frequently seen the role of small businesses, enterprise and self-employment as a key element of competitive strength both nationally and at local and regional scales. Enterprise and self-employment has been seen as particularly relevant in addressing the particular barriers to work and economic well-being faced by ethnic minorities (Cabinet Office Strategy Unit, 2003). This has more general relevance to the competitive strength of core urban areas, given the scale and concentration of people from ethnic minorities in such areas.

While entrepreneurial self-employment is already a conspicuous feature of the economic position of Britain’s ethnic minorities, this is heavily concentrated within marginal business sectors such as corner shop retailing, catering and clothing manufacture, all of which are subject to intense competition. Of these activities, catering enjoys by far the most promising market potential, based as it is on the appeal of a specialised ethnic product to a wider market. Indeed, the ‘ethnic’ restaurant industry is currently one of Britain’s fastest growing service sectors (Mintel, 1999) although, somewhat perversely as we shall see, this does not guarantee rich pickings for all its participants. This raises particular issues in relation to cohesion and exclusion alongside issues of competitiveness.

In this chapter, we focus on ethnic restaurants in Birmingham, a city renowned for an intense inner-city cluster of South Asian curry houses with its own distinctive brand name – the ‘Balti Quarter’. This striking spatial agglomeration both expresses and influences the struggles for entrepreneurial survival, which characterise the South Asian restaurant sector. On the one hand, restaurateurs profit in this instance from membership of a high-profile cluster, whose name is widely familiar throughout and beyond the city, a veritable magnet for a growing mass of middle-class ‘omniverous diners’ seeking the authentic ethnic (p.308) culinary experience (Warde et al, 1999). At the same time, the perceived benefits of this location have attracted a surfeit of restaurateurs, with supply outlets outrunning even a rapid expansion of demand, leading to serious over-competition and unviable returns for many of these businesses (Ram et al, 2002). Of interest here also are the implications that spatially concentrated business activity has for urban policy makers. Seeking ways of rebranding their city, they can sometimes exploit a successful ‘cultural industry’ without necessarily considering the wider implications of their actions for local economy and society.

This chapter opens with a discussion of the salient theoretical and empirical issues in the field of ethnic minority entrepreneurship, where there are sharply opposed views on the causes and implications of the phenomenon. The aims of the study and the issues explored are then elaborated upon, highlighting the importance of the qualitative methodological framework and the spatial and sectoral context in which the study is situated. We then discuss a range of findings, many of which go against the grain of received wisdom in the field. First, we address the problem of market saturation, by far the most important problem faced by restaurateurs in the Balti Quarter, where the struggle to attract custom has forced extreme price- and cost-cutting practices on many. Second, we examine entrepreneurs’ strategies to break out of these constraints and the ways in which fast-track ethnic minority entrepreneurs are able to capitalise on the demand for upmarket restaurants. Third, we spotlight the ways in which such development impinges on the business family, customarily portrayed as the minority business owner’s decisive advantage but placed under considerable strain by the kind of change and modernisation demanded by ‘breakout’. Related to this is the question of how far family members and other co-ethnic workers in ethnic minority firms use the skills, knowledge and experience gained in order to start their own business ventures. The prevailing assumption that this is one of the predominant means by which the ethnic minority business economy reproduces itself, is an assumption not in fact upheld here. Finally, we assess the relevance of existing policy approaches towards ethnic minority entrepreneurs.

Ethnic entrepreneurship: universalistic versus particularistic explanations

Since the first systematic study of ethnic enterprise three decades ago (Light, 1972), researchers have grappled with the seemingly intractable question of how disadvantaged racialised minorities such as Chinese in the US or Pakistanis in the UK can occupy such an apparently enviable position in the field of business ownership. In the case of South Asians in Britain, we are confronted with a migrant-origin group who have positioned themselves at the forefront of the post-Fordist ‘entrepreneurial revolution’, with a self-employment rate one and a half times that of the general population by the early 1990s (Ram and Jones, 1998). The enormity of this strikes home when we remind ourselves (p.309) that these communities originated as immigrant workers entering the very bottom of the British economy as replacement workers, victims both of racist discrimination and of the job cuts subsequently wrought by deindustrialisation (Brah, 1996).

Prominent among the explanatory theories constructed to explain these contradictions is the ‘cultural resources’ perspective (Metcalf et al, 1996), which argues that the cultural attributes of some (but by no means all) ethnic minorities can, Midas-like, transform dross into gold. According to Metcalf et al (1996, p 7), “minorities may be vulnerable and oppressed, but they can create resources that offset the harshness of the environment they encounter”. Recently, it has been recognised that economic activity is firmly grounded in social networks and the term social capital has been coined to describe “the resources that are available to a person through his or her social relations with others” (Flap et al, 2000, p 147). Since many migrant-origin communities tend to comprise cohesive, mutually loyal networks centred on shared ethnic identity, it may readily be argued that their entrepreneurs enjoy superior access to social capital and hence an actual advantage over non-members of their group. Immediately applicable to British South Asians, the argument would be that their entrepreneurialism derives its competitive strength from ready access to familial and communal sources of low-cost, loyal, flexible labour, pooled savings, customer loyalty, shared information and all manner of insider supply linkages (Werbner, 1990; Metcalf et al, 1996).

Persuasive as it may be as a neat resolution of an otherwise paradoxical situation, this culturalist paradigm has never held unchallenged sway, presented as it is in a historical, geographical and socio-economic vacuum. How can it be that the Calvinist Methodism of yesterday is the new Sikhism/Hinduism/ Islam? Not surprisingly, then, this one-dimensional insistence on ethno-cultural particularism has been subject to a constant critique from those who, in the interests of a common humanity, regard it as reductionist. They instead prioritise the essentially hostile external context of racism and capitalist market forces in which the ethnic minorities must perforce operate (Aldrich et al, 1981; Jones et al, 1992, 1994, 2000; Ram, 1992, 1994). More recently, growing weight has been accorded to the notion of ‘mixed embeddedness’ (Kloosterman and Rath, 1999), which insists on viewing such entrepreneurs as being essentially grounded in the larger political-economy as well as in their own communal social capital. For the most part, writers of this school insist on contextualising these entrepreneurs in terms of their economic, political, institutional and spatial environment, which sets the ultimate parameters within which they must operate (Freeman and Ogelman, 2000; Jones et al, 2000; Rath and Kloosterman, 2000). While it is vital to accord due analytical significance to the ethnic community and the entrepreneurial social capital it undoubtedly unlocks, it is equally vital to avoid presenting this as a self-encapsulated state, which somehow immunises its participants from the tribulations of membership of a universal entrepreneurial community (Ram et al, 2000).

(p.310) Research design, aims and methodology

The research approach explicitly acknowledges Rath and Kloosterman’s (2000) insistence that ethnic minority businesses must be seen as economically as well as socially embedded. In this perspective, business outcomes are seen as shaped by the strategies employed by individual entrepreneurs, and the deployment of resources in relation to market potential, both actual and latent. Vital here is the question of whether business owners adopt a proactive approach to maximising their position in the market or a passive ‘survivalist’ stance (Blackburn et al, 1990). We also pay explicit attention to the comparative dimension by including African-Caribbean and white firms as well as Indians, Bangladeshis and Pakistanis, thereby avoiding the pitfall of explaining certain characteristics as specifically ‘ethnic’, when they are in reality economic, and broadly common to all small independent restaurant operators.

In addition to its explicit sectoral focus, the present study is also distinct in addressing the experiences of growing and developing firms, using as a framework the concept of ‘breakout’ (Ram and Hillin, 1991). This term was introduced to underline the need for ethnic minority firms to escape from their incarceration within narrow and highly competitive market segments into more lucrative markets. Here, a key argument is that the success of such a transition is contingent upon the availability of human and financial capital and other ‘class resources’ (Light and Bonacich, 1988): firms can no longer rely principally upon the informal social capital of family and co-ethnic workers if they are to achieve breakout.

The city of Birmingham, with its large diverse ethnic minority population, provides a particularly apt setting. Based on the 1991 Census, Bangladeshis comprise 6.2% of the city’s population, African-Caribbean 1.3%, Indians 5.3%, and Pakistanis 6.9% (BEIC, 1993). These figures reflect the settlement of numerous migrant groups in Birmingham in the post-war era (Back and Solomos, 1992), giving rise to heavily segregated clusters in different parts of the city. Thus, “Sparkbrook became a largely Pakistani area, Handsworth became the Caribbean centre of Birmingham, alongside the Soho area which was overwhelmingly Indian” (Rex, 1987, p 104). It is also historically significant as the venue for the infamous Enoch Powell ‘Rivers of blood’ speech in 1968 and, as Back and Solomos (1992, p 329) observe, the city has been seen as an important “test case for the future of race relations in British society”.

Qualitative interviews were conducted with owners and workers in 37 restaurants (eight Bangladeshi; eight Pakistani; eight white; seven Indian; and six African-Caribbean). The business owner was interviewed on at least two occasions and, in the majority of cases, it was possible to interview other family members who were directly involved in the case of family businesses. Typically, this would be the spouse of the usually male owner of the restaurant, who would often be involved in paid employment outside of the restaurant. In the case of South Asian Muslims, owners’ wives rarely had any direct involvement in the restaurant (although they performed key tasks in the domestic sphere (p.311) that helped to maintain the ethnic micro-business household) and hence it was not possible to interview these women. A number of male family members, however, who were often involved in the South Asian restaurants – brothers, uncles and cousins (blood relatives) – were interviewed. In addition, interviews were undertaken with at least one worker in each firm (more, in many cases). During the course of the interviews with owners and workers, many wide-ranging issues were discussed. For the purposes of this chapter, however, the emphasis is upon three issues:

  • market limitations and strategies for breakout;

  • labour market practices and the role of the family;

  • the politico-institutional, regulatory environment.

Market saturation

Turning now to the findings from these interviews, we begin with a review of the market environment, in many senses the fountainhead from which all else flows. Undoubtedly the principal limitation on the performance and development of restaurateurs of all ethnic origins in Birmingham is the size and nature of the customer base, a limitation operating with particular severity on South Asians in the Balti Quarter where there are around 60 curry houses (UCECS, 1998). Throughout the interviews, one of the recurring complaints was the intense competitiveness of the trade, stemming from the excessive number of outlets in relation to the market – actual and potential. Indeed, more than one South Asian respondent forecast an eventual decline in what has up to now been a highly expansionary sector, since a large number of restaurants were operating below viable margins. In the South Asian case, the industry has in a sense become the victim of its own initial success, with the invention of ‘Balti’ food, a novel style of presentation which gave Birmingham’s curry houses a national reputation in the 1980s. Initially successful in attracting white custom from a very wide radius, the Balti trade was an even greater magnet for entrepreneurs, thus bringing about the current surplus of supply outlets over demand, with restaurateurs engaging in destructive price competition in a struggle for a viable share of an inadequate (and, according to one respondent, ‘fickle’) customer base. While the catering trade has presented South Asian entrepreneurs with an excellent opportunity to address a wide market beyond the bounds of their own community, this has proved insufficient to accommodate the explosive growth in numbers of those seeking to supply it. Non-South Asians, too, are frequently placed in similar difficulties with customer recruitment, with ‘English’ restaurants struggling to establish a definite and recognised identity for their cuisine; and African-Caribbeans often trapped in low-income, inner-city areas.

(p.312) Among restaurateurs in the Balti Quarter, extreme price-cutting is the common response to hyper-competition, a highly self-destructive and short-termist strategy, as acknowledged by one of the Pakistani proprietors interviewed:

Well there are just too many people. So what they do, they put their prices down, so they kill the market. You know, they have got 20% off or 50% off, you buy one and get one free, it’s just killing the market.

In a similar vein, a neighbouring Indian owner declares, “Sometimes it’s better to close up and stay at home” (Ram et al, 2002, p 27).

Not surprisingly in view of such hostile market conditions, Balti firms tend to be characterised by low aspirations, being oriented towards basic survival rather than profit-maximisation. Consistent with this, the notion of ‘success’ is evaluated in an extremely modest way, a typical response being “If you can pay the bills and make a living, that’s it, that’s success”. Here we note that such modest independent survivalism is actually much more representative of small business culture than are the go-getters discussed in the following section. Independence rather than material gain has always been the small entrepreneur’s cardinal motivation (Bechofer and Elliott, 1978; Storey, 1994), an orientation completely unaffected by ethno-cultural identity. Indeed the most explicit proponent of these values among our interviewees is actually a white restaurateur for whom “Success has never meant growth and I’ve never wanted to be a millionaire; it’s just having a restaurant with customers who enjoy coming here”.

Alongside the survivalists, the present sample also contains numerous intensely proactive operators not content with passive coasting on the edge of survival. In Ram and Hillin’s (1991) original concept of breakout, the emphasis was on the need for ethnic minority firms to shift into higher-order sectors of the economy but the present respondents demonstrate the alternative possibility of repositioning within an existing sector so as to take better advantage of its potential. At the broadest level, our respondents’ common strategy is designed to distinguish themselves from competitors and create an individual niche for themselves. We are able to identify four broad variations on this theme.

Product differentiation

Given its essential creativity, the restaurant trade offers obvious scope for any individual firm to blunt the hard edge of competition by promoting its own uniqueness. Creating a personal monopoly by doing something no one else does is perhaps the surest way to flourish in a hyper-competitive market. In a trade based in the most literal sense on catering to consumer taste, the most obvious strategy for winning and retaining custom is to create a unique style and content of cuisine, and several of our South Asian respondents have taken a conscious decision to stand apart from the dominant undifferentiated Balti cuisine. One Indian owner plumped for ‘traditional Punjabi’ cuisine and goes (p.313) so far as to prepare meals to customers’ specifications when requested. Another South Asian respondent defined the personal market niche thus: “I don’t copy other people, so I don’t regard anybody as my competitor at all”. This approach had also been followed by one of the African-Caribbean owners who offered ‘authentic Jamaican food with live entertainment’, while a white restaurateur claimed to serve food ‘unique to this restaurant’. This last owner also emphasised customer care as part and parcel of this approach: “We spend more time socialising with the diners than we do cooking for them”. A key feature of this group, this approach enabled proprietors to become aware of changing customer preferences and adjust their service accordingly.

Upmarket shift

While the above strategy is well designed to cultivate a loyal core of customers and to maximise the owner’s own job satisfaction, it is not necessarily consistent with fast-growth money-making. More oriented in this direction area are those whose strategy is based on a shift towards high-quality food in expensive surroundings tapping into customers prepared to pay a premium price. Among our sample this was best exemplified by the Indian owner of ‘a very high class restaurant’, the culmination of two decades of restaurant ownership, with accumulated profits ploughed back into constant growth. This was a capital-intensive and highly professionalised venture undertaken by an unusually well resourced individual, with a business family background and a business studies degree. As such it was well beyond the reach of the mass of capital-starved ethnic minority entrepreneurs.

Portfolio breakout

Much the same applies to this strategy, the acquisition of multiple outlets and/ or additional activities supplementing the core business (13 employers owned more than one business). Representative of this approach is a Bangladeshi owner-manager who held partnerships in several restaurants dotted across the West Midlands, while retaining sole ownership of his headquarters business in inner Birmingham. What sets him apart from the average is his early start in the 1970s and a long-term policy of accumulating capital by selling businesses as going concerns to new entrants, a strategy not open to newcomers with few resources. A cheaper version of this diversification strategy was adopted by a Pakistani eatery, which has developed a supplementary line supplying other restaurants with starters. Unhappily, this is a very labour-intensive undertaking, and effectively traps the entrepreneur in the very situation from which breakout is supposed to be an escape.

(p.314) Locational breakout

Recently Rekers and van Kempen (2000) have made a convincing case for according greater analytical priority to the spatial context of minority ethnic enterprise. As a consumer service, restaurant catering is a classic example of a locationally sensitive activity, whose outlets need to be positioned strategically in relation to the uneven distribution of market potential within the city. Certainly our own respondents appear conscious of this factor, being for the most part strategically rather than randomly located. One potentially rewarding strategy is to locate within an agglomeration of similar businesses, whose reputation guarantees pulling power over a wide radius. In effect, businesses benefit from collective economies of scale. Thus, a concentrated swarm of Balti houses has beneficial cluster effects because, as one of our Pakistani respondents notes, “You are getting more people into the area and picking up passing trade”. Indeed, more than one of the interviewed owners mentioned customers attracted from as far as Wales and North West England, a truly impressive travel-to-eat hinterland. Given Birmingham’s current policy of rebranding itself as a multicultural city of spectacle and leisure, we would anticipate a further boost in this direction from tourists and other visitors, especially if the Balti Quarter is assiduously promoted as a cultural and leisure experience.

However, as we have seen earlier in this chapter, such spatial niches are finite and beyond a certain point diminishing returns set in. Spoilt for choice, diners tend to flit in fickle fashion from one Balti house to another, with several owners complaining about what they see as a lack of customer loyalty. Not surprisingly, then, several of the most commercially successful firms in the sample are those who have consciously (re)located in potentially rewarding areas such as affluent residential suburbs and city-centre spaces. Two of our Indian respondents are lucratively established in Birmingham city centre, profiting from their role as part of the general night-out experience. Others, like the successful owner ensconced in leafy Solihull have opted to put literal distance between themselves and the competition by tapping into a high-income local market. In a market where the principal competitive threat stems from fellow South Asians, the benefits of being the only – or even the first – curry house are inestimable.

Despite the success of these breakout firms, we nevertheless need to face the reality that these strategies are a strictly rationed option, open only to an elite minority. With the exception of product differentiation, all these approaches are necessarily capital-intensive, in some instances extremely so, given the expense of acquiring and equipping premises in prime locations. Bearing in mind that access to adequate financing is a perennial problem for ethnic minorities, with recurrent complaints about the stickiness of bank funding (Deakins et al, 1994; Ram et al, 2002), such strategies are beyond the means of the average South Asian or African-Caribbean entrepreneur. Certainly the scale of investment required – comfortably into six figures for several respondents – places it well (p.315) beyond the range of the family and community social capital on which ethnic entrepreneurs supposedly depend. What we are now witnessing here is a quantum shift in scale and modus operandi, one that switches the onus gradually away from informal resources and on to mainstream market sources of labour and capital. In effect, market breakout also entails a degree of breakout from dependence on the family, a change that will become evident in the following section.

Labour market practices, family and co-ethnic labour

Let us now turn our attention to the ways in which the role of the business family and of co-ethnic employees has both influenced and been affected by these strategies. Advantageous access to labour power from family and community has been seen as a key element in ethnic small business, with the entrepreneur’s family accorded critical importance as a business resource (Werbner, 1990; Barrett et al, 1996; Sanders and Nee, 1996; Ram and Jones, 1998). From the very outset, the family has been presented as the primary source of the rich social and economic capital, which so benefits the ethnic minority business owner. Usefully summarised by Sanders and Nee (1996), the argument states that immigrant-origin entrepreneurs gain decisive advantages from their embeddedness in the large, extended, often patriarchal families typical of their cultural traditions. For most writers, the key element in the family firm is trust, which not only helps to ensure a ready supply of low-cost willing labour and of pooled savings (Werbner, 1990) but also eliminates the capital versus labour antagonism typical of pure capitalist organisations. Extending this logic, many accounts present the ethnic business family as essentially harmonious, cemented together by the mutual reciprocity and stakeholder status of all its members. Essentially the family is the business and vice versa (Baines and Wheelock, 1998).

Although change is very definitely afoot, we would stress that the involvement of family members continues in almost all of the minority ethnic firms interviewed in the present study and in some cases remains absolutely crucial. It is also the case, however, that its role assumes its greatest importance among the survivalist firms, whose social relations come closest to those customarily depicted for ethnic catering (see Bailey, 1987; Parker, 1994). Labour power is the key resource supplied here, with many of these entrepreneurs enjoying contributions from spouses, siblings, older children, cousins and other blood relatives. As well as sheer weight of numbers, family members were qualitatively distinguished, tending to occupy senior positions, with routine paid jobs more often filled by fellow Asian non-family members.

In such key positions of responsibility, where the incumbent’s reliability needs to be automatically assumed, the trust factor assumes maximum potency. Following from Weidenbaum’s (1996) observation that few workers beyond the blood relative circle can inspire such trust levels, it is hardly surprising that the tendency to keep managerial functions within the family dies hard. Indeed, (p.316) in the present sample, this practice continues even in some of the most progressive breakout firms, with one multiple outlet proprietor using mainly relatives to manage his five eateries.

Apart from management, however, most firms are obliged to recruit beyond family boundaries. Exceptions to this are one or two unusually large families, such as the Bangladeshi restaurant where the availability of four adult sons obviates the need to farm out any full-time jobs beyond the family circle. This is not the general rule, however. Even among the survivalists, the nature of the catering trade with its division of labour between manager, chefs, waiters and kitchen hands makes it necessary for recruitment beyond the family circle. In the South Asian firms, this takes the form of co-ethnic workers recruited through informal word-of-mouth networks, where recommendation, personal acquaintance and reputation take the place of formal credentials and references. Once again we see trust playing a key role here.

Although so often presented as some kind of unique South Asian cultural trait, family labour power turns out to be a vital ingredient among other groups too. Striking here was the woman proprietor of a Caribbean restaurant, whose start-up was only made possible by building work contributed by her brother and the culinary skills of her mother, thus belying the standard image of African-Caribbeans as bereft of social capital. Alongside this, one of the white restaurateurs declares that his long-term survival has been utterly dependent on his wife’s contributions and she herself notes that “The business requires me to put money in and help out to reduce the staff costs”. All this fits with Jones et al’s (1994) finding that many labour practices are common right across the ethnic spectrum, with informality and trust-based relationships emerging as shaped more by the exigencies of small entrepreneurialism than by cultural values.

Unproblematic as the restaurant labour process may appear, there is the potential for tensions. For example, a gendered division of labour was in evidence, particularly in the South Asian firms. Among our own respondents this took several forms: women’s unpaid work within the restaurant itself; women engaging in outside employment to supplement household income; or, that most gendered female role of all, responsibility for the domestic sphere, as was the case in almost all the South Asian Muslim firms. As well as its obvious child-rearing and housekeeping functions, this latter activity could involve cultivating links with other families and the wider co-ethnic community, networks which have been shown to be of benefit to business activity (Kibria, 1994). Here we see one instance of a very definite intra-Asian differentiation and Muslim–non-Muslim entrepreneurial contrasts have been remarked upon by several writers (Rafiq, 1992; Metcalf et al, 1996). In the present survey, Muslim owners tend to be unequivocal on this issue, as with the Bangladeshi respondent who maintained, “Most of the restaurateurs’ wives have never worked. This is common in the Bangladeshi community; we do not like our wives to work”. Whatever its cultural origins, this gendered division of labour is one in which women’s contributions tend to be invisible and unacknowledged, even (p.317) though they were absolutely critical to the viability of several of the surveyed firms.

Further possible clashes of interest also arise at the inter-generational level, where the evidence from our survey suggests that the involvement of second-generation South Asian family members cannot be regarded as an example of uncomplicated family collectivities at work. Rather, their presence was more a product of limited labour market choices, socialisation and power relations within the household. Revealing here is our interview with the son of a Pakistani owner, whose reluctance is palpable: “I wouldn’t say I wanted to work here; I was just told by my dad to come round and give it a try”. Similarly, the brother of a Pakistani owner speaks of being “obliged” to work as a chef for him.

For some, there is no doubt that restaurant employment acts as a last resort safety net or, as one Bangladeshi family member puts it, “The restaurant is for when you can’t do anything else”. In some instances, children wishing to escape from the comforting but confining womb of the family business have found themselves thwarted by lack of sufficient qualifications for satisfactory entry into the external labour market. Consequently what might appear as a positive vote for joining the family firm is frequently the result of labour market push – accompanied in some instances by parental arm-twisting.

The politico-institutional environment

So far, then, we have established a picture of ethnic minority restaurateurs and workers operating in a highly pressurised commercial environment, with various forces conspiring to drive the number of restaurants well beyond the support capacity of a fast growing but ultimately limited and unstable consumer demand. Yet, as Rath (2000) argues, the ethnic entrepreneurial environment is not composed purely of market forces but is influenced in all manner of ways (often unintended) by national and local state activity. Most immediate in the priorities of our own respondents are the effects of local planning practices and in particular the general relaxation in urban land-use controls instigated by the Thatcher administrations of the 1980s (McEvoy, 2000). Although this deregulation was philosophically consistent with the Thatcherite aim of releasing enterprise from bureaucratic bondage, it has actually subjected them to new competitive pressures. In firms in the Balti Quarter, for example, the readiness of the local authority to grant land-use change permission is widely blamed for encouraging the excessive numbers of restaurants that respondents see as their chief problem (UCECS, 1998):

It seems like you can just walk in and just do whatever you want. When we started up we had to wait months and months before we got the permission but nowadays you can just [get it]. But they should realise that there is not enough business to cover everybody, there is only a limited amount you can do…. Like this block, they could have given permission for a restaurant, for (p.318) a clothes shop … for any other retail business and they would have done better than have 20 restaurants saturated in one place, and it attracts people as well, to come for different things. People will only come here if they want a restaurant, if they are eating out or whatever, and that is the only kind of clientele you are going to get. (Sahid, owner/manager, Tandoori express, Pakistani)

Offsetting this is the role of business support agencies to assist small firms with funding, business planning and other problems. However, owners were usually very sceptical:

I did go to Business Link for advice, but I don’t think – they were just writing letters backwards and forwards, they came for a visit and Business Link said they didn’t know anything about it. I already know about it and I think it was just a waste of time. (Hussain, owner/manager, Desh Pardesh, Pakistani)

This scepticism is consistent with evidence suggesting that ethnic minority employers, particularly South Asians, do not use business services to the degree expected (Marlow, 1992).

Summary

This chapter has attempted to show how the competitive survival and development of ethnic restaurants is shaped by a combination of the market orientation of the enterprise, the deployment of family/community resources and the regulatory framework. Undoubtedly the most important general conclusion to emerge from our findings is that family/community resources do not operate in some kind of autonomous vacuum. While family and co-ethnic labour certainly does comprise an absolutely vital resource for many, success is more likely to stem from strategic market positioning than from labour-intensive working. In essence, our most dynamic, profitable businesses are those that have broken out in some way from the hyper-competitive markets, which typically bedevil ethnic restaurateurs (especially South Asians) in Birmingham. Unhappily, because successful breakout is usually a capital-intensive affair, it is open only to those with generous class resource endowments.

Although ethnic social capital must never be downplayed, a sense of proportion is necessary nevertheless. When we consider that small businesses are very small fish in a vast dangerous ocean, it comes as no real surprise that the ethnic business household is rarely able to dictate the terms of its own entrepreneurial activity. Important as the aspirations of the business family may be, the operation of the firm has to be seen more as a reaction to wider economic forces than as an autonomous process in its own right. Apart from this, the internal workings of the firm are riddled with their own (usually) hidden contradictions along generational, gender and status lines. Such contradictions become heightened (p.319) in breakout firms and all the signs are of a decreasing reliance on family social capital as part of a general thrust towards modernisation on the part of such enterprises.

In addition to their extreme exposure to naked market forces, our respondents see the regulatory environment as increasingly impinging upon them. At present, the problem of hyper-competition is widely perceived as being aggravated by under-regulation, a failure on the part of local planners to curb the excessive proliferation of Asian restaurants in the Balti Quarter. Although the classic forces of demand and supply ought, in the long run, to restore equilibrium, sensitive planning controls might be thought less painful than a bloody cull via market forces. The apparent detachment of business support agencies seems to have exacerbated this situation.

This emphasises the importance of improving the effectiveness of business support agencies including the Small Business Service. As the recent Cabinet Office report observed, what is needed is a strategy to deliver a service that is focused on and tailored to the needs of different ethnic minority groups and closer working relations with those institutions that are utilised by ethnic minority entrepreneurs (Cabinet Office Strategy Unit, 2003). Business Link operators should aim to overcome the specific barriers and problems faced by ethnic entrepreneurs and to set and meet targets to achieve this. As this study demonstrates, there is a clear need to re-engage business support agencies with ethnic entrepreneurs, particularly if they are to break out of the particular niche markets and competitive market forces within which they tend, currently, to be confined.

References

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