Ethnic entrepreneurship as innovation1
Ethnic entrepreneurship as innovation1
Abstract and Keywords
This chapter is a result of the longstanding interest in three different approaches that rarely intersect or that rarely share a mutual interest. These approaches are: biography, entrepreneurship and innovation. The rationale why biographical research and entrepreneurial research have rarely engaged in an effort of interdisciplinary communication is easy to determine. Entrepreneurial research is a branch of business economics that specialises in the founding of new ventures and the problems of legitimisation that such ventures encounter as they seek to gain trust among possible stakeholders and business partners. These difficulties, summarised as ‘liability of the new’, put organisational issues related to strategies for overcoming the assumed liability of the new at the centre of business-oriented research. This elucidates why interest in the role of the person in the founding of new ventures is fading. Among the topics discussed herein include: biography and analyses of migrant entrepreneurship; innovation as redefinition of legitimate means and cultural values; innovation as a means to circumvent discrimination; and policy implications.
This chapter is a result of long-standing interest in three different research areas that rarely intersect or are even seen as of mutual interest: biography, entrepreneurship and innovation. The reasons why biographical research and entrepreneurial research have rarely engaged in an effort of interdisciplinary communication are easy to identify. Entrepreneurial research is a branch of business economics that specialises in the founding of new ventures, mainly small businesses (Gartner, 1985), and in particular the problems of legitimisation that such new ventures encounter as they seek to gain trust among potential stakeholders and business partners (Gartner, 1990; Gartner et al, 1992; Aldrich, 1999). These difficulties, which can be summarised as the ‘liability of the new’ (Stinchcombe, 1965) put organisational issues related to strategies for overcoming the assumed liability of the new at the centre of business-oriented research. This explains why interest in the role of the person in the founding of new ventures is fading (Aldrich, 1989).
Putting biography into analyses of migrant entrepreneurship
William Garnter (1989, p 47), writing from a business economics point of view, has criticised current entrepreneurial research, laconically stating that, “Who is an entrepreneur is the wrong question”. Such a position certainly does not reach out to what is the main assumption of biographical research, namely that a detailed knowledge of a person’s life history matters and gives researchers a privileged access to the type of life worlds in which reflexive social agents attempt to construct meaning, negotiate identity and choose appropriate strategies of adaptation (Alheit, 1994; Kupferberg, 1995; Horsdal, 1999). Knowing who the entrepreneur is, is far from irrelevant from the point of view of a biographical approach; indeed, it must be the starting point for any meaningful analysis of entrepreneurial phenomena (Kupferberg, 1998, 2002).
Interestingly, biographical research is not the only sub-discipline that entrepreneurial research has declared to be non grata. The same enmity or conspicuous indifference can be found, although for somewhat different reasons, among entrepreneurial researchers towards innovation research (Tidd et al, 1997). (p.74) This is strange, given that we dealing here with two different branches within business economics. There might be several possible reasons why this is the case, for example, academic specialisation aggravated by internal competition for limited resources (financial and social capital) or attempts to achieve a more favourable balance in terms of educational programmes and academic prestige (cultural and symbolic capital). Nevertheless, the main reason why entrepreneurial research has tended to marginalise the phenomenon of innovation – in spite of the fact that the most cited theorist on entrepreneurship, Joseph Schumpeter (1945), emphasised the dynamic aspects of entrepreneurship as an agent of change in the capitalist economy – seems to be the more or less unstated assumption that innovation and entrepreneurship are two different things and that they rarely, if ever, coexist. Indeed, Aldrich and Martinez (2002, p 41) argue that:
Strangely the same lack of interest in the personal motivations and innovative capacities of entrepreneurs has characterised the sub-field of entrepreneurial research that focuses on immigrant or ethnic entrepreneurship. Although this type of entrepreneurship has attracted sociologists for the most part, the traditional knowledge interests of sociologists into what motivates actors and the creative potentials of social agency have been virtually absent. The potentially innovative aspects of a structurally marginal position did indeed figure prominently among the pioneers of entrepreneurial research as well as immigrant entrepreneurship (Light and Karageoris, 1994; Martinelli, 1994; Portes and Rumbaut, 1996). However, this interest has gradually faded away. Current research on immigrant or ethnic entrepreneurship has more or less forgotten its intellectual roots and has abandoned what we have come to associate with sociological curiosity or imagination. Instead, it tends to take its point of departure in the same assumptions that enlighten the business economics point of view in entrepreneurial research that, as indicated earlier, emphasises imitation rather then innovation and reduces entrepreneurship to a question of the legitimisation of a new organisation.
Overestimating the innovating capacity and personal traits of entrepreneurs has hidden the major role of imitation in entrepreneurial processes. Evolutionary theory calls our attention to the numerically dominant role of reproducers, rather then innovators.
It is precisely these two hidden assumptions that inform current thinking on ethnic entrepreneurship, where the main problem faced is often described in terms of the ‘structural opportunity model’ (Waldinger et al, 2000). Here, the main suggestion is that immigrant entrepreneurs tend to imitate rather than innovate. The argument runs along the lines that the chances of an imitative business surviving are determined by the competitive situation in a particular area and restricted by the effect of overcrowding. For this reason, the personal motives of the immigrant entrepreneur are irrelevant and can be excluded in any analysis. In this respect at least, the difference between immigrant and (p.75) non-immigrant entrepreneurs disappears or becomes irrelevant as “the continuum from reproducer to innovator is defined by outcomes, not intentions” (Aldrich and Martinez, 2001, p 44).
This clearly behaviouristic view of entrepreneurs was introduced by William B. Glade in his seminal article ‘Approaches to a theory of entrepreneurial formation’ (Glade, 1967). Glade’s main hypothesis is that “structural or environmental features enter into the building of entrepreneurial theory on the demand side no less than on the supply side of the situational analysis, chiefly as conditions defining the potential opportunity structure” (1967, p 250). The behaviouristic type of explanation offered by the opportunity structure model, which today dominates sociological thinking on entrepreneurship (Thornton, 1992), can be illustrated by a review article by Aldrich and Waldinger (1990) on ethnicity and entrepreneurship. Of the article’s 22 pages (exclusive of references), 16 explore those factors that determine the structure of demand and supply of ethnic entrepreneurs; only two are dedicated to a discussion of the appropriate strategies for business success employing a behaviouristic view of agency that excludes motivation as a factor or sees personal motives as irrelevant. In this analysis, strategies are exclusively defined by what is objectively possible, seen from the point of view of demand versus supply.
Aldrich and Waldinger (1990, p 131) characterise the ethnic business sector as one where there is ‘intense competition’, leaving ethnic entrepreneurs four strategies:
Assuming that the demand side is numerically smaller than the supply side, Aldrich and Waldinger (1990, p 112) argue that imitation rather than innovation is to be expected:
(1) self-exploitation (2) expanding the business by moving forward or backward in the chain of production or by opening other shops (3) founding and supporting ethnic trade associations (4) cementing alliances to other families through marriages.
The main problem with this model is that it cannot account for the dynamic aspects of immigrant entrepreneurship (or entrepreneurship in general). Should immigrant entrepreneurship be seen as a kind of behaviour that is determined by structural factors such as supply and demand, how do we account for the fact that new actors enter the field at all? What could possibly motivate an immigrant to become an entrepreneur, given that the structure of opportunity gives him or her little chance to use entrepreneurship as a way to gain control over his or her own future? In order to account for this anomaly, some ethnic (p.76) entrepreneurship researchers have introduced the theory of ‘ethnic succession’ (Mars and Ward, 1984; Basu and Goswami, 1999). Basically, this theory argues that ethnic entrepreneurship allows for some degree of social mobility in the sense that successive waves of newcomers move into niches abandoned by more established minorities.
Rather than breaking new ground in products, process, or administrative form, most businesses simply replicate and reproduce old forms. Simple reproduction is especially likely in the retail and service sector, where most ethnic enterprises are founded. Risks, however are high.
Other theories emphasise the importance of ethnic networks as a compensating factor that might possibly increase the competitiveness of ethnic business in the sense that such networks function as social capital (Coleman, 1988). Ethnic networks give immigrant entrepreneurs access to cheap and loyal labour, a Gemeinschaft type of financial assistance, as well as tacit business knowledge from co-ethnics (Portes and Rumbaut, 1996). On the other hand, the same ethnic networks also create new constraints on ethnic businesses that further reduces the chances of immigrant entrepreneurs to change their lives (Rezaei, 2002).
What these and similar theories abstract from is the possibility that personal motivations are often the main capital of immigrants (see Chapter Four of this volume). Thus, Sowell, in his comparative investigation of immigrant groups (1996), found that such motivational factors as thrift, the willingness to work long hours and to accept hard work, and the general ability to postpone present consumption in favour of expected future rewards (including the social mobility of the next generation) have been widely underestimated as a crucial dimension in recent immigrant research. Regarding motivation as a particular kind of capital can thus help us better to account for the interesting social fact that immigrant groups have often been able to mobilise social and economic resources that remained hidden before migration.
A case in point would be immigrants from poor areas of the world such as Ireland, Italy, India and Poland who, according to Sowell, prospered in the countries they chose as new home lands.
Sowell found that motivational factors also explain why, for different reasons, some immigrant groups have done significantly better then other immigrant groups (the ‘overachievers’). Here the cases of Chinese and Jewish migrants are particularly interesting. In the case of Chinese entrepreneurs, a socially disembedding or ‘decoupling’ effect releasing normative duties to co-ethnics (Granovetter, 1995), combined with the experience of harsh discrimination, seems to have intensified a tendency to take entrepreneurial risks and to find innovative ways of doing business. For the Jews, the awareness of permanent vulnerability as a historically diaspora nation without a state of their own seems to have led to a heightened sensitivity and greater ability to adapt to shifting demands in unpredictable mass markets as well as a willingness to take extraordinary risks in order to achieve social recognition and prove one’s worth as a person (French, 1971; May and May, 1982).
Only the Germans, one of the six immigrant groups Sowell investigates, seem to fit the structural opportunity model. Here the motivational factors, such as thrift and a strong ethic of labour, seem to be constant deriving from particular socialisation patterns in German culture. These same motivational (p.77) factors also explain why Germany as a nation has done fairly well in the world and why the only reason for migrating would be to use possible differences in structural opportunities to one’s personal advantage. Thus, skilled and disciplined German workers found that they were welcome everywhere where their particular skills and work ethics were in higher demand than at home. For all the other immigrant groups, motivation changed with migration; that is, the immigrants became different persons abroad to what they had been at home. It is this personal change that is interesting from a biographical point of view and what ultimately makes the biographical approach highly relevant in order to understand what is at stake when we talk of ethnic entrepreneurship.
The idea that it is possible to study entrepreneurship from a purely behaviouristic point of view is inaccurate or mistaken as it leaves out the important considerations individuals always make when they deliberate whether they should abandon the relatively well-known and secure life as employees for the relatively unknown and insecure life as self-employed (Kupferberg, 2002). Using the behaviouristic approach in the study of immigrant entrepreneurs (men or women) is not only mistaken, it is absurd. It neglects those existential considerations of immigrant entrepreneurs that focus on denial of social worth, or lack of social recognition, which together with feelings of lack of self-esteem and the need to prove one’s value by working harder, lead to greater risk taking and innovation in the sociological sense.
In order for sociologists to understand what immigrant entrepreneurship is about, we need to replace the behaviouristic, objectivist business economics definition of innovation predominant in entrepreneurship research with a definition that takes its point of departure in the reflexive agent, seeking to define subjectively constructed meaning in the world, negotiating identity and choosing appropriate strategies of adaptation for this particular purpose. The fundamental question one has to ask is: what kind of meaning and identity is at stake here? Only when we have investigated these subjective aspects can we begin to understand what kind of business strategies the agent has chosen and why. Whether a particular business strategy leads to ‘success’ in a business sense cannot be abstracted from where the person comes from, what his or her ambitions in life are, how the choice of entrepreneurship as a life form has been influenced by the ability to realise those ambitions and considerations or how the commitment to entrepreneurship influences that person’s social status.
‘I am proud of myself’: innovation as redefinition of legitimate means and cultural values
In order to illustrate the importance of these subjective considerations that the biographical approach seeks to investigate, analyse and reveal, this chapter presents a very striking case of ethnic entrepreneurship that appears in a recent Danish study of ethnic entrepreneurs (Thomsen and Kupferberg, 2001). The interview took place in Aalborg, a city in the northern part of Denmark. The city has about 150,000 inhabitants and is in the middle of a difficult transition from a (p.78) traditional industrial region, where the majority of the labour force is unskilled, into a post-industrial city, where higher education and information technology is seen as the key to economic growth and employment.
The respondent, whom we can call Rashid, is an immigrant from Iran. At the time of the interview, he was 48 years old, married to an Iranian women with three children (aged eight, 13 and 18). In Iran, he held a job as a rationalisation expert in a large German-owned firm, measuring the movements of workers and calculating how these could be made more effective. The company must have regarded him as a valuable resource. During the 18 years he worked in this factory, he completed a two-year educational programme entitling him to an engineering diploma. At the time of the interview he was the owner of a local grocery. The interview took place in a back room of the store and was interrupted several times when customers entered.
In the interview, Rashid emphasises his first working experiences in Denmark as a period where he was constantly humiliated. He was offered minimum wages in spite of the fact that he had proven himself to be a highly responsible and effective worker. On the first day of a new job, the owner of the factor approached Rashid with a screwdriver’, asking, ‘Do you know what this is?’. Having received the correct answer from Rashid, the boss turned to the others present, with the comment: ‘He also knows the tools’. In spite of this unpleasant start, Rashid soon ran the factory, because the owner for some reason preferred to stay at home. This working period came to an end, however, for economic reasons. The factory was in bad shape, and the equipment was too old for the firm to stay competitive. From the interview, it is not clear whether the factory closed down or whether Rashid lost his job or both.
Rashid emphasises that this period in his life convinced him that he should start a firm of his own. Although the family income was very small (his wife could not get a job in Denmark despite her having a diploma in hotel management from England and Rashid received unemployment benefits that were reduced because he had to pay his monthly trade union membership fee), they nevertheless managed to set aside a small amount of money each month, and after two to three years they had saved enough capital to realise the dream of becoming self-employed. This is the way Rashid describes the difference between his feelings today and before he became the owner of the grocery store:
What struck me when I first read this interview (I had not been present at the interview itself, which had been carried out by a research assistant) was the contrast between the expression of very strong subjective motives to start a business and the objectively poor results of that particular business. The business is far from an economic success, it is barely surviving and in order to keep it going the owner has to work long hours – and sometimes even that is not enough. To avoid running into the red, the family is called upon to make sacrifices as well. On the other hand, if the business is good, the family is rewarded by receiving luxuries as gifts for their patience. Later in the interview, Rashid reveals that, at one time, when the business was good, he bought a big and expensive car for his wife to drive in. Being tied to the business, he has no time to drive it himself. At the time business was less good, Rashid could hardly afford to pay dental bills for his children and what is even worse, he is in need of an operation. His foot hurts, but he cannot afford to stay away from the business so he suffers the pain and takes pride in the sacrifices he makes for his children’s future. He wants them to get an education and deliver him from his self-chosen predicament.
I saved money. And then – I could, I could start my own business. And it is this business. And it works … it’s been five years now. And I am very satisfied, very satisfied, not because I earn more. We don’t earn much more than we received through public assistance or from the trade union [in Denmark unemployment benefits are administered by the trade unions]. The important thing, and the important thing and the important thing to me, is that my children are proud of me, because I work. And I am proud of myself, the first day I got the store. I paid the VAT and taxes and until this day I don’t owe anyone a kroner. And all the goods that are in my store are (p.79) my own, I don’t have a bank credit. Alright? Because when I feel that our economy is bad, we stop those kind of expenses that we use for entertainment. And in this way there is always a balance … sometimes, I earn less in this store than public assistance, even if I work 14 hours every day. [At this point the interview was interrupted by the arrival of a customer.]
These elements of patience and sacrifice were clearly present in the period before he went into business. During those lean years, the rewards had to be postponed several years into the future as everything that could be saved went into the savings account. There is thus continuity between past and present, between patience and sacrifice. So what is the difference? The only difference seems to be the element of pride. The very fact that the family was indeed able to save the money necessary to start their own business and the fact that they are able to keep the business afloat both in bad and good times is the source of the pride the father feels and the pride he assumes that his children also feel.
What are the sources of this pride? It cannot be the mere fact that he works rather than being dependent on the social welfare system, although this certainly figures in the complex feelings attached to his own business. Earning his own money is merely a symbol of the personal transformation he has gone through in the process of becoming self-employed. This transformation has to be seen in the context of his personal ambitions in life, given his previous social status in his home country as a person of some importance and the contrasting experiences as immigrant in Denmark, where efforts to confirm his self-identity as an important person are constantly frustrated. He was deliberately humiliated in front of others. There was no relation at all between Rashid’s actual social worth as a highly responsible, disciplined and effective worker and his social identity, the recognition he expected in terms of wages as well as deference from the social environment. On the contrary, the latter was systematically (p.80) and, as he interpreted it, intentionally denied him, as if the environment wanted to send him the following message: ‘Stop believing that you are somebody, because you were someone in your home country. Here, we decide who is somebody and who is not’.
So much for the importance of motives, which in this case undoubtedly were the most important source of capital for starting a firm. Forget about financial capital: this was negative from the start and is still a problem that has not been solved but requires patience and sacrifice, both of which require a high degree of motivation. Forget about cultural capital as well. Had he wanted to exploit his educational or cultural capital, which was his original strategy, he would have continued to look for an employer willing to recognise his social worth. It was precisely because Rashid found that his expertise as a highly qualified worker with relevant experience somehow did not matter or was ignored that he decided that the strategy of converting his cultural capital from Iran would not work. What about social capital? The lack of it certainly contributed to his failure to continue his career in Denmark. One gets the impression that he has few if any Danish friends. Social capital figures in some of his fantasies about the future (he dreams of opening a cinema in Copenhagen for his co-ethnics), but does not seem to have played any role in his present business. The family saved the money he needed and he does not employ any co-ethnics, nor his wife and children, in particular the children whom he takes great pride in keeping out of the store so that they can remain proud of their father.
But what about the type of business he entered? How do we categorise his business strategy? Is it a successful strategy or not? Is he an innovative or imitative businessman? It is when we ask these types of questions that the radical difference between the business economics point of view of entrepreneurship and the biographical approach towards the same phenomenon becomes visible. As biographical researchers, we cannot use concepts such as success or innovation as ‘objective’ or behaviouristic concepts that are independent on the meaning-construction and negotiation of self-identity in which the person is engaged. In other words, ‘who the person is’ does indeed matter. A business that barely survives, and has little or no future prospects of ever expanding itself out of this predicament would probably fall under the category of ‘self-exploitation’ that was mentioned earlier. Ye t this is certainly not the way Rashid feels about his business. On the contrary, he takes particular pride in precisely those aspects that would make the business economist groan. What is seen as meaningless from the point of view of a behaviouristic science can be very meaningful from the point of view of a sociology emphasising reflexive agency as the core element of the sociological method (Giddens, 1976).
Let us assume that Rashid’s business is a success in the sense that it is a meaningful act, given the life experiences of Rashid as an immigrant in a welfare state society like Denmark. What, then, of innovation? Surely there is nothing in Rashid’s case that makes him an innovator – or is there? Whereas (p.81) a business point of view would argue that the structure of the opportunity model would most likely make Rashid an imitator rather then an innovator, a biographical point of view would not necessarily reach the same conclusion. The question is: what do we actually mean when we talk of an innovation? My suggestion is that, when seen from a reflexive agency point of view, what is crucial when we talk about innovation in the sociological sense is that individuals act differently from what is to be expected. In other words, they break or transcend certain norms that are seen as self-evident. What is self-evident or not of course depends on the social context (Ziehe, 1999).
Robert Merton originally suggested this broader sociological understanding of innovation in his groundbreaking article ‘Structure and anomy’ (1968). Merton’s problem in the article is how to explain how a society like the US deals with the social fact of a gap between cultural goals and legitimate means to achieve these goals. Although phrased in a structural functionalist context, Merton’s particular approach in reality relies upon the tacit assumption of reflexive agency. Rather than looking for how the ‘system’ solves the problem at hand, the focus is on how individuals or different kinds of individuals react to the gap between goals and means. Among the different types of reaction (which include conformism, ritualism and rebellion) he mentions innovation. In the way Merton uses this term, innovation is a particular way of coping with the gap between cultural goals and legitimate means, where the individual affirms the former but denies the latter. Individuals of this type indeed want to have access to the same cultural values as the rest (that is, to become rich or successful), but, since they are denied legitimate means, they are put under pressure to innovate. That is, they use whatever means can be found to reach a culturally defined goal even by using means that are defined as illegitimate or illegal by society. In other words, they break certain types of norm in order to gain the feeling of normality in other areas.
How does this theoretical model of pressure to innovate help us to understand Rashid’s road to entrepreneurship? Merton’s model cannot be applied mechanically since we are dealing with a welfare state society. No one in Denmark is under pressure to steal in order to be able to afford a place to live and to acquire other everyday necessities such as food, clothing or transport. In his interview, Rashid, similarly to other immigrants, praises the Danish welfare system in this respect and makes clear that he takes pride in following the rules in this sense (he pays his VAT, taxes, and so on). From a legal point of view, he resembles the conformist with a ritualistic type of reaction. However, his innovativeness is projected into a different arena: namely the pride he takes in having a business of his own.
We have already mentioned the sources of this pride: economic independence and the moral virtues of patience and sacrifice necessary to uphold this independent state. What is interesting is that neither of these two values ranks highly in Danish culture. As a consumer society, Danes have learned to take pride in immediate satisfaction and self-realisation. As a career society, Danes tend to look upon the small business sector as an area where efforts do not pay. (p.82) It has low social status compared with employment in large private or public organisations. A career as self-employed is, for most Danes with career ambitions, the opposite of having a career. In other words, there is no future in it (Kupferberg, 1997).
Nevertheless, career-oriented Danes do start their own businesses, but mostly reluctantly. They certainly do not feel any pride at the time, although this might change if and when the business turns out to be successful (Kupferberg, 2001). What is interesting in Rashid’s case is the elevation of status that he associates with becoming an entrepreneur. This feeling is difficult to understand from the point of view of the majority, for it is the opposite of the self-evident legitimate norms of using cultural and, to a certain degree, social capital in order to have a successful career as an employed person. In fact, Rashid entered Denmark sharing precisely this norm. It was only when he experienced the structural exclusion of immigrants who were denied the possibility of taking pride in their achievement through the ordinary means of employment that he was put under pressure to find another source of pride, namely being self-employed. It is in this sense that self-employment does indeed represent a case of innovation. Indeed, it is not everyone that can take pride in working 14 hours a day to keep a business afloat. This requires a break with the self-evident, a creative act. From this point of view, Rashid’s act has more creative elements in it than Merton’s innovation category. It resembles what Merton calls a ‘rebellion’, since not only the legitimate means but also the cultural values are redefined.
‘They will find some weak point in me’: innovation as a means to circumvent discrimination
What about female immigrants who start their own businesses? Are the motives different for this group? If so, in what ways and how can their decisions be explained? My point of departure is the case of Zahrah, an Iranian woman in her early 40s, who owns a small hairdressing business, which she started with financial and other types of assistance and encouragement from her brothers and other Iranians. The business seems to run very well; it gives her a secure income to support herself and her two children. She is divorced from her husband whom she brought to Denmark in order to get married. When the couple became estranged she decided that it was better to live alone with her children.
What is immediately striking about Zahrah is her risk aversion. She had eight years’ experience of working as a hairdresser when she came to Denmark, a career she entered after finishing school in Iran and that led to her eventually opening her own hairdressing salon before she emigrated for political reasons. She was born into a family of self-employed. She says:
She had a strong network in Denmark that assisted her in building up the business. Zahrah’s brothers, both of whom are self-employed, gave her lots of advice and massive amounts of support. She could easily borrow the 120,000 kroner necessary to start up the business from her brothers. A further advantage was that she did not have to hire an accountant to help her with the paper work: “It is my brother’s wife, she comes and helps me to clear up the things”. Her brothers were also instrumental in setting up the business:
(p.83) My parents were self-employed. My … father, he had a knitting factory and it was the work of all the family, my uncles … and everything. And my mother … she had something that they sewed … fabric for the shops.
In spite of all these advantages, she was not too eager to become the owner of a hairdressing business. She feared that if she failed, it would “hurt my family … be a catastrophe”. And although the business has been steadily expanding and seems to run very well, the idea of employing someone else so that she could spend more time with her children is something that she does not dare to consider seriously:
My brothers told me that they can all help me. Give me advice how to open a … business …. I started looking a little … if there was anything. So I was lucky, I found the first place in the newspaper, it was actually my brother who said there was a hairdressing salon [to rent].
She is also afraid to employ someone because of the extra costs of hiring an accountant:
If I would like to employ one, it costs such an awful lot of money, and I am a little afraid of that. Maybe it would be a good idea, if I can employ someone and see if it works out well, it would be better for me. But I work so hard as I do right now, but perhaps … it is something that scares me.
Given the notion of entrepreneurship as risk taking, her strong risk aversion is interesting. We do not find the particular pride in working long hours in order to support one’s family that we found in Rashid’s case. Many of her thoughts actually go towards reducing her immense workload in order to live up to her role as mother. Somehow, one gets the impression that she feels a little guilty about it. However, because of her strong risk aversion she is unable to solve that dilemma. However, if neither pride nor willingness to take risks can (p.84) explain her motive to become self-employed, how do we account for her taking this important step in her life at all? One gets the feeling that she was more or less persuaded by her social environment to change her social status. Her own role seems to have been more or less passive.
If I get employees, I need a real accountant and all those things – and then, then that will bring big expenses. So therefore I am afraid. Maybe it will turn out good if I do. But, but … there are some things that … there are always limits for the risk [I can take] …. I cannot take that risk now. Maybe in a couple of years.
Her feelings once she started her business reveal that she was still not convinced that she had done the right thing. She had looked at the premises, rented them and started:
There are two alternative narratives that might possibly explain her decision to become self-employed. One has nothing at all to do with discrimination: it simply derives from her personal situation as a divorced immigrant women in modern society. As such she was hanging between two cultures. Divorces are unthinkable in traditional societies. They rarely occur because strong pressure is put on both parties to find another solution. However, there is also a strongly gendered culture for both men and women where problems of marriages can be ventilated in a social forum. In modern societies, where divorce is a common phenomenon, it does not represent a break against any strong norms. Precisely for these reasons there are no gendered social fora where the individual can seek emotional support and advice about how to cope with the psychological aftermaths of a divorce.
So it worked! But I was very, very worried because of my language and … now I speak better than at that time. Two years ago. And then … new hair colour … and perhaps they don’t like coming here … the customers. But, just after a couple of months I could see “Wow, someone is coming” … as customers, they are all so nice and courteous… I don’t have to worry, if there is something…. If I lack some words or something like that, then they can help me.
This leaves women like Zahrah in a situation where they have to find other ways of getting out of their home to engage in talk and socialise with other women. This social need is indeed mentioned as one reason why she decided to become self-employed after her divorce:
Although Zahrah tends to psychologise her situation, her emphasis upon wanting to get out of her home has to be seen in the Danish cultural context where problems related to divorce and how to cope with it have been privatised. It is for this reason that work becomes a kind of refuge from marital problems. Here it is possible to forget one’s privatised problems, simply because work (p.85) keeps oneself busy. In other words, Zahrah diagnosed her situation correctly; unless she wanted to enter a therapeutic treatment, a job would be the best alternative.
It was so sad, and I didn’t want to stay at home, so I didn’t want to be a patient [her own word] receiving public assistance or such things…. And so … I had to find a solution. Like getting out of the house and that, shift to some quite different thoughts … be busy with something else like…. Not feel so sad…. It was like a psychological … treatment I gave myself at that time.
However, if all Zahrah needed to do was work, why didn’t she simply work as an employed hairdresser? It is when we introduce this problem that we discover a different narrative underlying the former one, one that seems to have been the fundamental motive for Zahrah’s self-transformation. Although she had been educated as a hairdresser and worked in the business for eight years, her qualifications were not recognised by Danish hairdressers. When she presented her predicament to the authorities and asked what she was expected to do, she was told that she had to start all over again and re-enter hairdressing training. This would take her four years:
This is a very powerful statement and it goes to the root of the problem. What Zahrah experienced was simply the naked discrimination of the labour market that all immigrants in Denmark experience in one way or other. Since she was not a man, the way she coped with this discrimination or structural exclusion did not involve a large amount of personal pride, nor was she willing to take great risks in overcoming discrimination. Precisely for these reasons, her motivation to become self-employed is ‘purer’ than in the case of Rashid. Paraphrasing Durkheim (1965), we could say that we are here observing the elementary forms of immigrant entrepreneurship. Immigrants become entrepreneurs, because the normal roads for a normal occupational work life remain closed to them. As Zahrah puts it, the employers will always “find some weak points in me”.
And so they told me, I can be employed some places, if they want me, or I can become self-employed. But I cannot have, how do they call it, the only difference between a hairdressing salon that has been educated in Denmark and one they has not been educated in Denmark, is that you cannot have a student. That’s what they told me…. Then I thought that this is because I don’t have a Danish education, it will always give problems in some workplaces … they will always find a weak point in me … not like the other common employees.
Why is this an innovation? Why is it not simply a case of discrimination that should be deplored? Innovation normally has a positive connotation. How can a situation that derives from something as morally repugnant as naked discrimination be positive? Those who make the latter kind of argument tend to forget that what makes innovation positive is not those negative or deplorable contexts that precede it but the creative ways in which reflexive agents (sometimes) cope with social injustice. Although the situation of an immigrant has little to do with social justice, this does not mean that we should not celebrate and admire the ways individuals like Zahrah somehow manage to find a way out of the bitterness that being a victim of social injustice always brings with it. Surely Zahrah’s decision to become self-employed made her a (p.86) happier person? This is actually how she describes it: “It was happiness to start as [self-employed]”. Without this feeling of exhilaration or happiness she would surely never have overcome her own fears and hesitations. Her happiness was pure, because the discrimination she encountered was so naked and because she found a way to escape confronting it for the rest of her working life.
The overall model of ethnic entrepreneurship that this chapter has arrived at suggests that the structural opportunity approach is inadequate, mainly because it ignores reflexive agency and in particular the motivational capital that immigrants draw on when entering business. This motivational capital can take many different forms, however, depending on the life history of the immigrant. From a policy point of view, what should be emphasised is the crucial difference in coping strategies among male and female immigrants. Here the overall pattern seems to be that, whereas the pressure to innovate among male immigrants takes the form of personal pride and high risks, for female immigrants escaping discrimination in itself is the fundamental motive. The motives of the female immigrants in other words are less over-determined or, shall we say, less ‘clouded’ by other issues.
This general pattern appears not only in the Danish material assembled for the TSER project entitled ‘Self-employment activities concerning women and minorities: their successes and failures in relation to citizenship policies’, but seems to be general for all countries with strong welfare states such as Sweden, Denmark and Germany. Immigrant men generally seemed to be much more risk-oriented and oriented towards issues of self-pride than immigrant women. What convinced the immigrant men to start their own business were humiliating experiences of discriminatory low wages often compounded by racial slurs from work colleagues, failed attempts to get a job within the profession to which they were formally qualified in terms of years of education and experience, or merely the firm decision not to live off public welfare and the desire to support their own family financially. To let the welfare state replace the immigrant man as the ‘breadwinner’ in the family was seen as the utmost humiliation and for this reason avoided at all costs.
In contrast to the immigrant men, who are under strong pressure to take more or less uncalculated risks in order to prove their self-worth, among immigrant women these compensatory, self-assertive motives to start one’s own business are mostly absent in the three welfare states investigated (Germany, Sweden and Denmark). For immigrant women, the predominant motive for becoming self-employed is experience of naked discrimination, the feeling that ‘they will always find some weak point in me’. Problems of self-esteem rarely enter their consideration. From this, it follows that women immigrants as a rule are very reluctant to start their own businesses. The experience of naked discrimination might push them in the direction of self-employment, (p.87) but they will at the same time be pulled back by the anxieties of the risks ahead or the hard work necessary.
What our biographical interviews with male and female immigrants in welfare states suggest is that training programmes for immigrants have to take into account the different kinds of motivational capital they bring with them. For women immigrants, the main problem is how to encourage them to take risks by reducing some of the risk factors, for example, by access to cheap financial credits, finding the right premises and providing free accounting assistance during the first years. For men immigrants, the problem is the opposite: how to discourage them from engaging with risk and encourage them to be more cautious and rational in developing a realistic business plan.
Whereas in welfare states starting a business of one’s own among immigrants is mainly motivated by ethnic discrimination giving rise to male search for pride and risk taking and female risk aversion, the biographical material in the UK – part of the TSER project – seems to suggest that ethnic discrimination as a motive to become self-employed might also take a more discrete form. Here, ethnic discrimination functions less as an entrance barrier to the labour market, and more as a career barrier in the sense that top positions are tacitly reserved for members of the majority (the idea of the ‘glass ceiling’). In Italy and Greece, ethnic discrimination functions on a legal level. Immigrants are often unregistered or they lack the legal status of citizen necessary to start their own business. This adds particular aspects to the pressure to innovate.
Thus, one immigrant from North Africa who had entered Greece illegally had to take the high risk of registering his firm in the name of another immigrant who had achieved citizenship status. Whether that immigrant who nominally was in charge of the firm would be willing to give the firm back to its rightful owner when the time came was simply a risk he had to live with. Another highly educated immigrant from North Africa was shocked when he found that most of his countrymen were street hawkers. Slowly he adjusted himself to the reality and became a street hawker himself. In this case, the innovation consisted in reversing his own view of what was morally acceptable according to the culture he came from. He had to redefine his cultural pride as the price for adjusting to the host culture. Facing the reality of massive ethnic discrimination, he had to redefine what was morally proper under the given circumstances.
This moral rethinking is very close to what Merton was thinking of when he introduced the concept of innovation. What he was hinting at might have been the predominant role played by certain immigrant groups in North America, such as the Italian and Irish Catholics as well as the Jews from Eastern Europe and Russia, in industries that at the time were seen as immoral by the Protestant majority: gambling and boot-legging (and possibly the film industry as well), for example, where ‘moral’ entrepreneurs were strongly engaged to outlaw such outrageous practices. Although only a small minority within the above-mentioned immigrant groups did partake in making a business in these areas, these minorities were clearly over-represented, which is why the literature (p.88) sometimes talks of an ‘ethnic vice industry’ (Light, 1977). However, what is a vice in the eyes of the majority can be redefined as a virtue by the minority. There is no such thing as an ‘objective’ structure of opportunity; rather, it is how individuals subjectively find meaning in a particular opportunity and whether it supports that individual’s negotiation of identity that alone makes it possible to evaluate the moral value of the strategies of adaptation chosen.
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