International Journal of Entrepreneurial Behaviour & Research

Volume 8 Number 1/2, 2002

ISSN 1355-2554

ISBN 1-84544-124-9

International Journal of

Entrepreneurial Behaviour & Research The economic context, embeddedness and immigrant entrepreneurs Guest Editors Jan Rath, Robert Kloosterman and Eran Razin

ISSN 1355-2554

Internet services available worldwide on URL http://www.emeraldinsight.com

Volume 8 Number 1/2 2002

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CONTENTS The economic context, embeddedness and immigrant entrepreneurs Guest Editors Jan Rath, Robert Kloosterman and Eran Razin

Abstract and keywords ________________ Editorial: the economic context, embeddedness and immigrant entrepreneurs _________________________ The economic embeddedness of immigrant enterprise in Britain Giles Barrett, Trevor Jones, David McEvoy and Chris McGoldrick _________________________________

3

6

11

Mixed embeddedness: does it really explain immigrant enterprise in Western Australia (WA)? Nonja Peters _____________________________________

32

Unbalanced embeddedness of ethnic entrepreneurship: the Israeli Arab case Izhak Schnell and Michael Sofer _____________________

54

How innovative are Dutch immigrant entrepreneurs? Constructing a framework of assessment Ewald Engelen____________________________________

69

Economic associations of immigrant self-employment in Canada Daniel Hiebert ____________________________________

93

Chinese entrepreneurs: the Chinese Diaspora in Australia Jock Collins ______________________________________ 113

From four-course Peking duck to take-away Singapore rice: an inquiry into the dynamics of the ethnic Chinese catering business in Germany Maggi W.H. Leung ________________________________ 134

CONTENTS continued

Business opportunity or food pornography? Chinese restaurant ventures in Antwerp Chin Ling Pang___________________________________ 148

Conclusion: the economic context, embeddedness and immigrant entrepreneurs Eran Razin ______________________________________ 162

The economic embeddedness of immigrant enterprise in Britain Giles Barrett, Trevor Jones, David McEvoy and Chris McGoldrick Keywords United Kingdom, Ethnic groups, Immigrants, Corporate culture Immigrant-owned business in Britain is reviewed in the light of both cultural and structural economic perspectives. The latter view is emphasised. Concentration in trades which are in decline, or are labour intensive, or both, creates acute competitive pressures which are exacerbated by the growing presence of corporate rivals in many markets. Real and perceived bias on the part of banks helps to limit diversification. Attempts to move away from characteristic activities, both geographically and sectorally, have had only limited impact. Accumulation of class resources holds the greatest promise for entrepreneurial success. Mixed embeddedness: does it really explain immigrant enterprise in Western Australia (WA)? Nonja Peters Keywords Enterprise economics, Immigrants, Australia Kloosterman, van der Leun and Rath assert they conceptualised the ‘‘mixed embeddedness’’ hypothesis to overcome the shortcomings characteristic of earlier theoretical models of immigrant business enterprise. This article assesses the relevance of this theoretical perspective to explaining immigrant entrepreneurship in a specific host setting with reference to research that spans a number of economic periods and includes both genders and a number of generations. It is argued that, while the ‘‘mixed embeddedness’’ explanation gives a more comprehensive explanation than previous models, it nonetheless fails to explain the wide-ranging inter-ethnic variation in entrepreneurial concentration observed among immigrant groups around the world. It contends that the reasons for this are the model’s lack of historical perspective and focus on the lower end of the market. It also demonstrates how the study of immigrant enterprise is advanced by incorporating the agency of individuals into the explanatory process.

Unbalanced embeddedness of ethnic entrepreneurship: the Israeli Arab case Izhak Schnell and Michael Sofer Keywords Industry, Israel, Entrepreneurialism, Ethnic groups Ethnic entrepreneurs’ networks are analysed on the basis of three complementary dimensions: intensity and complexity of networks; power relations; and entrepreneurs’ horizons of awareness. The analysis is based on two theoretical propositions. First, firms located in the periphery are weakly embedded in national markets due to their external depended relations. Second, local firms use the tendency to embed themselves in their home regions as a strategy to improve their position in external power relations. The inquiry of Arab industry in Israel suggests that the form and degree of embeddedness of any given firm is affected by the existence of both separate economic milieus: Arab and Jewish. The findings lead us to suggest two concepts. First, over-embeddedness, which characterises Arab firms that are highly embedded in the local milieu, operate under the influence of kinship structures and a petrified supportive tissue that downgrades networks into cohesive coalitions opposing structural changes. Second, underembeddedness, which characterises firms that manage to develop and maintain wide inter-ethnic dependent sets of networks, but due to lack of power fail to transform them into more rewarding exchanges. How innovative are Dutch immigrant entrepreneurs? Constructing a framework of assessment Ewald Engelen Keywords Innovation, Immigrants, Entrepreneurialism, Start-ups, The Netherlands Asks how innovative Dutch immigrant entrepreneurs are. Since the mid-1980s the number of immigrant firms has more than tripled. This coincides with a huge increase in the number of start-ups in the Dutch economy as a whole. However, international comparisons show that this increase has not resulted in an equal rise in the number of fast growing firms that add value and create employment – the so-called gazelles – and are hence the preferred ideal of policy makers.

Abstracts and keywords

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This raises the question of how innovative the Dutch economy might be. To address this issue, constructs a framework of assessment, derived from the divergent capitalisms approach of Richard Whitley and associates, as this approach offers a useful conceptual instrument to do so. Concludes that, despite appearances, the Dutch institutional setting is not very conducive for value creating innovations, but instead seduces firms, especially small and medium enterprises, to follow reactive strategies. Offers some general remarks on how the conditions for innovation can be improved. Economic associations of immigrant self-employment in Canada Daniel Hiebert Keywords Canada, Immigrants, Entrepreneurialism, Labour market, Segmentation, Ethnic groups In the last 30 years or so we have seen a proliferation of research projects on immigrants and non-white minorities in the labour market (labour market segmentation) and as entrepreneurs (ethnic entrepreneurialism). Each of these literatures helps us understand the nature of immigrant and minority participation in the labour market, but each only offers a partial view. In this paper, I bring these topics together in an empirical investigation of the relationship between ethnic labour market segmentation and ethnic entrepreneurialism in Canada, using 1996 census data. I show that there is a close correspondence between the niches where immigrants and minorities find work, and those where they become entrepreneurs. Immigrants who are drawn to niches that offer few opportunities for self-employment have low rates of entrepreneurship and, conversely, those who are over-represented in niches with considerable scope for selfemployment are inclined to establish their own businesses. This shows that the propensity for self-employment is, to an important degree, determined in the regular labour market. Therefore, entrepreneurship should not be seen as an intrinsically cultural phenomenon (i.e. that certain groups are ‘‘naturally’’ entrepreneurial), but instead as arising out of the opportunity structure associated with wage and salary labour.

Chinese entrepreneurs: the Chinese Diaspora in Australia Jock Collins Keywords Labour market, Australia, Ethnic groups, Entrepreneurialism Recounts the history of the Chinese Diaspora in Australia, which dates back to the Gold Rush of the 1850s. In the past three decades, following the end of the white Australia policy, many ethnic Chinese immigrants have immigrated to Australia. Although there are only 300,000 people of Chinese ancestry living in Australia, Chinese immigration is a critical chapter of Australia’s immigration experience. Chinese entrepreneurs have played a major role in the history of the Chinese in Australia. Explores the experience of Chinese entrepreneurs in Australia from the earliest days till the present and reviews historical accounts of Chinese entrepreneurs in Australia, before presenting the results of recent research. Argues that it is necessary to investigate how ethnicity, gender and class have intersected to shape changing patterns of Chinese entrepreneurship in the Australian Chinese Diaspora. Suggests also that the dynamics of Chinese immigration and Chinese entrepreneurship in Australia have been shaped by the changing dynamics of globalisation, the state and the racialisation of Chinese immigrants in the Australian labour market and society as a whole. From four-course Peking duck to take-away Singapore rice: an inquiry into the dynamics of the ethnic Chinese catering business in Germany Maggi W.H. Leung Keywords Restaurants, Germany, Ethnic groups, Immigrants Draws on the concept of ‘‘mixed embeddedness’’ to challenge the popular culturalistic view that Chinese migrants enter the catering business simply because they are Chinese. Based on qualitative interview results and observations from fieldwork conducted in German cities, illustrates first the dynamic nature of the Chinese restaurant trade. Proceeds to explore how important factors such as Chinese migrants’ access to alternative employment, the development of in- and out-migration policies in Germany and

East Asia, the changing consumer demand and market conditions, as well as availability of set-up capital, shape the volume and forms of Chinese restaurant trade, the kinds of food served, hiring practices and other business strategies. Business opportunity or food pornography? Chinese restaurant ventures in Antwerp Ching Lin Pang Keywords Entrepreneurialism, Ethnic groups, Immigrants, Restaurants, Belgium Maps and analyzes the development of ethnic Chinese food in the city of Antwerp through the ethnography of both Chinese immigrant entrepreneurs and their customers. Most existing studies draw our attention to group characteristics in explaining Chinese immigrant small businesses, predominantly clustered in the catering sector. Some studies examining Chinese immigrants and the development of the catering sector adopt a mixed model of group characteristics and opportunity structures in the broader society. Looks into a hitherto unexplored terrain, namely the relation between the white customer and the immigrant entrepreneur. Such an in-depth analysis ‘‘from within’’ instructs us about the dynamics of the immigrant/ethnic restaurant business. From the perspective of the immigrant entrepreneur, immigrant/ethnic restaurants provide in many instances an avenue to social mobility, thereby overcoming the general constraints facing immigrants such as insufficient financial capital, low educational levels, linguistic handicap, etc. The economic advancement is the success side, whereas the success has a series of social

costs. The social exchange is fraught with ambivalence, which into its most extreme manifestation may turn into what Frank Chin calls ‘‘food pornography’’. The two dimensions both present in Chinese immigrant restaurant ventures for they provide opportunities with a series of social costs.

Abstracts and keywords

5 Conclusion: the economic context, embeddedness and immigrant entrepreneurs Eran Razin Keywords Immigrants, Entrepreneurialism, Ethnic groups, Economic conditions Concludes that the impact of the economic context on entrepreneurship among immigrants is group specific. The concepts of embeddedness, which acknowledges that economic action is embedded in the structures of social relations, and mixed embeddedness, which incorporates both roles of co-ethnic networks and linkages between immigrants and the broader society, could have a major role in explaining these variations. However, these concepts could be criticized as being fuzzy and hard to verify empirically, and as presenting an idealistic image on the favorable role of intra-ethnic networks. Case studies demonstrate various aspects of the economic milieu that influence immigrant enterprise and provide some evidence for the embeddedness and mixed embeddedness concepts, although not fulfilling the need for a broader and more formal verification of arguments based on these concepts. An imbalance between too intensive intra-ethnic ties and lack of sufficient instrumental interethnic networks is revealed in some of the studies.

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About the Guest Editors Jan Rath is at the Institute for Migration and Ethnic Studies (IMES), University of Amsterdam, The Netherlands. Robert Kloosterman is at the Amsterdam Study Centre for the Metropolitan Environment (AME), University of Amsterdam, The Netherlands. Eran Razin is in the Department of Geography, Hebrew University of Jerusalem, Mount Scopus, Jerusalem. Keywords Immigrants, Entrepreneurialism, Ethnic groups, Economic conditions

International Journal of Entrepreneurial Behaviour & Research, Vol. 8 No. 1/2, 2002, pp. 6-10. # MCB UP Limited, 1355-2554

The last few decades have shown a remarkable reappraisal of the small business sector. Since the 1970s, the gloomy orthodoxy notwithstanding, a large number of people have set up shop and managed to survive in an increasingly global economy. Their role in the economy has been publicly acknowledged by now, as has been amply demonstrated by the drastic liberalization of their regulatory environment. The dramatic shift from an economy based on manufacturing to one based on services, the fragmentation of markets, the rapidly declining costs of information technology as well as changes in the political approaches regarding small businesses are key factors that help explain the recent development of the small businesses sector. Another factor contributing to that development – often overlooked in general reports about the SME sector – is the cross-border mobility of people. Virtually every advanced economy – the timing may differ from place to place – has experienced mass immigration, especially from Third World countries, but increasingly also from other, more developed countries. A significant number of these immigrants possess specific skills and resources. Although the vast majority gravitates to wage labor, quite a few of them – and this may vary from group to group – enter self-employment. The latter evidently make a distinct presence in many advanced economies. Some sectors such as garments, restaurants and construction would, in many cases, barely stand a chance of survival without the immigrants’ entrepreneurial drive. In the same vein, many working-class neighborhoods would be impoverished if immigrant businesses ceased to exist. Sociologists, anthropologists and geographers rather than business economists have acknowledged the significance of immigrant entrepreneurship. Since the early 1970s, academic researchers from the USA and Britain, but also from Canada, Australia and the European continent, have built up a distinct body of literature. As is the case in any other branch of social science, they have not reached consensus as to the factors and processes that account for the emergence of immigrant entrepreneurship and the This is part of a special issue of papers entitled ‘‘The economic context, embeddedness and immigrant entrepreneurs’’ edited by Jan Rath, Robert Kloosterman and Eran Razin.

particularities – if any – of immigrant entrepreneurs’ daily business operations. Some researchers, notably the British geographers David McEvoy and Trevor Jones, emphasized structural factors, while others put more explanatory value into cultural factors. Despite a collaborative attempt in the late 1980s to accommodate these differences in one ‘‘integrative model’’ (Waldinger et al., 1990), the focus of much research has been put on characteristics of the entrepreneurs and the ethnic group they belong to. One immensely popular line of theoretical thought in this respect revolves around issues of social embeddedness. Following economic sociologists such as Granovetter, researchers look for the entrepreneurs’ social connections to relevant (ethnic) others and attribute the success of their business ventures, or lack of it, to particularities of their embeddedness in social networks. While accepting that social networks are important, a growing number of researchers strike a critical note and argue that the adherents of this approach show a tendency to overstate ethno-social features and understate matters of political economy. Besides, this approach hardly lends itself to international comparative research, as it does not fully appreciate the significance of the economic environment and the politico-regulatory framework in which entrepreneurs operate. Mixed embeddedness was intended to incorporate just that and to enable comparative research (Kloosterman et al., 1999). Although mixed embeddedness was not defined very neatly at first, we now have a more focused understanding of this concept. In our view, mixed embeddedness is an attempt to combine factors that operate at a micro, meso and macro level in a meaningful way that allows (cross-border) comparison. The current embeddedness approaches, although very fruitful, tend to stick too much to the micro and the meso level by focusing on actors and social networks. There is nothing wrong with that but this has severe limitations, especially if you want to engage in international comparative research. You have to go beyond this and include not only actors and networks but broader socio-economic, political and institutional structures as well. This is the room where an individual actor makes his or her choices and where social networks may provide resources or may hamper further advancement. Waldinger and his associates also wanted to go down this road, but they never problematized or conceptualized the opportunity structure in a way that would allow operationalization within a (cross-border) research framework. This implies that we have to link up with broader debates on how employment and self-employment are structured along different trajectories that emerge in post-Fordist/post-industrial regimes. Esping-Andersen made a heroic attempt in 1990 with his Three Worlds, spelling out how ideal-typical institutional (mainly social policies) conditions may impact on employment structures. This framework can be used as an example of how different post-Fordist/post-industrial (self-) employment trajectories may be understood in a more abstract way. The quintessence of mixed embeddedness is to take on board these notions and to position actors (and social networks) in broader

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structures (similar to Giddens’ structuration theory). To be able to use mixed embeddedness in empirical research, we advocate the construction of another heroic typology that describes how different broader institutional frameworks and related socio-economic processes of change generate opportunity structures along path-dependent trajectories. This gives researchers a handle on the shape of the three crucial variables of the opportunity structure (i.e. the size of the market domain, accessibility of markets and growth potential of markets). This, then, can be linked to, for instance, Engelen’s (2001) contributions on breaking in and breaking out strategies, and subsequently on various social network and actor theories. Mixed embeddedness can now be elaborated in a middle-range theory that can capture cross-country variations in a meaningful way. It is nevertheless clear that the conceptualization and operationalization are still matters of debate. Researchers in Europe and increasingly also from North America and Australia have been spelling out the theoretical and practical implications of mixed embeddedness in a series of international exchanges, sponsored by the European Commission. One such exchange focused on the impact of the economic context on entrepreneurship among immigrants. A number of papers are presented in this special issue of the International Journal of Entrepreneurial Behaviour & Research. In their article, Giles Barrett, Trevor Jones, David McEvoy and Chris McGoldrick ascertain that immigrant-owned businesses in Britain are concentrated in trades that are in decline and/or labor intensive, and argue that the accumulation of class resources rather than ethnic ones holds the greatest promise for entrepreneurs who want to move away from these acute competitive pressures and want to become more successful. Nonja Peters assesses the relevance of the mixed embeddedness approach based on an empirical study that spans a number of economic periods and includes both genders and a number of generations. She argues that while the ‘‘mixed embeddedness’’ approach gives a more comprehensive explanation than previous models, it nonetheless fails to explain the wide-ranging inter-ethnic variation in entrepreneurial concentration observed among immigrant groups around the world. She attributes this to the approach’s lack of historical perspective, focus on the lower end of the market and lack of appreciation of the agency of individuals. Izhak Schnell and Michael Sofer present an inquiry into the Arab industry in Israel and suggest that the form and degree of embeddedness of any given firm is affected by the existence of both separate economic milieus: Arab and Jewish. They suggest that Arab firms that are over-embedded in the local milieu operate under the influence of kinship structures and a petrified supportive tissue that downgrades networks into cohesive coalitions opposing structural changes. They, moreover, argue that firms that are under-embedded manage to develop and maintain a wide interethnic dependent set of networks, but fail to transform them into more rewarding exchanges due to lack of power. Ewald Engelen, in a more conceptual paper, explores the innovativeness of immigrant entrepreneurs in

The Netherlands. He constructs a framework of assessment based on the divergent capitalisms approach of Richard Whitley and associates, and concludes that despite the rise of small businesses, the Dutch institutional setting is not very conducive for value creating innovations. Instead, it seduces firms, especially small and medium enterprises, to follow reactive strategies. Daniel Hiebert presents an empirical investigation into the relationship between ethnic labor market segmentation and ethnic entrepreneurialism in Canada. He demonstrates that immigrants who are drawn to niches that offer few opportunities for self-employment have low rates of entrepreneurship and, conversely, those who are over-represented in niches with considerable scope for self-employment are inclined to establish their own businesses. This shows that the propensity for self-employment is, to an important degree, determined in the regular labor market. He concludes that entrepreneurship should not be seen as an intrinsically cultural phenomenon, but instead as arising out of the opportunity structure associated with wage and salary labor. Jock Collins explores the experience of Chinese entrepreneurs in Australia from the earliest days till the present. He argues that it is necessary to investigate how ethnicity, gender and class have intersected to shape changing patterns of Chinese entrepreneurship in the Australian Chinese Diaspora. He also suggests that the dynamics of Chinese immigration and Chinese entrepreneurship in Australia have been shaped by the changing dynamics of globalisation, the state and the racialization of Chinese immigrants in the Australian labour market and society as a whole. In her contribution, Maggi W.H. Leung challenges the popular culturalistic view that Chinese migrants enter the catering business simply because they are Chinese. She explores how important factors such as Chinese immigrants’ access to alternative employment, the development of in- and out-migration policies in Germany and East Asia, changing consumer demand and market conditions, as well as availability of set-up capital, shape the volume and forms of Chinese restaurant trade, the kinds of food served, hiring practices and other business strategies. Ching Lin Pang also examines Chinese restaurateurs, albeit from a different angle. She looks into the relation between white customers and immigrant restaurant entrepreneurs in the city of Antwerp, Belgium. Immigrant/ethnic restaurants provide, in many instances, an avenue for social mobility, thereby overcoming the general constraints facing immigrants such as insufficient financial capital, low educational levels, linguistic handicap, etc. This entrepreneurial success is fraught with ambivalence, which in its most extreme manifestation may turn into what cultural studies scientist Frank Chin called ‘‘food pornography’’. The two dimensions are both present in Chinese immigrant restaurant ventures for they provide opportunities with a series of social costs. In the final contribution, Eran Razin wraps up the special issue. He argues that the concepts of embeddedness, which acknowledges that economic action is embedded in the structures of social relations, and mixed-embeddedness, which incorporates both roles of co-ethnic networks and linkages between

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immigrants and the broader society, could have a major role in explaining entrepreneurial variations. On the one hand, he criticized these concepts as being fuzzy and hard to verify empirically, and as presenting an idealistic image on the favorable role of intra-ethnic networks. On the other hand, he points to a number of aspects that help to flesh out the embeddedness and mixed-embeddedness concepts. Jan Rath and Robert Kloosterman References Engelen, E. (2001), ‘‘‘Breaking in’ and ‘breaking out’’’, Journal of Ethnic and Migration Studies, Vol. 27 No. 2, pp. 203-23. Kloosterman, R., van der Leun, J. and Rath, J. (1999), ‘‘Mixed embeddedness. Immigrant businesses and informal economic opportunities’’, International Journal of Urban and Regional Research, Vol. 23 No. 2, June, pp. 253-67. Waldinger, R., Aldrich, R., Ward, R. and Associates (1990), Ethnic Entrepreneurs. Immigrant Business in Industrial Societies, Sage, Newbury Park, CA.

The economic embeddedness of immigrant enterprise in Britain Giles Barrett, Trevor Jones, David McEvoy and Chris McGoldrick

Immigrant enterprise in Britain 11

Centre for Social Science, Liverpool John Moores University, UK Keywords United Kingdom, Ethnic groups, Immigrants, Corporate culture Abstract Immigrant-owned business in Britain is reviewed in the light of both cultural and structural economic perspectives. The latter view is emphasised. Concentration in trades which are in decline, or are labour intensive, or both, creates acute competitive pressures which are exacerbated by the growing presence of corporate rivals in many markets. Real and perceived bias on the part of banks helps to limit diversification. Attempts to move away from characteristic activities, both geographically and sectorally, have had only limited impact. Accumulation of class resources holds the greatest promise for entrepreneurial success.

Embeddedness Throughout the comparatively short history of ethnic business studies, attempts to make sense of immigrant-origin enterprise have been characterised by an agency-versus-structure battle between those emphasising internal communal resources as a unique business advantage and those who see the external political-economic context as the ultimate shaper of ethnic entrepreneurial outcomes. Recently, Kloosterman et al. (1999) have sought to replace the discourse of ethnic resources versus opportunity structure with the notion of mixed embeddedness. Here the spotlight is directed more explicitly on the interaction between internal and external forces; ethnic enterprise is certainly grounded in the cultural milieu of its own community but it is in no way isolated from the surrounding environment. Rather, enterprise should also be seen as grounded in mainstream resources, primarily market conditions which set the outer parameters on how much and what kind of ethnic enterprise can exist, which are themselves constrained by politico-legal regulatory structures ranging from national immigration and citizenship practices to local planning policy. The legal status of immigrant minorities is in itself a key determinant of whether self-employment is viable or even possible as a career choice. Similarly, the nature of the national economic regulatory regime can be decisive in creating or blocking market space, with ethnic entrepreneurs far more numerous in the relatively deregulated Anglo-Saxon economies (Collins et al., 1995; Light and Rosenstein, 1995; Razin and Langlois, 1996; Ram and Jones, 1998; Barrett et al., 2001) than in most mainland European states. This article is part of a special issue of papers entitled ‘‘The economic context, embeddedness and immigrant entrepreneurs’’ edited by Jan Rath, Robert Kloosterman and Eran Razin.

International Journal of Entrepreneurial Behaviour & Research, Vol. 8 No. 1/2, 2002, pp. 11-31. # MCB UP Limited, 1355-2554 DOI 10.1108/13552550210423697

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Although the UK now has an extensive literature relating to its immigrantorigin (ethnic minority) businesses, there has been little time for the application of the mixed embeddedness perspective. This paper addresses this gap by focusing on the socio-economic aspects of embeddedness, emphasising the constraints as well as the opportunities created by post-Fordist restructuring since the 1970s. We begin with an examination of the demographic and economic framework of ethnic minority business in Britain which, given the strong influence of demographic and labour market forces on the nature of ethnic minority entry into self-employment, is a vital facet of embeddedness. Turning the spotlight on market opportunities and constraints post-entry, we then report on sectoral variations in the nature of ethnic minority business at the local and regional level, as established by our own fieldwork. Here the emphasis is on the sectoral underdevelopment of ethnic minority enterprise, its confinement within some of the least rewarding markets in the economy as a consequence of a complex of socio-economic barriers (some of which are racist at root) to its development. Recognising also that this pattern is far from fixed, and that increasing diversification is gradually occurring, we consider the temporal dynamics of South Asian business in Britain, drawing on some of our earlier publications, but also on some recent data collection and on the work of authors engaged in parallel investigations. Among other issues, this will throw light on shifting embeddedness, the question of how far diversification and development entail a move away from ethnic resources to class resources. The demongraphic and economic context of ethnic minority business development Table I, based on the most recently available census figures, presents a broad outline of the size and employment status of Britain’s ethnic minorities. It shows that, contrary to many popular perceptions of ‘‘swamping’’, ethnic minorities, even when considered collectively, are still only a small fraction, 5.5 per cent, of the British population and of the more narrowly defined ethnic communities, only Indians exceed 1 per cent of the total population. With regard to unemployment rates, there is a wide gulf between whites and ethnic minorities, with the latter consistently disadvantaged, except in the case of Chinese men, the gulf being most pronounced for black, Pakistani and Bangladeshi men, whose employment status continues to reflect their initial incorporation into the British economy as replacement labour in low level occupations (Ohri and Faruqi, 1988). In conjunction with the dependency ratios and other indicators such as incomes (Leslie et al., 1998), the unemployment figures confirm that, for the most part, Britain’s ethnic minorities remain substantially marginalised economically (Barrett et al., 2001). Many scholars believe that this results largely from a combination of deindustrialisation and racism (Brah, 1996). Industries such as textiles and engineering, to which immigrants had been recruited, dispensed with their services when competitive pressures enforced downsizing.

Population (000s)

Percentage of total population

Percentage unemployed Men Women

Self-employed as percentage of all in work

Self-employed with employees as percentage of all in work

Child dependency ratio

White

51,873.8

94.5

9.4

4.5

12.8

4.3

31.7

Ethnic minority groups

3,015.1

5.5

16.2

8.8

15.1

6.3

52.1

890.7 500.0 212.4 178.4

1.6 0.9 0.4 0.3

20.7 20.7 20.4 21.4

11.6 10.1 15.2 12.0

6.7 6.0 8.1 8.2

1.6 1.3 2.3 2.1

44.2 30.8 41.7 103.0

1,479.6 840.3 476.6 162.8

2.7 1.5 0.9 0.4

15.3 11.0 21.6 22.9

7.8 7.6 8.3 7.7

20.8 20.0 23.9 18.6

9.1 8.7 9.2 13.6

58.7 45.1 76.7 91.2

644.7 156.9 197.5 290.2

1.2 0.3 0.4 0.5

11.9 7.6 11.1 15.5

6.9 4.7 6.9 8.7

16.2 27.2 9.8 13.8

7.8 15.8 4.3 5.1

49.2 31.9 33.5 75.8

54,888.8

100.0

9.8

4.7

12.9

4.4

32.8

Black Black-Caribbean Black-African Black-other South Asian Indian Pakistani Bangladeshi Chinese and others Chinese Other-Asians Other-other Entire population

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Table I. Ethnic groups in Great Britain 1991

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Table I also shows distinctive self-employment rates, in which ethnic minorities contrast strongly with whites, though this time in two directions, with South Asians and Chinese strikingly over-represented in self-employment and black groups equally under-represented. The self-employed with employees category is thought by Owen (1997) to be the better indicator of business activity because many of those without employees are only nominally self-employed as a cost reduction tactic in relation to tax and social security contributions. Whatever the truth of this judgement, and it probably differs from sector to sector, the relative positions of the broad ethnic categories are the same: South Asians highest; then Chinese and others; then whites; and finally, the black group. Detailed rankings change, however, when the more precise groups are considered. The Chinese and Bangladeshis rank higher in the self-employed with employees category than they do among all selfemployed; this is probably due to their concentration in the restaurant trade, which usually requires more labour than that from the immediate family (Ram et al., 2000). This entrepreneurial gap between whites, blacks and Asian groups brings us to the battlefield contested by those who explain ethnic entrepreneurialism in terms of socio-economic embeddedness and those who insist on an ethnocultural interpretation. The former viewpoint is encapsulated in the claim that it ‘‘. . . was racism and economic decline, not cultural flair, that pushed many Asians into self-employment’’ (Ram, 1992, p. 603). For most South Asians, primary migration took them into low paid employment in industries like textiles and engineering, destined to suffer widespread restructuring and job loss, which provided a powerful incentive to self-employment ( Jones et al., 1989), as did job losses in public services, another immigrant specialism, victim of merciless Thatcherite cuts in the 1980s. This connection between rising unemployment and rising self-employment has also been argued to apply throughout the general population irrespective of ethnicity (Storey and Johnson, 1987), suggesting that ethnic self-employment is perhaps an aggravated, racialised variation on a universal theme. When we consider the contrasts between Britain and its European neighbours, the need for this contextual perspective becomes all the more urgent. Ethnic minority entrepreneurial self-employment rates in Britain tend to be significantly higher than those of immigrants in continental Europe, a highly distinctive gap which surely cannot be explained purely as a product of ethno-cultural disparities, such as between Moroccans in Austria and Indians in Britain. It is much more likely to stem from decisive differences in politicolegal regimes (Barrett et al., 2001) and economic structural conditions. Focusing purely on the latter, we would need to draw attention to factors such as the much greater socio-economic inequality which prevails in Britain, in itself a racialised process in which ethnic minorities have been heavily overrepresented among the impoverished (Berthoud, 1997). For some groups, this differential persists markedly, with mid-1990s family incomes for PakistanisBangladeshis estimated to be around 40 per cent less than their white

counterparts (ISEC, 1998). When we also take account of their predominantly inner city residential location within the most deindustrialised, deprived and socially excluded areas of the nation, we can appreciate that entrepreneurship presents both an attractive and a daunting career prospect – attractive because of the sheer paucity of viable livelihood opportunities, and daunting because of the poverty of entrepreneurial resources. Historically, these inner urban ethnic minority entrepreneurs have been compelled to battle against such barriers as poor access to credit facilities, an impoverished customer base, out-dated, rundown premises and, because they are often operating in insecure crime-ridden environments, expensive insurance cover ( Jones et al., 1989). In a formal sense too, these entrepreneurs might be considered among the least well equipped in terms of personal resources and human capital to deal with such environmental hazards; in the case of working age Bangladeshis, for example, 34 per cent are classed as unskilled and 49 per cent are without a recognised qualification (Sly et al., 1998). As we shall see in the next section, all this has serious repercussions on the quality of ethnic enterprise, not least on the range of possible activities. Conditions in Britain are conducive to producing quantity but not quality of ethnic minority business. Against this, however, it is claimed that South Asian entrepreneurialism stems from culturally-specific entrepreneurial values combined with ‘‘privileged access’’ (Watson et al., 2000, p. 72) to ethnic communal resources (Basu, 1998; Metcalf et al., 1996; Srinivasan, 1995; Werbner, 1984), values and resources presumed lacking among Caribbeans, Africans and the white majority. South Asians have been seen as embodying the ‘‘enterprise culture’’ promoted during the 1980s as part of the Thatcherite project to reinvent entrepreneurialism as national economic salvation (Keat and Abercrombie, 1991). With regard to ethnic resources, when we take into account the personal challenge of the shift from employment to self-employment (Bogenhold and Staber, 1993; Granger et al., 1995), family and community support networks are clearly advantageous. Even so, it seems risky to attribute such endowments entirely to specific groups. Yet, if anything, the chorus of voices arguing for this ethnic particularism became even more deafening during the 1990s, with Modood (1998, p. 53) insisting that ‘‘economic differences between migrants have become much more pronounced’’ and Metcalf et al. (1996) claiming that Indians are decisively more entrepreneurially progressive than other South Asian communities. East African Indians continue to be singled out as the most over-achieving of all immigrant groups, their economic prowess lauded as ‘‘rapid and impressive’’ (Mattausch, 1998, p. 135). Similarly, the Chinese are spotlighted (Cheng, 1996), although their high self-employment rate is explicable by their concentration in catering, with its proliferation of independent outlets. The ethnic-specific perspective is contested by those who maintain that these inter-ethnic differences are not only over-argued empirically but also socially divisive ( Jones et al., 1997; Ram et al., 2000). As Merrifield (1996, p. 201) puts it, ‘‘the reification of difference forecloses potential commonality and kinship’’. For all these objections, the cultural approach continues to pop up in new guises, having

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recently been extended to the examination of transnational linkages (Crang et al., 2000) and the role of post-colonial multiculturalism in creating a local competitive advantage in the global economy (Henry et al., 2000). Sectoral concentrations and embeddedness This emphasis on global activities is clearly glamorous but bears no relation to the mass of ethnic minority enterprise in Britain, existing as it does in what amounts to a parallel universe. It is crucial to note that the main minority groups differ from the white business community not only in their degree of business involvement but also in their concentrated sectoral profiles. From the 1970s, South Asians became widely established in low order retailing, catering and consumer services, though from the 1980s onwards a limited break-out (Ram and Hillin, 1994) occurred into wholesaling and manufacturing (Ram and Jones, 1998; Rhodes and Nabi, 1992; Barrett et al., 1996). More recently there is some evidence of penetration of the new ‘‘informational capitalism’’ (Castells, 2000) in sectors such as electronics and communications aiming at mainstream markets, ‘‘pioneering activity in sectors . . . that have seen no previous ethnic minority firms’’ (Deakins et al., 1997, p. 335). Yet it is important not to become over-excited about this since, as Deakins et al. (1997, p. 35), themselves remind us, ‘‘breaking into new markets is particularly daunting’’ and, therefore, likely to be restricted to a few exceptionally well-resourced individuals. Hence the essential characteristic of South Asian business continues to be specialisation in a relatively narrow range of low order activities. In the Chinese case, business ownership is even more skewed, towards the restaurant and ‘‘takeaway’’ food sectors (Chan and Chan, 1997; Song, 1997a, b). Among the less numerous African and Caribbean businesses, sectoral restriction is again the keynote, with retailing, catering and consumer services dominant, the latter being particularly prominent in comparison with other groups. It is worth emphasising that these characteristic ethnic minority sectors are highly labour intensive and usually provide only lean rewards. It is a moot point whether the long working hours recorded by Asian owners result from an in-built work ethic or from the nature of the sectors into which they are clustered ( Jones et al., 1994a). This powerful and seemingly persistent confinement of immigrant-origin enterprise within a narrow range of generally poorly endowed markets is one of the cardinal issues to be addressed, since it signals that ethnic enterprise is embedded in a socio-economic context hostile to its unconstrained development. In addition to the universal competitive disadvantages of the small self-employed (Bogenhold and Staber, 1993), and the falling relative earnings of self-employment in Britain (Robson, 1997), there are specific constraints arising out of racist processes, truths that became apparent to some of us two decades ago following the completion of an extensive interview survey of owners or managers of 580 South Asian and white entrepreneurs in Bradford, Leicester and Ealing (London), all major destinations for South Asian immigration (Aldrich et al., 1981). There are significant ethnic variations

between these three localities: Bradford’s Asian population is predominantly Pakistani Muslim; Leicester’s overwhelmingly Gujerati Hindu, many from East Africa; and Ealing’s mostly Punjabi Sikh. There were, however, remarkably few variations in entrepreneurial outcomes between the three cities, with disadvantage the leitmotif in each, irrespective of ethnic identities: heavy concentration in low order retailing; long entrepreneurial working hours producing only poor returns; extensive use of uncosted family labour; and overdependence on low income local Asian customers. With regard to this ethnic minority customer base, we note that immigrantorigin groups in Britain, with the exception of the Chinese, are geographically concentrated in particular regions, with further clustering within the inner urban areas of those regions (Barrett et al., 2001, p. 245). This tendency is most pronounced for South Asians, and our three cities project was purposefully directed at firms in areas with large South Asian populations, where we found that most shops and services were tapping into a co-ethnic market, linked to them by loyalty, proximity and a capacity to provide authentic ethno-cultural specialisms (Aldrich et al., 1984). Despite the protection afforded by these ‘‘ethnic niche markets’’ against non-Asian competition, our verdict was that their restricted market potential imposes a developmental barrier, and that a sustainable future for South Asian enterprise lies in ethnic, spatial and sectoral market re-orientation (Aldrich et al., 1984), a prognostication supported by subsequent research findings ( Jones et al., 2000). Indeed, the situation of those firms remaining in the ethnic enclave market is an eloquent commentary on the way in which ethnic embeddedness ‘‘may limit their economic potential’’ (Watson et al., 2000, p. 72). Consistent with a socio-economic embeddedness perspective, we see ethnic minority market disadvantage compounded by a coalescence of various labour market, capital and competitive pressures. The first generation South Asian entrepreneurialism was rendered problematic by labour market push, with heavy job loss creating a multitude of surplus workers to whom selfemployment offered a last resort survival strategy (Ram, 1992). This process has both quantitative and qualitative aspects. Not only does it throw unfeasibly large numbers of labour market refugees into entrepreneurial competition ( Jones et al., 1989) but it also ensures that many of them are ill-equipped and inappropriately motivated. We concur with Bruderl et al. (1992, p. 229) that ‘‘people with few human capital resources are often forced into selfemployment’’, a comment that tallies well with work on the pitfalls facing working class entrants to self-employment, lacking human and financial capital. Business entrants driven by unemployment may need to rush in without proper evaluation, whereas ‘‘well endowed founders are in a position to select more promising projects’’ (Bruderl et al., 1992, p. 229). For the underendowed entrant, ‘‘force of circumstances pervades’’ (Granger et al., 1995) and any notion of strategic entrepreneurial focus is fanciful. Our three cities businesses represented an aggravated, racialised version of this, placed as they were at the very bottom of the working class by selective recruitment

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procedures, and then disproportionately affected by the subsequent postFordist disemployment (Ohri and Faruqi, 1988). The acid test of any business enterprise is survival, and one of the most rehearsed themes in the field of small business is the tendency for firms to fail during their vulnerable infant phase when they are subject to ‘‘the liability of newness’’ (Singh et al., 1986). To address this question, we introduced a longitudinal element into the three cities project, following up the initial 1978 interviews with later visits in 1980, 1982 and 1984 to establish the survival of the original business, or to identify basic details of successor firms (Aldrich et al., 1989). From this, the following key points emerge (Table II). First, South Asian firms overall survived better than whites, but not in Bradford, nor in the central time period in all three cities (Table II). Second, 53 per cent of white firms changing hands were transferred to other whites, but only 7 per cent of Asian businesses became white. Third, as neighbourhoods became demographically more Asian then the likelihood of a white firm becoming Asian on transfer to a new owner increased. Presumably an ethnic embeddedness perspective would interpret the intercity variation in survival in terms of Bradford’s Islamic business owners being less ‘‘entrepreneurial’’ and less resource-endowed than the other two groups, notably Leicester’s Gujeratis (Mattausch (1998) notes over 100 Gujerati millionaires in Britain by the early 1990s). More obvious, however, were the inter-city economic differences, with Bradford, once the self-proclaimed ‘‘wool capital of the world’’, in the throes of an alarming collapse of its textile mainstay. Although South Asians were entering generally unwanted (because problematic) niches in the economy in all three cities, whites hung on even to difficult businesses in places and times when there are few viable alternatives. Unemployment in Bradford was substantially higher than in the other two locales, and higher in 1980-1982 than the periods before and after. We acknowledge, however, that ethnic embeddedness may play some part in explaining the greater Asian capacity for survival in the other two cities, notably the availability of family members to support ‘‘flexible’’ working practices. Non-market family values can indeed support a remarkable degree of commercial resilience ( Jones and Rose, 1994). Even so qualification is required. In particular, the concept of flexibility, much lauded by neo-liberal commentators, is now under increasing attack by those who see it as an

Year 1978-1980 1980-1982 1982-1984 1978-1984

Per cent surviving South Asian White Bradford Leicester Ealing All cities Bradford Leicester Ealing All cities 85 60 71 38

78 78 87 58

90 76 88 62

84 71 83 52

71 69 66 39

66 81 70 38

Table II. Business survival rates by city and ethnicity of Note: The six-year rates are not the product of the three two-year rates owner

64 81 73 41

67 77 70 39

ideologically-loaded euphemism for sweated self-exploitation (Holliday, 1995). We note the shrewd comment of Westergaard (1995) that in capitalist society hard work is always promoted as a virtue, while the greatest rewards go to those who do no work at all in the accepted sense. Consistent with this logic our own findings suggest that the best performing Asian entrepreneurs are those who work smart rather than hard ( Jones et al., 1994a). Moreover, much labour intensiveness is based on traditionalist patriarchal practices, once glossed over by many scholars in a spirit of multiculturalist deference, but now questioned by writers aware of the tension between ‘‘the goal of gender equality and greater accommodation for ethnic, religious and national minorities’’ (Deveaux, 2000, p. 522; see also Phizacklea and Wolkowitz, 1995). By analogy, the process of inter-ethnic business transfer is aptly described by the traditional urban concept of ecological succession, usually applied to population transitions (Aldrich et al., 1989). Judging by Rafiq’s (1985) findings in Bradford, ecological succession was proceeding at a rapid pace, with the number of Asian-owned businesses in the city swelling by more than 10 per cent per annum during most of the 1970s. This seemingly successful business succession by Asian entrepreneurs was, however, largely confined to low order retailing and consumer services, which is highly indicative of the inhospitality of the socio-economic environment in which the ethnic entrepreneur is embedded. Just as ethnic minority labour was originally imported to prop up declining industries, so ethnic minority owners gravitate towards the next generation of ‘‘sunset’’ sectors squeezed by restructuring: not so much a case of upward mobility, more a horizontal shift from submerged working class to submerged petty bourgeoisie. No sector can have been harder hit in this respect than the ethnic minority specialism of small food retailers, victim of an inexorable trend towards industrial concentration, which by 1992 had seen 66 per cent of national grocery sales accounted for by the five largest supermarket chains (CIR, 1995). The effect of this on small grocery shops has been truly calamitous, their numbers falling from 43,396 in 1980 to 18,557 in 1992 (CIR, 1995), the very period in which Asian entry into retailing was probably at its height. Little imagination is required to picture the struggle for survival in this imploding area of the economy and, when we revisited Bradford in 1988 to reinterview over 100 South Asian retailers, we found them to be bearing an average 73.5 hour working week for a gross return of just £1,106 ( Jones et al., 1989). All this is a vivid example of market saturation, the inevitable outcome of expanding numbers of business entrants converging on rapidly contracting business opportunities, their entry encouraged by the alacrity of the white shopkeeper exodus. Diversification and break-out The three cities’ findings are, of course, coloured by time and place, a snapshot of Asian entrepreneurialism in the first generation of development in unpromising, quasi-ghetto locations. Accordingly, in our 1990 nationwide survey ( Jones et al., 1992), we assumed a priori that substantial evolution

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would have taken place, that increasing numbers of ethnic minority firms would have broken out of the market strait-jacket. In the South Asian case it would be expected that, with the coming of a British-born generation, problems like language barriers may have eased and that an accumulation of financial and human capital would have allowed more firms to relocate in better rewarded sectors serving mainstream markets. Moreover, market niches arguably ideally suited to ethnic minority enterprise became greatly expanded from the 1980s onwards (Sassen, 1991). In response to this and in order to accommodate the range of market possibilities open to ethnic minority business, we interviewed South Asian firms in 11 local government wards (ten to 20,000 residents) located in the North, Midlands and South East of England. Recognising the salient influence of geographical location on market potential, we selected only three wards in the type of Asian residentially dominated areas that had defined the three cities survey, the remainder being either in areas adjacent to Asian residential concentrations or completely remote from them (Table III). The objective was to pick up retail and service firms that had relocated into mainly white suburban locations (Ward, 1985) or had moved into activities like manufacturing, whose customer base is not place-specific. In this way we spanned a range of market types extending from poor residentially segregated wards like Batley East in deindustrialised West Yorkshire, to prosperous growth centres such as Swindon in the dynamic M4 corridor, to rural Shropshire on the Welsh border. Alongside this, we also recognised the emergence of black-Caribbean enterprise, conducting interviews with 65 such firms located in four regionally dispersed wards with substantial blackCaribbean populations. As we had done in the three cities survey, we also Percentage of minority businesses in named sector Black Caribbeans South Asians South Nearby Distant white white Asian Black Caribbean All areas areas areas areas areas Food retailers Confectioners, tobacconists and newsagents (CTNs) Clothing retailers Other retailers Catering trade Other consumer services Wholesaling and manufacturing Other Total

Table III. The sectoral distribution of ethnic minority business in England

Number of minority firms Named minority share of all local businesses Source: Jones et al. (1992)

23.5

23.6

21.8

28.1

20.0

2.9 1.5 16.2 19.1 23.5 2.9 10.3 99.9

11.3 16.1 18.2 14.5 11.1 3.5 1.7 100.0

4.9 21.5 21.1 14.7 11.7 1.6 2.6 99.9

25.2 5.0 13.7 9.4 10.8 7.9 0.0 100.1

13.3 6.7 0.0 60.0 0.0 0.0 0.0 100.0

65

461

11.2

23.0

307 41.5

139 20.1

15 2.6

interviewed a white control sample in each of the 15 locations, a distinctive and highly important research element, which guards against attributing ethnic specificity to characteristics which are shared by entrepreneurs of all origins including whites (Ram et al., 2000). While our assumptions about increasing sectoral diversity are not altogether without foundation (Table III), it must be said that penetration of sectors other than low order retailing and consumer services remains strictly limited, especially for black Caribbeans, most of whom are accounted for by the sectors which have traditionally harboured the bulk of their businesses. Moreover, black-Caribbean concentration is actually greater than the categories in the table reveal. Within three of the four most common types of black-Caribbean firm particular specialities have a prominent place, with recorded music stores easily the most common sub-type of other retailer, cafe´s characteristic within the catering trade, and hairdressers the most numerous category of other consumer service. Each of these trades clearly relates to particular aspects of black-Caribbean culture and we can characterise them as catering for a protected market or ethnic niche. With few exceptions entrepreneurs of other ethnicities are not credible purveyors of these culturally-specific needs of the black-Caribbean population. It would not be unfair to describe the development of business in this community as narrow and limited. This is partially explicable in terms of recentness and immaturity, but undoubtedly also reflects the unfair disabilities faced by many black Caribbeans in raising capital. In contrast, the range of South Asian activities is fairly broad and extensive, though still skewed towards a few activities which have become tried and trusted Asian classics. Except for the two final categories in the table, there are many instances of each type of firm, although with considerable variations according to spatial category. One notable feature is the colonisation by food shops and confectioners, tobacconists and newsagents (CTNs) of nearby white areas, a fairly straightforward instance of what we have called ‘‘horizontal’’ break-out ( Jones et al., 2000), that is relocation in mainstream white markets, but remaining within low order activities demanding ‘‘flexibility’’ in the form of vast labour inputs for low returns ( Jones et al., 1994a). Indeed, it is probable that this new white orientation exacts an extra toll, because, ‘‘We have to be twice as good as white people to survive’’, in the words of one aggrieved shopkeeper quoted in the national press. What we are witnessing in the food sector is an extended proliferation of Asian outlets in a rapidly shrinking sector, the take-up of abandoned opportunities rather than the penetration of an advantageous niche. With regard to CTNs the picture differs only insofar as this type of activity has actually enjoyed a very slight increase in the number of independent firms (CIR, 1995), but this should not be allowed to obscure the lengthy and unsocial working hours demanded. Rather more promising is the revelation that more than a third of South Asian firms are now engaged in higher order retailing activities. Particularly intriguing is the catch-all category other retailers, which contains a few of the most successful Asian firms in the sample, firms which show signs of

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benefiting from factors of production other than sheer labour power. Here we draw particular attention to pharmaceutical retailing (popularly ‘‘chemists’’), which since the 1980s has become a new Asian specialism, so much so that the immediate past president of the Royal Pharmaceutical Society is a Patel (Lewis, 2001), the most common Gujerati family name. Happily for its Asian owners, pharmacy is a line in which rewards are largely derived from human capital (a pharmacy degree) instead of long hours ( Jones et al., 1994a). Hakim (1998) makes the point that, unlike many other well rewarded sectors, pharmacy is remarkably open to newcomer groups, with a relatively short training period, fairly quick returns importantly underwritten by National Health Service dispensing and few entrenched professional barriers. In pharmacy there is also an established practice of bank loans guaranteed by pharmaceutical wholesalers, a vital contribution obviating the often insurmountable barrier of raising start-up capital. Nevertheless, a question mark hovers over the longterm prospects of independent pharmacies, with the number of firms in the trade falling from 8,458 to 7,560 over the 1980-1992 period, mainly as a result of increasing penetration by pharmacy chains and supermarkets, with CIR (1995) identifying pharmacy as one of the retail branches in which corporate penetration is most advanced. A recent news item claims, ‘‘The future of the local chemist’s shop has never looked bleaker’’ (Lewis, 2001). Also well represented among South Asians are clothing retailers; this is a historically established Asian line dominated by outlets selling items of traditional South Asian women’s dress. Equally traditional is its location, concentrated in neighbourhoods of co-ethnic population (Table III). It thus suffers from all the limitations of this market space. The main exceptions to this tendency are certain shops in areas like Northcote ward (London Borough of Ealing) which attract Asian customers from a wide hinterland and hence are able to cash in on unbounded market potential. Northcote is the extreme UK case of residential segregation, 90 per cent of residents being from ethnic minorities, and 67 per cent being Indian. There is a proliferation of Asian firms orientated to this local co-ethnic market, including firms renting videos or selling books in South Asian languages. There are also non-culturally specific general purpose shops trading on sheer proximity to communities with highly protective attitudes to women, where shopping locally may be the only option for many. Even with a captive market, however, the level of dissatisfaction with profits and incomes was highest among owners tied to this local co-ethnic clientele ( Jones et al., 1992, 2000). However, the very size and variety of this retail agglomeration also attracts Asians wishing to purchase comparison goods from a very wide area of South East England. In addition to clothing retailers, other high order specialisms like jewellery also benefit from this relationship and, as with firms of any ethnic identity, those operating at a nonlocal scale thrive better than those tied to neighbourhood markets (Bruderl et al., 1992), so this is essentially another Asian variation on a universal trend. Clearly the changes generated by post-Fordist restructuring are at best mixed in their impact on ethnic minority small retailers, an observation vividly

illustrated by changes in national food consumption patterns. While food retailers have suffered, other entrepreneurs have benefited, as expenditure on food consumed outside the home soared from 25 per cent to 40 per cent of total household food spending in the decade 1986-1996. Most germane for us is the powerful tendency for ‘‘ethnic’’ eating out to take an ever-increasing slice of this burgeoning market, growing over 60 per cent faster than total eating out 1994-1998 (MAFF, 1998), with South Asian and Chinese restaurateurs in the vanguard of this ‘‘exotic’’ catering trade. Ostensibly, the restaurant trade offers one of the most promising market niches for ethnic minority enterprise, its strength deriving in part from its peculiarly advantageous form of mixed embeddedness. On the supply side, it is strongly ethnically-embedded, since its purpose is to purvey food, indeed a whole leisure experience (Beardsworth and Bryman, 1999), derived directly from its heritage culture. Hence, there is a premium on highly specific communal resources such as ethnic chefs and food suppliers in order to affirm the authenticity of the product (Liu and Fine, 1995). On the demand side, however, the customer base is predominantly and increasingly non-ethnic, as suggested in Table III by the prominence of South Asian restaurants in non-Asian areas. This results partly from an orientation towards new markets created by changes in British eating-out behaviour, themselves the result of cultural and socio-economic changes common to most advanced capitalist societies (Warde et al., 1999). Ethnic minority caterers thus enjoy all the virtues of market protection without any of the vices of market limitation. Moreover, despite creeping ‘‘McDonaldisation’’ (Beardsworth and Bryman, 1999), the essential consumer requirements of variety and choice demand a vast plethora of independently owned outlets, in itself a powerful deterrent to penetration by monopoly capital. In reality, however, as recent research on restaurants in Birmingham demonstrates, catering is a highly problematic activity for many South Asians, suffering from an advanced form of market saturation and hyper-competition (Ram et al., forthcoming). Given the apparently insatiable growth in the public appetite for ‘‘exotic’’ eating-out, this appears highly paradoxical, though a closer look at the dynamics of entrepreneurial supply and consumer demand can help resolve the contradiction. In the Birmingham case, it can be inferred from extremely high and persistent rates of ethnic minority unemployment that there is considerable labour market push towards self-employment, thus contributing to excessive numbers of would-be restaurateurs, especially among South Asians, drawn to ostensibly rich pickings in an easy-to-enter sector (Ram et al., 2000). On the demand side, ethnic caterers are at the mercy of postmodernism at its most ineffably vacuous, a world of ‘‘real virtuality . . . in which symbols are not just metaphors but comprise the actual experience’’ (Castells, 2000, p. 381) and ‘‘quasification’’ (Beardsworth and Bryman, 1999), in which tangible values like high quality food and service and value for money count for less than the imperatives of ‘‘cultural signification’’. Less an eating house than an interactive theatre in which to participate in a dramatic spectacle, the ethnic restaurant is at the mercy of what Warde et al. (1999) call

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‘‘omnivorous diners’’, affluent and pretentious trend-setters relentlessly picking and mixing the infinite variety of culinary themes on offer to ensure sending the correct cultural signals to their social audience. The ethnic restaurant is part of what amounts to a food tourist industry and, as such, reliant on a highly unstable, fickle and constantly shifting customer base. In the Birmingham sample the most successful operators were those who, by conscious attention to theming and location, had managed to differentiate and distance themselves from the competition (Ram et al., forthcoming). This finding relates directly to the argument that there is a potent spatial dimension within socio-economic embeddedness, a highly uneven pattern of market opportunities within the urban space economy (Rekers and van Kempen, 2000). Essentially, the more successful restaurateurs have advantageously repositioned themselves within this opportunity space. We must, however, recognise that such proactive marketing strategies are not open to all. Necessary though such entrepreneurial vision may be, it is not sufficient, since it requires capital beyond the dreams of all but a handful of ethnic minority businesses. Capital and class resources This last observation brings us to a theme frequently hinted at above, the widespread lack of capital, which probably contributes more than any other factor to denying most ethnic minority firms entry to less crowded market opportunities. Access to finance is one of the most challenging problems in the ethnic minority firm’s socio-economic environment. Two decades ago, Ward and Reeves (1980) noted the operation of discriminatory barriers within the banking industry. Subsequent authors (Barrett, 1999; Deakins et al., 1995; Jones et al., 1989) have documented the persistence of widespread institutional racism in the credit market ( Jones et al., 1994b), together with a common perception on the part of alienated customers that British commercial banks are run by whites for whites. Essentially the relationship between banks and ethnic minority business customers is racialised on more than one level: in addition to direct stereotyping which denies financial credibility to ‘‘non-white’’ applicants, there is also the contextual consideration that ethnic minorities have been sifted into disadvantageous class and geographical locations and so suffer from ‘‘limited equity in personal or business property’’ (Deakins et al., 1997, p. 95). These authors find little more than a quarter of their interviewees expressing satisfaction with their bank (Deakins et al., 1997). Unable or unwilling to obtain mainstream finance, many firms are selffinanced and, despite the argument that ethnically-embedded groups can rely on communal resources, these are usually sufficient to finance entry into only low threshold sectors ( Jones et al., 1994b). We concur with Watson et al. (2000) that over-reliance on informal ethnic resources can act as a brake on development. This link between access to capital and access to markets is most emphatic for black Caribbeans, who not only complain more frequently – and bitterly – than any other group about bank racism (Barrett, 1999) but are also the most sectorally restricted. We are not, however, dealing with a completely

static pattern and one of the most instructive findings from our national survey was that South Asians were using bank finance, both for start-up and subsequent development, more frequently even than white owners, tentatively suggesting that their revised stereotype as a highly entrepreneurial group with a positive collective track record had given them some credibility with the banking community ( Jones et al., 1994b). From a shifting embeddedness perspective, we might argue that this represents a relocation from ethnic to external mainstream resources. Against this, however, we also found that bank funding access was far easier for those in the kind of low order activities with which Asian enterprise has become historically associated, so that those pioneers who had dared to move into uncharted territory continued to experience the same resistance as ever. This was especially so for manufacturers and Table III confirms that, whether Caribbean or Asian, these are extremely thin on the ground. Moreover, in the Asian case, clothing manufacture accounted for the bulk of these, in itself no surprise since garment manufacture has long been the classic immigrant enterprise in Britain and elsewhere (Waldinger, 1996) on account of its ease of entry in comparison with most other manufacturing sectors. According to Watson et al. (1999), there is a universal under-representation of ethnic minority enterprise in manufacturing, a pattern explicable almost entirely with reference to problems of capitalisation: compared with most service businesses manufacturing requires greater amounts of start-up funding with higher risk involved. However, the clothing industry subverts these criteria, being relatively low technology-based and having a tradition of supplier credit to manufacturers which, given that in Britain many of the suppliers are themselves Asian, represents a continuance of ethnic embeddedness by other means ( Jones et al., 1989; Werbner, 1984). Furthermore, the nature of the production process means that some costs can be unloaded onto the workforce, especially co-ethnic female outworkers using their own machines in their own workspace (Phizacklea and Wolkowitz, 1995). These authors indicate that, in the light of factors such as racism in the labour market, lack of child care and restrictions on Muslim women’s mobility, this amounts in some respects to a virtually captive labour force. Whatever the reasons, the handful of manufacturers in our sample tend, along with high order retailers, wholesalers and exporters, to be among the more successful firms. Operating in relatively unbounded markets, they earn better returns than most, they are often growth oriented, they are more likely to employ more than a handful of workers and their proprietors tend to be genuine owner-managers working tolerable hours rather than self-employed workers toiling round the clock for brute survival. Like many of the other high order entrepreneurs, they also tend to be better endowed with human capital, defined by Bruderl et al. (1992) not only as educational qualifications but also business family background and relevant previous career experience. For us this gradual accumulation of class resources by certain South Asian groups, and by the Chinese (Cheng, 1996), holds perhaps more hope for future

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Table IV. Selected wards 1989 and 1999: South Asian businesses

entrepreneurial progress than any other development. As Bruderl et al. (1992) remind us, it is those sectors requiring expertise, knowledge and the other expressions of human capital which yield the highest returns. They also argue that human capital may be a means of unlocking financial capital, in that those with human capital may be able to earn and save more prior to business entry, and are also more likely to possess the communications skills and confidence to successfully present proposals to their bankers. Will such developments in practice unlock the door to more spacious and sustainable markets? A partial and rather mixed answer to this query is provided by our recent study of business change in two adjacent but sharply contrasting wards in the West Yorkshire district of Kirklees: Batley East, a deprived area which had become 33 per cent Asian by 1991; and Birkenshaw and Birstall, a 98 per cent white area of expanding suburban villages. As Table IV shows, Batley East had already built up a sizeable Asian-owned sub-economy by 1989 (McGoldrick and Reeve, 1989), its sectoral profile absolutely archetypal in its domination by food and other branches of retailing. Given the tendency elsewhere for horizontal break-out, we would have expected to find a subsequent spillover of retailing into the adjacent white area. The number of Asian-owned businesses, predominantly retailers, has however remained absolutely static in Birkenshaw and Birstall. Somewhat surprisingly, against the prevailing local tide of deindustrialisation, the major change has been a tripling of the number of Asian manufacturing firms in Batley East, almost all in furniture manufacture, mostly making beds, bedding and related products, a literal example of ‘‘embeddedness’’, we might mischievously suggest. Ostensibly, this somewhat unexpected development is the very embodiment of break-out as envisaged by Ram and Hillin (1994). This is a growing manufacturing sector, which gives the Batley entrepreneurs access to national scale markets, with deliveries as far afield as South-East England, Wales and Scotland. Consequently, it presents the opportunity to operate at a greater scale than most ethnic minority entrepreneurs, with considerable numbers of employees mostly from the local Asian communities. We seem to be witnessing here the emergence of a veritable South Asian industrial district, growing by

Retail food Retail non-food Services Manufacturing and construction Wholesale Missing data Total

1989 Birkenshaw and Batley East Birstall n (%) n (%)

1999 Birkenshaw and Batley East Birstall n (%) n (%)

25 18 20

33.3 24.0 26.7

10 3 3

58.9 17.6 17.6

20 21 28

20.2 21.2 28.3

7 5 4

41.2 29.4 23.5

9 2 1 75

12.0 2.7 1.3 100.0

1 0 0 17

5.9 0.0 0.0 100.0

26 3 1 99

26.3 3.0 1.0 100.0

1 0 0 17

5.9 0.0 0.0 100.0

repeated spin-offs from earlier firms, beginning with the local plant of a national manufacturer. Informal contact with employees in the South Asian bed-making industry suggests that its attraction for Asian enterprise is, once again, its ease and cheapness of entry, and that it represents yet another case of saturation and hyper-competition, with new entrants crowding into what is ultimately a finite market – even at the national scale, the British need for new beds must surely have some upper limit. As in so many other Asian specialisms, survival here is only sustainable on the back of co-ethnic labour working at or near the minimum wage. Conclusion We have seen that much ethnic minority business appears to have grown in circumstances of urban and economic adversity. Indeed, a good deal of the growth may actually be stimulated by the absence of opportunities for the talents of potential entrepreneurs in the mainstream job market. The variety of business activities varies both by ethnic group and, as far as South Asians are concerned, by the proportion of the minority in the local population. In itself this is a reflection of their ethnic embeddedness, a close dependence on community linkages which is as much problematic as beneficial. In times and places where economic circumstances are worst, business survival is lowest, and since ethnic minorities typically reside in deprived areas the risk for their firms is clear. On the other hand it is possible to find flowers blooming in the desert of urban dereliction, as with manufacturing growth in Batley, although as we have seen even this may be a mixed blessing. There are definite echoes of this ambiguity in the case of Birmingham’s restaurants, where entrepreneurs are undoubtedly taking advantage of opportunities created by social trends but simultaneously subject to acute competitive stress. While at the level of the sector as a whole growth may be impressive, at the level of the individual enterprise the situation may be of unceasing effort in the face of grinding competitive pressure from the multiplicity of similar firms, and/or from large corporate enterprise, with restaurants suffering more from the former, retailers and manufacturers more from the latter. The demographic situation, the state of the local or regional economy, the direct competitive environment and the relationship with financial institutions are all factors in the socio-economic embeddedness of minority enterprise. Scholars will find similarities, if not precise parallels, between the British situation we have described and the situations they are familiar with in other countries. Nevertheless, a full explanation of why the British situation differs from that elsewhere lies outside the scope of the present paper. The size of minorities is governed by the past and current control of immigration; geographical variations in economic welfare depend on national and governmental responses to trends of internationalisation and globalisation; the extent of competitive pressures may be governed by the degree of credentialism and regulation at work in the industry or place in question. In the context of the European Union, the UK’s slowness to embrace convergence

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with the practices and rules favoured by other member states may explain much of any distinctiveness the British situation may display. Economic embeddedness will be more fully explained when the politico-institutional side of mixed embeddedness has been considered. References Aldrich, H.E., Cater, J.C., Jones, T.P. and McEvoy, D. (1981), ‘‘Business development and selfsegregation: Asian enterprise in three British cities’’, in Peach, C., Robinson, V. and Smith, S. (Eds), Ethnic Segregation in Cities, Croom Helm, London, pp. 170-90. Aldrich, H., Jones, T. and McEvoy, D. (1984), ‘‘Ethnic advantage and minority business development’’, in Ward, R. and Jenkins, R. (Eds), Ethnic Communities in Business, Cambridge University Press, Cambridge, pp. 189-210. Aldrich, H., Zimmer, C. and McEvoy, D. (1989), ‘‘Continuities in the study of ecological succession: Asian businesses in three British cities’’, Social Forces, Vol. 67 No. 4, pp. 920-44. Barrett, G.A. (1999), ‘‘Overcoming the obstacles? Access to bank finance for African-Caribbean enterprise’’, Journal of Ethnic and Migration Studies, Vol. 25 No. 2, pp. 303-22. Barrett, G.A., Jones, T.P. and McEvoy, D. (1996), ‘‘Ethnic minority business: theoretical discourse in Britain and North America’’, Urban Studies, Vol. 33 Nos 4-5, pp. 783-809. Barrett, G.A., Jones, T.P. and McEvoy, D. (2001), ‘‘Socio-economic and policy dimensions of the mixed embeddedness of ethnic minority business in Britain’’, Journal of Ethnic and Migration Studies, Vol. 27 No. 2, pp. 241-58. Basu, D. (1998), ‘‘An exploration of entrepreneurial activity among Asian small businesses in Britain’’, Small Businesses Economics, Vol. 10, pp. 313-26. Beardsworth, A. and Bryman, A. (1999), ‘‘Late modernity and quasification: the case of the themed restaurant’’, Sociological Review, Vol. 47 No. 2, pp. 228-57. Berthoud, R. (1997), ‘‘Income and standard of living’’, in Modood, T., Berthoud, R., Lakey, J., Nazroo, J., Smith, P., Virdee, S. and Beishon, S., Ethnic Minorities in Britain: Diversity and Disadvantage, Policy Studies Institute, London, pp. 150-83. Bogenhold, D. and Staber, U. (1993), ‘‘Self-employment dynamics: a reply to Meager’’, Work, Employment and Society, Vol. 7 No. 3, pp. 465-72. Brah, A. (1996), Cartographies of Diaspora, Routledge, London. Bruderl, J., Preisendorf, P. and Ziegler, R. (1992), ‘‘Survival chances of newly founded business organizations’’, American Sociological Review, Vol. 57 No. 2, pp. 227-42. Castells, M. (2000), End of Millennium, Blackwell, Oxford. CIR – Corporate Intelligence on Retailing (1995), Retailing in Europe: the United Kingdom, CIR, London. Chan, Y.M. and Chan, C. (1997), ‘‘The Chinese in Britain’’, New Community, Vol. 23 No. 1, pp. 123-31. Cheng, Y. (1996), ‘‘The Chinese: upwardly mobile’’, in Peach, C. (Ed.), Ethnicity in the 1991 Census. Volume Two. The Ethnic Minority Populations of Great Britain, HMSO, London, pp. 161-80. Collins, J., Gibson, K., Alcorso, C., Castles, S. and Tait, D. (1995), A Shop Full of Dreams. Ethnic Small Business in Australia, Pluto Press, Leichhardt. Crang, P., Dwyer, C., Prinjha, S. and Jackson, P. (2000), ‘‘Transnational communities and spaces of commodity culture’’, paper given at the Annual Conference of the Royal Geographical Society (with the Institute of British Geographers), University of Sussex, January.

Deakins, D., Majmuda, M. and Paddison, A. (1997), ‘‘Developing success strategies for ethnic minorities in business: evidence from Scotland’’, New Community, Vol. 23 No. 3, pp. 325-42. Deveaux, M. (2000), ‘‘Conflicting equalities? Cultural group rights versus sex equality’’, Political Studies, Vol. 48 No. 3, pp. 522-39. Granger, B., Stanworth, J. and Stanworth, C. (1995), ‘‘Self-employment career dynamics: the case of unemployment ‘push’ in UK book publishing’’, Work, Employment and Society, Vol. 9 No. 3, pp. 499-516. Hakim, C. (1998), Social Change and Innovation in the Labour Market, Oxford University Press, Oxford. Henry, N., Bryson, J., McEwan, C. and Pollard, J. (2000), ‘‘Globalisation from below: Birmingham – postcolonial workshop of the world’’, paper given at the Annual Conference of the Royal Geographical Society (with the Institute of British Geographers, University of Sussex, January. Holliday, R. (1995), Investigating Small Firms: Nice Work?, Routledge, London. ISEC – Institute for Social and Economic Research (1998), The Incomes of Ethnic Minorities, Research Report 98-1, University of Essex, Colchester. Jones, G. and Rose, M. (Eds) (1994), Family Capitalism, Cass, London. Jones, T., Barrett, G. and McEvoy, D. (2000), ‘‘Market potential as a decisive influence on the performance of ethnic minority business’’, in Rath, J. (Ed.), Immigrant Businesses: The Economic, Political and Social Environment, Macmillan, Basingstoke, pp. 37-53. Jones, T., Cater, J., De Silva, P. and McEvoy, D. (1989), Ethnic Business and Community Needs, Report to the Commission for Racial Equality, Liverpool Polytechnic, Liverpool. Jones, T., McEvoy, D. and Barrett, G. (1994a), ‘‘Labour intensive practices in the ethnic minority firm’’, in Atkinson, J. and Storey, D. (Eds), Employment, the Small Firm and the Labour Market, Routledge, London, pp. 172-205. Jones, T., McEvoy, D. and Barrett, G. (1994b), ‘‘Raising capital for the ethnic minority small firm’’, in Hughes, A. and Storey, D. (Eds), Finance and the Small Firm, Routledge, London, pp. 145-81. Jones, T.P., McEvoy, D. and Barrett, G.A. (1992), Small Business Initiative: Ethnic Minority Business Component, End of Award Report W108 25 1013 to the Economic and Social Research Council, Liverpool John Moores University, Liverpool. Jones, T.P., Barrett, G.A. and McEvoy, D. (1997), ‘‘Universalism versus particularism in ethnic minority business study’’, paper prepared for conference on South Asian entrepreneurship, University of Reading, Reading. Keat, R. and Abercrombie, N. (Eds) (1991), Enterprise Culture, London, Routledge. Kloosterman, R., van der Leun, J. and Rath, J. (1999), ‘‘Mixed embeddedness: (in)formal economic activities and immigrant businesses in The Netherlands’’, International Journal of Urban and Regional Research, Vol. 23 No. 2, pp. 252-66. Leslie, D., Drinkwater, S. and O’Leary, N. (1998), ‘‘Unemployment and earnings among Britain’s ethnic minorities: some signs for optimism’’, Journal of Ethnic and Migration Studies, Vol. 24 No. 3, pp. 489-506. Lewis, R. (2001), ‘‘Rewriting the script’’, The Guardian, 17 January. Light, I. and Rosenstein, C. (1995), Race, Ethnicity and Entrepreneurship in Urban America, Aldine de Gruyter, New York, NY. Liu, S. and Fine, G. (1995), ‘‘The presentation of ethnic authenticity: Chinese food as a social accomplishment’’, Sociological Quarterly, Vol. 36 No. 3, pp. 535-53. MAFF (Ministry of Agriculture, Fisheries and Food) (1998), National Food Survey, HMSO, London.

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Mattausch, J. (1998), ‘‘Subjects to citizens: British ‘East African Asians’’’, Journal of Ethnic and Migration Studies, Vol. 24 No. 1. McGoldrick, C. and Reeve, D.E. (1989), ‘‘Black business in Kirklees: a survey of Afro-Caribbean and South Asian businesses in the Kirklees Metropolitan District’’, report prepared for the Employment Development Unit, Kirklees Metropolitan Council, Huddersfield Polytechnic, Huddersfield. Merrifield, A. (1996), ‘‘Social justice and communities of difference: a snapshot from Liverpool’’, in Merrifield, A. and Swyngedouw, E. (Eds), The Urbanisation of Injustice, Laurence and Wishart, London. Metcalf, H., Modood, T. and Virdee, S. (1996), Asian Self-employment. The Interaction of Culture and Economics in England, Policy Studies Institute, London. Modood, T. (1998), ‘‘Ethnic diversity and racial disadvantage in employment’’, in Blackstone, T., Parekh, B. and Sanders, P. (Eds), Race Relations in Britain: A Developing Agenda, Routledge, London. Ohri, S. and Faruqi, S. (1988), ‘‘Racism, employment and unemployment’’, in Bhat A., Carr-Hill, R. and Ohri, S. (Eds), Britain’s Black Population: A New Perspective, Gower, Aldershot. Owen, D. (1997), ‘‘Labour force participation rates, self-employment and unemployment’’, in Karn, V. (Ed.), Ethnicity in the 1991 Census. Volume Four. Employment, Education and Housing Among the Ethnic Minority Populations of Britain, The Stationery Office, London, pp. 29-66. Phizacklea, A. and Wolkowitz, C. (1995), Home Working Women, Sage, London. Rafiq, M. (1985), Asian Businesses in Bradford. Profile and Prospect, Bradford Metropolitan District Council, Bradford. Ram, M. (1992), ‘‘Coping with racism: Asian employers in the inner city’’, Work, Employment and Society, Vol. 6 No. 4, pp. 601-18. Ram, M. and Hillin, G. (1994), ‘‘Achieving ‘break-out’: developing mainstream ethnic minority businesses’’, Small Business Enterprise and Development, Vol. 1 No. 1, pp. 15-21. Ram, M. and Jones, T. (1998), Ethnic Minorities in Business, Small Business Research Trust, Open University, Milton Keynes. Ram, M., Jones, T. and Abbas, T. (forthcoming), ‘‘Ethnic enterprise in its urban context: South Asian restaurants in Birmingham’’, International Journal of Urban and Regional Research. Ram, M., Sanghera, B., Abbas, T., Barlow, G. and Jones, T. (2000), ‘‘Ethnic minority business in comparative perspective: the case of the independent restaurant sector’’, Journal of Ethnic and Migration Studies, Vol. 26 No. 3, pp. 495-510. Razin, E. and Langlois, A. (1996), ‘‘Metropolitan characteristics and entrepreneurship among immigrants and ethnic groups in Canada’’, International Migration Review, Vol. 30 No. 3, pp. 703-27. Rekers, A. and van Kempen, R. (2000), ‘‘Location matters: ethnic entrepreneurs and the spatial context’’, in Rath, J. (Ed.), Immigrant Businesses: The Economic, Political and Social Environment, Macmillan, Basingstoke, pp. 54-69. Rhodes, C. and Nabi, N. (1992), ‘‘Brick Lane. A village economy in the shadow of the city?’’, in Budd, L. and Whimster, S. (Eds), Global Finance and Urban Living, Routledge, London, pp. 333-52. Robson, M.T. (1997), ‘‘The relative earnings of self and paid employment: a time-series analysis for the UK’’, Scottish Journal of Political Economy, Vol. 44 No. 5, pp. 502-18. Sassen, S. (1991), The Global City: New York, London, Tokyo, Princeton University Press, Princeton, NJ.

Singh, J., Tucker, D. and House, R. (1986), ‘‘Organisational legitimacy and the liability of newness’’, Adminsistrative Science Quarterly, Vol. 31 No. 4, pp. 171-93. Sly, W., Thair, T. and Risdon, A. (1998), ‘‘Labour market position of ethnic groups’’, Labour Market Trends, Vol. 106, December, pp. 601-15. Song, M. (1997a), ‘‘You’re becoming more and more English: investigating Chinese siblings’ cultural identities’’, New Community, Vol. 23, pp. 343-62. Song, M. (1997b), ‘‘Children’s labour in ethnic family businesses: the case of Chinese take-away businesses in Britain’’, Ethnic and Racial Studies, Vol. 20 No. 4, pp. 690-716. Srinivasan, S. (1995), The South Asian Petty Bourgeoisie in Britain, Avebury, Aldershot. Storey, D. and Johnson, S. (1987), Job Generation and Labour Market Change, Macmillan, London. Waldinger, R. (1996), Still the Promised City? African-Americans and New Immigrants in Postindustrial New York, Harvard University Press, Cambridge, MA. Ward, R. (1985), ‘‘Minority settlement and the local economy’’, in Roberts, B., Finnegan, R. and Gallie, D. (Eds), New Approaches to Economic Life, Manchester University Press, Manchester, pp. 198-211. Ward, R. and Reeves, F. (1980), West Indians in Business in Britain, HMSO, London. Warde, A., Martens, L. and Olsen, W. (1999), ‘‘Consumption and the problem of variety: cultural omnivorousness, social distinction and dining out’’, Sociology, Vol. 33 No. 1, pp. 105-27. Watson, R., Keasey, K. and Baker, M. (2000), ‘‘Small firm financial contracting and immigrant entrepreneurship’’, in Rath, J. (Ed.), Immigrant Businesses: The Economic, Political and Social Environment, Macmillan, Basingstoke, pp. 70-89. Werbner, P. (1984), ‘‘Business on trust: Pakistani entrepreneurship in the Manchester garment trade’’, in Ward, R. and Jenkins, R. (Eds), Ethnic Communities in Business, Cambridge University Press, Cambridge, pp. 168-88. Westergaard, J. (1995), Who Gets What: The Hardening of Class Inequality in the Late 20th Century, Polity Press, Cambridge.

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Mixed embeddedness Does it really explain immigrant enterprise in Western Australia (WA)? Nonja Peters Curtin University of Technology, Western Australia Keywords Enterprise economics, Immigrants, Australia Abstract Kloosterman, van der Leun and Rath assert they conceptualised the ‘‘mixed embeddedness’’ hypothesis to overcome the shortcomings characteristic of earlier theoretical models of immigrant business enterprise. This article assesses the relevance of this theoretical perspective to explaining immigrant entrepreneurship in a specific host setting with reference to research that spans a number of economic periods and includes both genders and a number of generations. It is argued that, while the ‘‘mixed embeddedness’’ explanation gives a more comprehensive explanation than previous models, it nonetheless fails to explain the wide-ranging inter-ethnic variation in entrepreneurial concentration observed among immigrant groups around the world. It contends that the reasons for this are the model’s lack of historical perspective and focus on the lower end of the market. It also demonstrates how the study of immigrant enterprise is advanced by incorporating the agency of individuals into the explanatory process.

Introduction, aims and objectives No single cultural phenomenon is intelligible in itself, since it always involves the union of a natural phenomenon with some historically acquired or initiated modification brought about through the agency of man (Bidney, 1957).

International Journal of Entrepreneurial Behaviour & Research, Vol. 8 No. 1/2, 2002, pp. 32-53. # MCB UP Limited, 1355-2554 DOI 10.1108/13552550210423705

A desire to explain the distinctly cosmopolitan character of entrepreneurially revitalized inner cities that accompanied the entry of successive waves of immigrants into the small business sector[1] of host cities remains the draw card that attracts researchers around the world (Waldinger et al., 1990; Light 1972; Bonacich, 1973; Wallman, 1979; Boissevain and Grotenbreg, 1987; Portes and Stepick, 1986; Ward and Jenkins, 1984; Bovenkerk et al., 1983; Collins et al., 1995; Peters, 1999). The conceptual approaches that originated to explain the phenomenon variously attributed the emergent differentials to a group’s culture, structural barriers, situational influences, ecological factors, global economic factors, the opportunity structure, the need to be upwardly mobile or combinations thereof. While such monocausal studies could readily isolate the importance of being able to call on family and kin for the requisite labour and capital needed to establish and sustain a business to the nascent entrepreneur, the research spawned fails to appreciate how the economy and host society’s institutions impact on immigrants’ self-employment patterns. Nor can current This article is part of a special issue of papers entitled ‘‘The economic context, embeddedness and immigrant entrepreneurs’’ edited by Jan Rath, Robert Kloosterman and Eran Razin.

explanations account for the distinctive differences in entrepreneurial Immigrant concentration and style observed among immigrant groups in host settings. enterprise in Waldinger’s (1986) ‘‘interactive explanation’’ was the first explanatory model Western Australia to move away from the monocausal explanations that have dominated the field since the early part of the twentieth century. Conceptualized in response to the observation that ‘‘. . . ethnic businesses proliferate in industries where there is 33 congruence between the demand of the economic environment and the informal resources of the ethnic population’’, it explains the increasingly high rate of immigrant business growth by integrating ‘‘culture’’ and ‘‘structure’’ – specifically ‘‘ethnic resources’’ with the ‘‘opportunity structures’’ (Bun and Hui, 1995, p. 524). Light and Bhachu (1993) rightfully claim that the focus of the Waldinger (1986) model is too narrow as it ignores the influence the destination economy has on immigrants’ entrepreneurial activities. Kloosterman et al. (1999, p. 8) claim their ‘‘mixed embeddedness’’ hypothesis overcomes these shortcomings and promotes a better understanding of immigrant enterprise because it takes into account not only the interplay between the ‘‘opportunity structure’’ and ‘‘immigrant context’’ but also the complex way in which immigrant businesses are inserted into the host environment, with impacts on the socio-cultural and institutional sectors of a neighbourhood, city, national and international economic levels (Kloosterman et al., 1998). In this view, the rise of immigrant entrepreneurship is, at least in theory, primarily located at the intersection of changes, in socio-cultural frameworks, on the one side, and transformation processes in (urban) economies and the institutional framework on the other. In this paper I assess the relevance of Rath and Kloosterman’s (2000; Kloosterman et al., 1999) ‘‘mixed embeddedness’’ hypothesis to explaining Dutch, Italian, Greek and Vietnamese (ethnic Chinese and ethnic Vietnamese) business enterprise in Western Australia (WA)[2]. The WA data serve as a particularly useful analytical tool because the study from which they are derived spans a number of economic periods, and the entrepreneurs under investigation include both genders and a number of generations[3]. I argue that while the ‘‘mixed embeddedness’’ theoretical model gives a more comprehensive explanation of immigrant enterprise, because it examines the impact of the host’s institutions on the entrepreneurial process, it does not explain, anymore than previous models, the wide-ranging, inter-ethnic variation in entrepreneurial concentration observed among immigrant groups in host environments around the world. I contend that the reasons for this include: the model’s lack of historical perspective – it does not deal with the development of entrepreneurship within a group over time, and its chief research focus (in 1999) is on businesses in the informal economy located at the lower end of the market. Finally, I demonstrate how the study of immigrant enterprise is advanced by incorporating a historical perspective and the agency of individuals into the explanatory process (Peters, 1999).

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Why history counts – the view from Western Australia Who is an immigrant entrepreneur and why is history important to an understanding of the immigrant entrepreneurship? When the WA study commenced in 1989, Light (1972), Bonacich (1973), Waldinger (1986), Wallman (1979) and Ward and Jenkins (1984) were the most prominent scholars in the field of immigrant enterprise. However, Vermeulen et al.’s (1985) study of postwar Greek settlement in The Netherlands, Bovenkerk et al.’s (1983)[4] research on Italians in the ice cream trade there, and articles on Surinamese entrepreneurship by Boissevain and Grotenbreg (1985, 1986, 1987) provided far more ideas relevant to the WA data. Instead of emphasizing only the ethnocultural characteristics and processes of incorporation of immigrant entrepreneurs in the host environment, these authors also gave consideration to entrepreneurs’ offspring. Specifically, their submission that growing up in a business milieu inclines the offspring of immigrant entrepreneurs to pursue self-employment and engage in risk-taking behaviour prompted the inclusion of a ‘‘generations’’ dimension to the inquiry[5]. An analysis of the WA data from a generation perspective revealed that a more comprehensive understanding of immigrant enterprise can be achieved by viewing the immigrant entrepreneur from the following four conceptual categories: (1) the first generation (pioneer); (2) the second wave (people sponsored to WA by the first category); (3) the second generation; and (4) the entrepreneur’s ethnicity (see Appendix) (Peters, 1999). The investigation also revealed that while there were similarities in the types of businesses established by the first generation and ‘‘second wave’’ entrepreneurs – pre- and post-war – these entrepreneurs gave different reasons for being selfemployed. The second generation diverged completely from the other two categories in business type, reasons for being self-employed and the resources they utilize to establish and operate their firms. The ethnic component was the most important indicator for understanding Vietnamese entrepreneurship. Class, gender and the ‘‘individual agent’’, like ethnicity, often further modified the conceptual groupings because these establish a particular vision of reality, which included views on the symbolic value of work and knowledge. The remainder of the paper is given to explicating the distinctions on which the conceptual categories are based[6]. Generations and entrepreneurs First generation pioneer entrepreneurs (as encompassed in the WA data) began arriving in WA around 1890. These were typically sojourners: married or single, poorly educated men from either the Greek islands of Castellorizo (who dominated pre-war WA Greek numbers), Kythera or Ithaca, or rural villages in Northern Italy, and less often from coastal or rural villages in Macedonian

Greece or Southern Italy (Price, 1963). Most had came to WA with the explicit Immigrant intention of staying only so long as it would take to accumulate enough money enterprise in to live out a life of comfort in the homeland village (Peters, 1999). The Western Australia Australian society they entered was 98 per cent Anglo-Celtic in origin and highly xenophobic. To preserve ‘‘racial purity’’ and protect itself against economic competition, it had developed the White Australia Policy – an 35 immigration restriction policy to stop primarily Chinese migrating to its shores. Racial tensions emerging from the large-scale immigration of Chinese gold miners to gold-fields in Victoria and New South Wales during the 1850s provoked a backlash among Australia’s European settlers fearful of becoming overwhelmed by Asian migration. Fearing an ‘‘olive’’ as much as the ‘‘yellow peril’’, they had in addition imposed a landing fee and immigration quota on southern Europeans, who they also viewed as racially undesirable and often referred to as ‘‘blacks’’ (Yiannakis, 1996). Having found employment, in timber mills, on farms, wood chopping on the Woodline, or construction sites, these immigrant pioneers soon discovered that any attempt on their part to move out of the ‘‘labourer’’ niche and into more lucrative jobs such as gold mining attracted opposition from the locals. The newcomers’ lack of English language ability further restricted their workplace options, eventually pushing many of them into exploitation or self-employment (Peters, 1999)[7]. The effect entrepreneurs’ pre-migration skills held is also evidenced by their subsequent choice of business in WA. For example, Italians from northern Italy were more inclined to go into farming or fishing, whereas those from the South established market gardens or orchards, or opened fruit and vegetable stores[8]. A few became boot makers or set up construction firms specialising in terrazzo work (Peters, 1992a, b). On the other hand, the Castellorizian Greeks, who were responding to their island’s ancient trading cultures which had spawned many families devoted to seafaring and entrepoˆt trade, established retail or wholesale businesses or hawked merchandise door to door (Yiannakis, 1996)[9]. The experiences of padroni like Ezio Luisini and Athanasios Auguste, who are considered the spearheads of Greek and Italian enterprise in WA, provide good examples of the impact pioneers had on the entrepreneurial process. Athanasios Auguste came to WA in 1891 via Egypt, where he had been employed by the Suez Canal Company, having had to flee Castellorizo with his cousins Dimitrios and Athanasios Manolas to avoid being caught by Turkish authorities for trying to land tobacco illegally. This wheeling and dealing from a young age, albeit unlawful, highlights the proclivity for enterprise that had evolved in that community. In 1888, Auguste worked his passage to Singapore and then travelled on another vessel to Broome. After some time working on the pearl-fields he moved, in 1890 or 1891, first to Perth and soon afterwards to Adelaide, where he was joined by his cousins. In South Australia he was employed for some years as a seaman and fisherman. On his return to Perth in 1896, Auguste, with little education – he could only read and write in Greek – turned the knowledge he had gained as an employee on the pearl beds in

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Broome and the fishing industry in South Australia to establishing oyster beds in Fremantle and a fish and oyster saloon in the city. Characterised by Gilchrist (1991, p. 240) as a tireless worker, Auguste and his wife (an educated Greek girl whom he married on a return visit to Egypt) settled down to a hard-working regime in the three story building they purchased, which consisted of an oysterbar and restaurant on the ground floor, and a wine and spirits shop on the floor above. The third floor was a lodging-house, which was patronised largely by the second wave immigrants – new Greek arrivals, including the many relatives and friends Auguste sponsored[10] to come to WA via the migration chain, and who were often employed by the Augustes in their business as kitchen hands, cooks or waiters (Gilchrist, 1991). Ezio Luisini’s story has similarities: like all sojourners he came to WA at the beginning of the last century with a desire to save £400 to take back to Italy. To this end he started work in the bush, in mines and in timber mills (Strano, 1986). Thirteen years later he decided to settle in WA. Although he had accumulated the requisite amount, his mother had died, leaving him little to go back for. Instead he purchased a wine saloon, followed by a property on the outskirts of the city where he started growing vines, then a clothing store next to the wine saloon, and later another merchandising concern in Fremantle (the port) in premises that had once been a restaurant, and where he had eaten his first meal in Australia. Both shops became Meccas for non-English speaking Italians. Not only did they purchase their clothing and wine from him, but also valued his advice and sought his financial help (Gava, 1978, p. 1). Luisini eventually became not only the largest Italian clothing merchant and vigneron, but also the largest landowner in the district of Wanneroo The economic activities and successes of pioneers like Luisini and Auguste became the benchmark from which second wave emigrants came to determine their labour market options and choices in WA. Return visits to the home village by the pioneers were particularly powerful motivation, as the sojourner was both a potent role model and a walking advertisement. He would arrive from the ‘‘promised land’’, well dressed in the mandatory expensive new suit and hat, looking well fed and happy (Yiannakis, 1996; Gilchrist, 1991, p. 190). The second wave emigrants were thus motivated by the desire to emulate the good fortune of these padroni. The ideology, revering self-employment, that evolved from pioneer Greeks and Italians was transmitted from immigration countries to the Greek islands and mainland Greece and Italy via the multistranded transnational migration chains they had established (Peters, 1999). The ideology was successful because it was an achievable goal. It entailed employment in a padrone’s business, where the newcomer quickly acquired the skills needed to start up their own business. In reality, however, the process is bereft of glamour. Needing employment and shelter, second wave immigrants started life in WA, in debt to their sponsor for the fare and, regardless of the treatment to which many were subjected, had no option but to work out their indebtedness. Spiro Barboutsis, who arrived in WA in 1937, spent the first year washing the plates in his cousin’s restaurant:

I could only speak ten words of English at that time. I was working from 4.40 am till 8 pm at a Greek’s restaurant in Williams Street. Food and a room was provided. But for that I had to work seven days a week, no public holidays, nothing.

While employed as a kitchen hand, Spiro gained a working knowledge of English, and moved up the job hierarchy to become a waiter, then cook and, after an arduous apprenticeship, a partner in the business[11]. Luisini indirectly provided post-war arrival Umberto Scaffidi from Calabria with the idea and some resources to become self-employed. Umberto, who came to WA in 1952 aged 28, with only a primary school education, started a family business when his job – selling drapery door to door for Luisini – came to an end. He reflects: ‘‘Then I took hold of the idea, if I can sell for Luisini, I can sell for myself. I can make some wages plus something for myself . . . I organized it with all the suppliers’’. His move was also made possible by the large pool of Italian consumers who had moved into the inner city during the 1950s, attracted there by sponsors, cheap housing, the proximity of industrial employment and the fact that they could converse and do business in their own tongue. However, the lack of local business knowledge and limited English language ability that pushed Umberto into servicing the Italian community also made him vulnerable to exploitation by co-ethnics. Too late, he discovered that the first shop he rented from another Italian in the inner city did not have a lease-hold and so he lost a lot of money. He later purchased a delicatessen in another street. Umberto’s business did well until the neighbourhood’s residential mix changed – from Italian to Asian – following the disbandment of Australia’s immigration policy in the late 1970s. Europe had almost dried up by then and Australia needed to consider drawing emigrants from elsewhere to work and people the country (Castles et al., 1988). To survive financially required Scaffidi and his wife Maria to work double shifts: I never saw the sun come down of a night. I start at 6 am, finish 9.30-10 pm . . . If I was to put in eight hours per day I can live, nothing else. But after the extra hours this is the money you can save. You can save the money but you can’t enjoy the life. It’s a prison!

Maria claims her life became the shop, the family and the church. Why did the Scaffidis continue in business when it had become borderline viable? Australian theorists Lampugnani and Holton (1992, p. 21) note that: ‘‘Small business proprietorship is not just a livelihood Italians pursue it is judged a highly desirable career path by Italians. Therefore, despite the gruelling routine, it is not uncommon to hear proprietors, driven by this socio-cultural ideal, declare: ‘We work hard but we don’t mind because we are working for ourselves (‘Lavoriamo per conto nostro’)’’ (Huber, 1977, p. 67). At the time ‘‘success’’, to these proprietor’s was more about ‘‘being self-employed’’, despite the time it took to achieve a liveable income, rather than the monetary rewards – that is not to deny their importance. The experiences of the pioneers and second wave entrepreneurs also provided abundant evidence that the innovative acts of individuals like

Immigrant enterprise in Western Australia 37

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Athanasios and Enzo initiated patterned behaviour. The battery of ethnospecific stores that emerged to service inner city Italians, and the myriad Greek cafe´s directed at mainstream consumers that were dotted around rural and urban WA up until the 1960s, provide a good example of the style ethnic entrepreneurship took on in Australia. Coined a ‘‘culture of entrepreneurship’’, Werbner (1987) noted, from ongoing similar behaviour among the Punjabis who owned the garment industry in Manchester, that it begins when chain migration pioneers find and operate a business niche, later they sponsor co-ethnics into this niche by providing advice, employment, patronage, credit and/or skills training[12]. During the process, the initiator-entrepreneur’s behaviour becomes a model for the actions, dreams, attitudes and beliefs of increasing numbers of compatriots. Later arrivals adopt similar strategies because the resources most available to entrepreneurs are common to the whole group. Though uncoordinated, these parallel decisions pushed ethnic groups into select niches just as if a master plan were in effect (Werbner, 1987, p. 187). Ethnic group size can also be a determinant of entrepreneurial activity. In WA this is particularly relevant to the labour market patterns of the large inner city Italian population. Evans points out that settling in neighbourhoods, such as the Perth inner city, where most residents are of the same nationality increases not only the regularity of employment but also co-ethnics’ exposure to self-employment: . . . even a relatively small number of entrepreneurs can offer employment opportunities to a substantial portion of their co-ethnics. For example, in a group with only average levels of entrepreneurship (6 per cent), if each business owner employs just one co-ethnic, then 12 per cent of the groups’ work force is involved in the ethnic economy and if the employer hires three co-ethnics then 24 per cent are in the ethnic economy . . . the effects are even more striking at higher levels of entrepreneurship (Evans, 1989, p. 959).

Men belonging to very large ethnic groups are, in fact, about one and a half times more likely to be business owners with employees than are men belonging to very small groups (Evans, 1989, p. 958). High levels of social cohesiveness, such as that found among the Greeks, can have the same effect. Despite the scattered nature of WA’s early Greek cafe´ culture it provided these employees, on which it totally depended, with proportionately as many opportunities for small business activities as did the Italian enclave, albeit in a strictly limited area – food. Price (1975) confirmed this, noting that until the Second World War, 73 per cent of the Greek immigrants around Australia had entered the catering trade. This is because all that was needed to start a fishand-chip shop was some sort of premises, a basin of fat, a container to heat it, a sharp knife to fillet fish and peel and cut potato chips, and the willpower to work long, hard hours at tedious work (Yiannakis, 1996, p. 150). The image of the immigrant entrepreneur – as a comparatively recent newcomer to the host environment, arriving as an adult with little or no capital and relatively few qualifications, and subsequently moving from unemployment into selfemployment in a business that requires little capital outlay, few qualifications

and minimal English language competency, implicit in the ‘‘mixed Immigrant embeddedness’’ model – fits the characteristics of the first generation enterprise in entrepreneur in the WA study. Western Australia Although Kloosterman et al. (1999) do not acknowledge the impact of ‘‘generations’’ on immigrants’ entrepreneurial process their ‘‘mixed embeddedness’’ model, because of its focus on the impact of the host’s 39 institutions on immigrant enterprise, is well placed to appreciate the long-term labour market outcomes of Dutch immigrants. The distinctive nature of Dutch migration patterns was largely manipulated by the Department of Immigration’s recruitment procedures, which in turn reflected the needs of a marketplace hungry for tradesmen and semi-skilled operatives to restore essential services to pre-war levels, and to expand the burgeoning manufacturing, building, construction and heavy industry sectors (Peters, 2001). Thus, 42.42 per cent of the Dutch males selected to come to Western Australia, between December 1951 and February 1955, were classified craftsmen in contrast to only 17.9 per cent of the local workforce is witness to the success of the Commonwealth Government’s employment drive (Appleyard, 1956). As a consequence, subcontracting to building and construction firms was the most common form of self-employment pursued by the first generation Dutch. During the 1950s and 1960s the move from employee to self-employed was also facilitated by the ease with which one could enter the business sector. Compared to The Netherlands, where a battery of diplomas is needed to open a business, those required in Australia were negligible (Boissevain and Grotenbreg, 1987)[13]. Even men like Hans van Look, a house painter by trade who had been employed by the same boss for 25 years in Amsterdam, became self-employed within weeks of arrival: ‘‘I started with the tins of paint hanging off the handlebars of my bike’’ (Peters, 1999, p. 17). Some are still in business 50 years later. The philosophical basis for the Dutch’s ‘‘ambition’’ to be selfemployed was derived from traditional Netherlands’ ideology, which reveres the entrepreneur and places business ownership high on the hierarchy of acceptable career paths. Social theorists Beijer et al. (1961, p. 288) note that the desire to be self-employed was mentioned as a principal motive for emigrating by 17 per cent of the Dutch prior to leaving, and hoped for by another 60 per cent. In reality, however, few post-war European immigrants entered the selfemployed sector during the three decades of post-war boom while there were an abundance of well-paid trades jobs in the offing. Fluctuations in business participation rate – in line with changes in the Australian economy – are further evidenced by ABS figures which show high self-employment rates were typical during the depression (Peters, 1999, Appendix). Light (1979, p. 36) confirms that a similar growth in the number of retail firms also occurred in the USA during the worst years of the depression from 1929 to 1935. On the other hand, the reduction in the proportion of selfemployed and the corresponding increase in the employee group the immediate post-war decades reflect the changes in the post-war global economy and the structural changes in industry and commerce heralded in by the ensuing three

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decades of boom ( Jackson, 1979, p. 29). That Australian patterns replicate those in overseas capitalist economies is well illustrated by the 30 per cent shift away from self-employment that occurred in the Greek community in Victoria between the years 1947 and 1981. At the 1947 census approximately 58 per cent of Greek male migrants were self-employed or employers, compared with only 20 per cent of the Australian born. Yet in 1981, following three decades of sustained economic growth, full employment and price stability, statistics show 75 per cent of Greek males in Victoria had became employed as unskilled wage and salary earners in Victoria’s manufacturing sector (Castles et al., 1988, p. 5). Miller and Swanson (1958, p. 123) noted that a consequence of a similar pattern in the USA was that the achievement imagery, which had previously been directed at business success, had among the American middle-class shifted away from self-employment toward bureaucratic careers in corporate hierarchies (cited by Light, 1984, p. 197). The economy was also a major force in explaining the choices and chances in the WA labour market available to the Vietnamese ‘‘boat people’’ who started coming to WA from 1978 onwards. Economic restructuring meant few manufacturing sector jobs in the offing (a traditional area of employment for newcomers) and massive unemployment, which is still high 25 years later (Peters, 1996). Those who gained employment reported being paid below award rates and being pressured to work excessively long hours without proper overtime rates because they did not know their rights. Building sites, where they were often employed, were singled out as particularly notorious for this practice. Mr Fong recalls: I worked as a builder’s labourer from 7 am until 7 pm for many weeks for only $20 per day. There were no other jobs available and I was obligated to send money to help my relatives who were still in Vietnam.

Counter-exploitation was also a common practice among the Vietnamese, many worked while using the welfare benefits which they continued to accept to send to relatives in Vietnam (Peters, 1996). By 1982, many Vietnamese refugees were self-employed in home-based concerns targeting co-ethnics (Portes and Stepick, 1986). However, although high unemployment is often considered a trigger to a group’s move into selfemployment, research has also shows that disadvantage alone cannot produce a propensity for self-employment as many migrant groups who encounter similar disadvantages do not achieve a high business profile, research demonstrates the process is also extensively culturally driven. Thus, although outwardly it is possible to link the Vietnamese unemployment rates and selfemployment activities directly to economic restructuring and prejudice, such a view does not account for the far greater number of ethnic Chinese to ethnic Vietnamese self-employed. Anecdotal evidence shows 66 per cent of WA’s Vietnamese entrepreneurs were of ethnic Chinese origin (Peters, 1999, p. 199). This is particularly interesting, given that the Chinese are described as having owned Cholon, Saigon’s business district, and that the Vietnamese arrivals,

since 1978, coincided with the predominantly ethnic Chinese refugee wave Immigrant which followed the clamp-down on private trade that year (Ungar, 1987; enterprise in Viviani, 1982)[14]. Western Australia An additional advantage that the ethnic Chinese had over the ethnic Vietnamese was being able to obtain employment and concomitantly re-skilling. Chinese who had been ‘‘coffee or oil barons’’ in Vietnam established 41 eating outlets after they had acquired the necessary skills working in the restaurants of Mandarin speaking Chinese from Malaysia, although this is not surprising considering that a particular feature of Chinese adaptation in the Asia-Pacific region is their extensive entrepreneurial presence (Knowles, 1988, p. 61; Li, 1993)[15]. A consequence of this is that the Chinese are often cited as an example of a ‘‘middleman trading minority’’, or described as the ‘‘Jews of the Asia-Pacific region’’ (Inglis, 1988, p. 145). However, the Chinese Vietnamese success may also have its roots in Australia’s welfare state, since the unemployment benefits they received from the Australian government often provided the income necessary to facilitate a Hui (a rotating credit association). Many nascent entrepreneurs were able to raise enough finance to purchase a market stall via a Hui (Knowles, 1988). This was not an option for the European immigrants who arrived in the immediate post-war years, when welfare benefits were minimal. Vietnamese business in WA affords an example of ‘‘ethnic succession’’/‘‘vacancy chain’’ since their first businesses were often delicatessens they had purchased from ageing Italians who sold out when the residential mix in the inner city changed from southern European to Asian around 1980. The Vietnamese entered an area in transition due to the gentrification movement that had, since the late 1970s, progressively taken over more of the inner city (McDonald Hales, 1988; Zukin, 1987; Sassen-Koob, 1986)[16]. The rapidly rising cost of housing soon forced them out to cheaper areas North of the city. However, whereas many Chinese Vietnamese continued to trade in the area, which had in the meantime become a significant entertainment and tourist attraction, the ethnic Vietnamese bought delicatessens around the metropolitan area. The Vietnamese findings for WA challenge Rath and Kloosterman’s (2000, p. 15) claim that more rewarding research results are achieved by a move away from ‘‘parochial research approaches’’ – meaning ethno-specific case studies – which they argue would only re-ascertain essentialist conceptions of ethnicity. Without this approach, the distinctive differences associated with the ethnic Vietnamese as opposed to the ethnic Chinese from Vietnam would not have become known (Peters, 1999). The validitiy of Rath and Kloosterman’s (2000, p. 6) remark that ‘‘it cannot be denied that some immigrant entrepreneurs are doing extremely well’’ can also be questioned, since at no time do they divulge, who these entrepreneurs are and what it is that is making them more successful. Among the WA entrepreneurs, the second generation stand out as infinitely more financially successful than their predecessors[17]. Vermeulen et al. (1985, p. 120) note that, despite the difficulties associated with prioritizing variables, if asked to predict who was more likely to go into

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business the decisive factor would have to be someone from an entrepreneurial background. An overwhelming majority of the second generation generally, and in fact over 90 per cent of the pre-war Greek, had grown up in a family business background. The WA second generation are located in dynamic, lowrisk firms that rely on more class than ethnic resources to operate, and require more start-up capital but are infinitely less labour intensive than the businesses established by their ancestors (Peters, 1999)[18]. Their proprietors find business less a source of economic survival than a source of economic advancement. Their local education gives them access to the school/peer group networks their parents relinquished when they emigrated. As a consequence, they are better able than their parents to exploit two cultural milieus for information, finance, labour and consumers. Of striking interest within this WA group was the ardent desire to become self-employed, which had been engendered by growing up in a business background. One Italian, Elisabeth M., recalls: After working in my brother’s business for a number of years I opened my own business . . . A business of our own was for us the ultimate goal. My father had often been in businesses and we were used to starting something for ourselves.

This can be in part related to the ‘‘business talk’’ in which they were raised. James Kannis recalls that everybody in the old days was in some form of business or another and that the discourse at family or community gatherings was important to the evolution of their business consciousness. The business immigrant tradition and work ethic in which they were raised also made the second generation accustomed to hard work and long hours. David Lekias, who currently operates a large lighting business, reflects: Dad opened up a fruit and milk bar in Barrack Street opposite the Town Hall from personal savings. He was there for around 36 years. We kids all grew up through that shop. We all had to work in the shop after school, and Saturdays and Sundays.

This expressed itself in the following attitude. Con, a Greek entrepreneur, declared he would rather earn a quid self-employed than two as an employee, and Dutch Gerard stated: Wherever, whenever, I will always dedicate myself 150 per cent to whatever job I do. Therefore, I reason that in waged labour this would still only give me the wage for which I was contracted. However, if I were to put 150 per cent effort into my own business then the rewards would be far greater and I get to reap the benefits – not my boss!

Members of the Greek and Italian second generation also associate their ‘‘drive to achieve’’ with the bigotry many endured at school. Coffee shop owners Spiro and George say fighting their way through lower school was a common experience which made them ‘‘street wise’’ and the reason driving them ‘‘just a little bit harder’’ so as to do better than the locals and to prove to AngloAustralians that they could maximise the limited opportunities they had. A local and/or tertiary education is another important element in the development of many flourishing second generation concerns. Walker (1988, p. 131) notes that Greek boys from a successful business background tend to be

more motivated to do well in school than Greek boys whose parents were in Immigrant waged labour. Werbner (1990) similarly links the spurts in the fortunes and enterprise in expansion of the second generation Punjabi Muslims in the Manchester fashion Western Australia industry to the central role the university educated sons or younger educated brothers play in the business. She states: Seen in terms of their . . . sophistication, managerial . . . [and] communicative skills and sheer energy, I can only conclude that the fact that they are educated affects their performance in the business . . . It does seem that a university degree, however irrelevant it may be, has a radical impact on the expansion of business (Werbner, 1987, p. 166, 1990, p. 21).

Walker (1988, p. 131) also noticed that the businesses owned by Greeks in his inner city Sydney study sample underwent expansion when a universityeducated son joined the firm’s ranks. The Greek Kailis brothers attribute their success as exporters of lobster and other seafood to their secondary/tertiary qualifications which, they maintain, better equipped them to remain flexible and open to market forces and opportunities. Not long after joining their father in the business they began expanding the firm’s activities, moving into wholesaling, retailing and even exporting. The brothers eventually created the largest privately owned fishing company in Australia. Second generation Dutch, who figure prominently among The Netherlands-born self-employed, had little formal education. Most had left school early to help the family get on its feet financially. With self-employment easy to achieve in Australia, Dutch working-class parents tended to view a tertiary education as a luxury rather than a necessity (Castles and Collins, 1989, p. 5). However, most of those who became self-employed had completed further education at night school. Another major difference between the generations is their perception of ethnicity. Whereas the first generation’s association with ethnicity is best described as primordial expressed in terms of social cohesion, the second generation pre- and post-war is self-consciously aware of ethnicity as a resource, which can be either commercially exploited or suppressed, depending on the nature of the particular situation (Vermeulen and Govers, 1994, 1997). For example, for Frank Cicerello, who runs a very successful inner city travel agency, ethnicity is a marketable commodity, which he ignores in dealings with the general public and invokes in business dealings with the Italian community. Eddie Verhoeven, the owner of a second-hand car yard, suppresses his ethnicity – he perceives it to be disadvantageous to acknowledge his heritage in business because of the negative evaluation of the Dutch as frugal and bombastic (know-alls) by the Australian business community[19]. The choice to reject or utilise ethnicity in business dealings is made by individuals. Rath and Kloosterman’s (2000) and Kloosterman et al.’s (1999) models completely omit considering the impact the agency of individuals has on the entrepreneurial process. Notwithstanding, statistics clearly demonstrate, aside from during the depression, that relatively few members of an ethnic group and even less persons in mainstream society decide to risk all for such ideals as ‘‘independence’’, ‘‘prestige’’ and/or spurious profit, and that in most instances fewer are women (see Table III). Tables I and II show that the vast majority of

43

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Country Australia Vietnam The Netherlands Greece Italy Yugoslavia Poland Malaysia Germany The UK and Ireland Other Undefined Total

SelfUnpaid Employer employed Employees helper Unemployed Total Total (%) (%) (%) (%) (%) employed (%) 7.2 4.8 10.5 14.2 15.1 6.5 4.0 8.3 7.3 5.2 6.3 4.6 7.8

11.9 8.0 18.4 17.2 18.8 13.8 15.6 7.7 15.7 11.9 10.2 9.2 11.1

Table I. Birthplace by labour market status, Western Australia, 1991 – males Source: ABS 1991 Census for WA

Country

Table II. Birthplace by labour market status, Western Australia, 1991 – females

Australia Vietnam The Netherlands Greece Italy Yugoslavia Poland Malaysia Germany The UK and Ireland Other Undefined Total

67.5 50.3 60.2 55.8 56.1 64.5 55.1 68.5 62.4 68.8 67.5 63.5 67.2

0.5 1.3 0.3 0.8 0.7 0.4 0.3 0.4 0.6 0.2 0.3 0.8 0.4

12.8 35.7 10.9 12.1 9.3 14.7 24.9 15.2 14.1 13.8 15.8 21.8 13.5

289,493 546,603 2,692 4,264 4,128 6,222 1,151 1,858 9,161 14,570 4,213 6,828 1,712 3,594 4,167 7,642 3,580 4,945 76,265 108,826 47,383 71,976 1,517 16,381 445,424 793,709

SelfUnpaid Employer employed Employees helper Unemployed Total Total (%) (%) (%) (%) (%) employed (%) 4.7 5.3 4.4 11.2 10.6 5.0 2.8 4.1 6.8 3.8 4.1 4.0 4.6

7.8 9.2 13.2 18.1 15.9 11.0 7.8 5.9 10.9 7.6 7.2 6.4 7.9

75.8 40.2 69.6 59.0 64.3 70.9 63.9 74.2 69.3 64.8 72.9 71.9 75.2

1.4 2.2 3.0 2.7 3.3 1.2 1.9 1.1 1.3 1.0 1.1 1.2 1.3

10.2 42.9 7.7 8.9 6.3 11.8 23.6 14.6 11.7 10.1 14.6 16.5 10.9

211,540 550,896 1,907 3,951 2,220 5,527 525 1,690 3,814 12,301 2,429 5,814 1,213 3,516 3,475 8,395 2,308 5,217 51,540 108,490 33,430 72,413 951 14,906 315,442 793,116

Source: ABS 1991 Census for WA

immigrants opt for waged labour despite having to deal with the same discrimination and prejudice that some researchers argue compel employees to become entrepreneurs. Factoring human agency into the entrepreneurial dynamic Although the image of the self-employed, self-sacrificing immigrant who through hard work and risk taking ‘‘makes it’’ into the ranks of the comfortably-off looms large in American, British and Australian culture, since individuals rarely figure in theoretical explanations, their variability remains

BP

Year

Employer (%)

Self-employed (%)

Employee (%)

Unemployed (%)

Australia

1933 1947 1954 1961 1971 1976 1981

11.7 7.9 6.9 6.6 5.5 5.8 6.2

19.5 14.1 11.5 10.4 7.5 9.7 10.2

– 76.8 79.2 78.9 84.8 84.0 83.2

25.0 2.6 1.4 3.5 1.6 4.0 5.3

The Netherlands

1933 1947 1954 1961 1971 1976 1981

10.0 8.7 3.0 5.2 2.4 7.9 8.2

16.1 13.1 7.9 8.7 4.8 14.5 15.9

41.1 78.0 87.1 80.0 90.0 77.3 75.9

19.6 3.5 1.4 5.5 2.4 3.6 4.7

Greece and Cyprus

1933 1947 1954 1961 1971 1976 1981

17.7 33.7 19.4 8.2 5.8 6.9 9.1

22.7 23.9 15.3 9.1 8.4 13.7 16.8

37.5 41.7 60.1 71.8 83.1 79.0 73.8

15.7 5.7 3.6 10.3 2.1 4.4 6.8

Italy

1933 1947 1954 1961 1971 1976 1981

13.5 15.0 6.1 5.8 6.6 7.8 8.6

23.9 36.8 13.3 11.5 9.8 14.5 15.4

39.3 47.3 78.7 75.2 81.8 77.3 75.7

11.9 3.0 1.2 6.8 1.3 3.1 4.0

Note: Censuses 1933, 1947, 1954, 1961, 1971, 1976 and 1981 – males Source: ABS Data for Australia

an enigma, and their motivations and actions far from clear (De Vries, 1977, p. 36; Keesing, 1981, p. 286; Greenfield and Strickon, 1986, p. 333). This is a major oversight, given that it is individuals who pursue self-employment; recognise, discover and exploit opportunities; mobilise personal contacts, devise new business behaviours, copy the behavioural choices of others around them, or adopt alternatives to bring about the goals or ends they desire. This fact is not overlooked by influential economist Joseph Schumpeter, who postulated as early as 1934 that the ultimate explanation of economic conduct was to be found in non-economic factors and that these were brought into play by the actions of individuals operating in the market (Greenfield and Strickon, 1986, p. 14; Swedberg, 1991). Palmer (1984) characterises the self-employed immigrant as a ‘‘self-made culture entrepreneur’’ who acquires all his skills, experience and capital after

Immigrant enterprise in Western Australia 45

Table III. Australia-wide, birthplace by labour market status

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emigrating and invests them in an enterprise bearing the attributes of his ethnic group. He illustrates his point with the story of Leoni, a ‘‘self-made Britalian’’, described as: . . . appearing to have been very conscious of his ethnicity, its drawbacks and its advantages, and to have used it, in an occupation where it was already an advantage, to prepare himself for independent entrepreneurship. Thus in 1926, at the age of 31 with . . . years of accumulated experience in restaurants and hotels and £800 in savings, he opened a small restaurant in Soho with seven tables. His aim was to make Italian cuisine as ‘‘snob’’ as French cuisine, and after 40 years as a restaurateur in expanding premises in the same street, he and his Quo Vadis (for that is what he called his restaurant) had become institutions (Palmer, 1984, p. 98).

Palmer’s monograph of Leoni is also important because it reflects the extent to which researchers and individuals associate immigrants’ entrepreneurial success with the possession of specific character traits (ambition, strong work ethic, commitment to long hours and hard work, determination and independence). Described as a man of exceptional motivation and energy, Palmer adds that real success only came when Leoni was well into his 50s, and at considerable cost to his health. That Leoni’s notable success was not, as Palmer (1984, p. 98) points out, within the reach of every peasant son who emigrated to London with dreams of eventual independence and entrepreneurship emphasizes yet again that it is a difficult goal to realise and often takes years to actualise. It is notable that the overwhelming majority of WA entrepreneurs interviewed attribute their commercial and/or financial success to the ‘‘entrepreneurial character traits’’ they acquired overseas, growing up in a business background or working in a relative’s business. For example, Franco Zamin, an Italian from Treviso, associates his industriousness, diligent, hardworking, entrepreneurial bent with the ‘‘San Fiorese character’’ because the San Fiorese idealise and consider ‘‘typical’’ hardworking and industriousness (Baldassar, 1994, p. 95). ‘‘Being one’s own boss’’ is also considered a very acceptable way for Italians to discharge sistemazione – the cultural expectation to set up one’s children economically (Baldassar, 1994). Prestige is another influential driving force. Silverman (1975, p. 193) noted that the Italians he observed were admired as much for having workers under them as they were for earning more money[20]. Castellorizians add determination to the qualities they admire and present the entrepreneur as a person who succeeds despite having undergone significant trials and tribulations. Second generation Castellorizians most often hold the strong and self-confident child minder grandmother responsible for having transmitted the cultural patterns of Greek workplace behaviour, and indoctrinating them with the notion that they would make it in business[21]. Correspondingly, Dutch informants characterise themselves as driven by the Calvinist and Stoical values of discipline, sobriety, frugality, self-denial (for future gain), parsimony, industry, obedience, self-possession, a sense of duty and responsibility, and as ‘‘workaholics’’ and proud of it (Bagley, 1973: Schama, 1988, p. 125; Huggett, 1971). Astuteness and being prepared to put in long and

arduous hours is also considered integral to Chinese Vietnamese business Immigrant success, for only then has their hard work and effort received its appropriate enterprise in reward (Inglis, 1988). It is the way individual Chinese can maximise ties in Western Australia extended family systems and pay homage to their ancestors. Gold (1988, p. 417) notes that the Soviet Jews, in particular Ukrainians from the port city of Odessa, link their considerable entrepreneurial achievements to their ‘‘hustling 47 mentality’’. Huber (1977), Silverman (1975), Baldassar (1994, p. 95), Pitt-Rivers (1954) and Schneider and Schneider (1976) observe that being furbi, that is cunning/clever, is a highly regarded quality in Italian culture, and is considered the most powerful incentive driving entrepreneurship throughout that region. Light cites the high value placed by Scots traders on personal thrift – a trait they imported from Scotland as an example of the psycho-logistic resources which individual’s uphold that foster immigrant entrepreneurship (1984, p. 21). Individual immigrant entrepreneurs tend to measure their success as entrepreneurs in terms of their achievement of these traits. As Hall (1996, p. 2) has explained: . . . identification is constructed on the back of a recognition of some common or shared characteristics with another person or group, or with an ideal, and with the natural closure of solidarity and allegiance established on this foundation.

Edgar (1980, p. 146) notes that the values that one strives for are transmitted through the lessons learned in the family, at school, at work and in everyday interaction with others: ‘‘we are told what is valued in a [our] society or group [or family]; and what cultural norms, ideas, and attitudes are seen as desirable’’. His views gain support from Barth (1969, pp. 35-6), who notes that: . . . beliefs and strategies involved in the exercise of choice and the making of decisions all rest on personal evaluations and these choices are the translation of general ends or values of group range into terms which are significant for the individual.

At the level of the individual where these ideals become a desirable goal they are incorporated into ‘‘a character building’’ process. Campbell’s (1991, p. 94) concept of ‘‘character’’ best explains how individuals acquire entrepreneurial ‘‘traits’’. For Campbell, in contrast to personality, a term that usually covers the sum total of an individual’s psychological and behavioural characteristics, ‘‘character’’ is the name given to the entity that individuals consciously strive to create out of the raw material of their personhood: . . . character covers only that portion of the conduct of individuals for which they can be expected to take responsibility and is the entity imputed to underlay and explain the willed aspect of behaviour. As such it has an essentially ethical quality not possessed by the concept of personality. Although in some cultures there is a stress on the giveness of certain qualities of character . . . there is usually, in addition, clear recognition of the fact that individuals themselves are responsible for making their own character and hence should be rewarded or blamed accordingly. Given that individuals themselves usually share this view, it becomes possible to regard their behaviour as governed by character considerations and especially as a concern to bring their own conduct into line with an ideal (Campbell, 1991, pp. 92-5).

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It is on the basis of this process, of taking on desired traits to achieve highly valued cultural ideals, that the need to incorporate a human agency dimension into the study of immigrant entrepreneurship is established[22]. These findings further illustrate the point that any comprehensive account of an immigrant group’s entrepreneurial behaviour must bring together not only the determinants of Kloosterman et al.’s (1999) ‘‘mixed embededness model’’ – ‘‘ethnic resources’’, the ‘‘opportunity structures’’ and the host country’s socio-cultural, economic and institutional context – but also the various types of human agents. In this instance first and second generation and second wave entrepreneurs located in their historical, socio-economic, cultural and ethnic context consolidate these with broader contextual influences including the receiving economy, urban processes and institutions, as outlined by the ‘‘structures of relevance’’ above. Only then can the meaning of the differences in entrepreneurial style between individuals, immigrant groups and generations be determined, and the move from employment to entrepreneurship, which the individuals in this study came to consider as important and worthwhile, become comprehensible. Notes 1. The Small Business Development Corporation Fact Sheet (1999) defines a small businesses as independently owned and operated; managed personally by the major investor and, if non-manufacturing, employing less than 20 people and, if manufacturing, less than 100 persons. 2. The quotes in this article are derived from the author’s PhD, which was based on 255 oral history interviews she conducted with Greek, Italian, Dutch and Vietnamese immigrants between 1992 and 1999. The European groups were chosen because they have selfemployed profiles above the national average of the Indochinese, because Asian immigration to Australia is becoming more prominent and their business behaviour is even less understood than that of Europeans. 3. WA immigrants currently (1996) own nearly 40 per cent of the enterprises in the state’s small businesses sector. If we were to add the second generation to this figure, immigrant entrepreneurs would comprise the majority of small businesses in WA (Collins, 1989, p. 18). 4. Written in Dutch, they are unfortunately not accessible to everyone. 5. Unfortunately, apart from Boissevain and Grotenbreg, the books are only available in the Dutch language. 6. The paper does not deal with gender issues except to state that the WA data showed that the majority of immigrant women in the WA sample were in partnership with their spouse or another family member, and less than 7 per cent were sole traders (Peters, 1999). 7. One of the main forces motivating the anti-immigration debate in Australia at this time, and during much of the twentieth century, was the paranoid attitude of the union movement towards ‘‘cheap’’ foreign workers. Over the course of the nineteenth century many land owners in WA (particularly during the 1840s to 1960s) sought to import cheap labour from China and India. It was hoped to use them to offset the high cost of ‘‘white’’ labour. Aboriginal labour was cheap but considered less robust than Asians. Among the cane sugar growers in Queensland this was expressed in ‘‘blackbirding’’ with knackers (use of South Sea Islander labour). 8. By 1981, 30 per cent of all fruit and vegetable stores, Australia wide, were Italian owned and operated (Collins, 1989).

9. Castellorizians had for centuries traversed the entire Mediterranean, exchanging primary products from the nearby ports of Asia Minor for foods and textiles from Egypt and further afield. Being the only safe harbour between Beirut and Makri, the island had exploited its position to develop considerable small-scale trade (Price, 1963, pp. 33-4). 10. Sponsorship, by relatives or friends already in Australia was their most prevalent mode of emigration. This trend continued into the post-war period when only 40 per cent of Greeks and 20 per cent Italians received government assistance (Yiannakis, 1996). 11. He gained knowledge of the English language from his co-ethnic peers and Australian consumers. 12. Werbner’s ‘‘culture of entrepreneurship’’ echoes Schumpeter’s ‘‘swarm of entrepreneurs’’ (Swedberg, 1991, p. 41). 13. Beijer et al. (1961) noted that the desire to be self-employed was strongest among those 45 years and older, among whom nearly 75 per cent desired to be self-employed. Moreover, they claimed the desire to be self-employed was strongest in prospective Dutch emigrants, among whom personal ambition was uppermost. Beijer et al. (1961) noted that among those who cited self-employment as the principal motive for emigrating that 7 per cent had achieved this within two years and 30 per cent of these had been self-employed in The Netherlands – although not always in the same occupation. Around 37 per cent were in the building trades (carpenters, plasterers, brick layers, painters); the others range from rag-and-bone-man to bee keepers (the sample contained no agrarians) (Beijer et al., 1961, p. 288). 14. It was necessary to rely on anecdotal evidence because Australian Bureau of Statistics (ABS) Census data do not make such a distinction. 15. Erstwhile refugees – Chinese who were often twice migrants, having first moved from China to Vietnam and later to Australia – were nevertheless extremely grateful to be given the opportunity to utilize their many significant skills. 16. Starting a new life in a host environment is much more precarious for refugees than economic immigrants because refugees are rarely able to plan for life in a new setting. After a period of time in a migration reception centre most Vietnamese moved into cheap housing in the inner city as successive waves of the Greeks and Italians had done before them. 17. However, not all proprietors defined success in the same way some measured it in financial terms others from the perspective of social capital. 18. I follow Palmer (1984, p. 99) and define the second generation as the sons or daughters of an immigrant, born in the host country, or born overseas and educated and socialised in the host country. The Australian-born do not appear on the cross-cultural statistical tables. 19. Palmer (1984) describes such entrepreneurs as ‘‘culture suppressed’’. 20. The importance of the possession of these ‘‘character traits’’ to the business success of pioneer/initiators Luisini and Auguste is also made evident by their biographers (Yiannakis, 1996; Strano, 1986). 21. The grandmother’s reward, ‘‘. . . was having grandson who becomes an entrepreneur or scholar; a man whose activities stood as a source of pride and moral value’’ (Yiannakis, 1996, p. 196). 22. In my PhD thesis (Peters, 1999) I develop this concept of human agency further with reference to Schutz and Luckmann’s (1979) ‘‘Experienced structures of relevance’’ because of the structure associates a ‘‘human agent’s’’ options and choices, with the perceptions, experiences, thoughts and actions an individual acquires from residing in and negotiations with the significant others in their specific socio-cultural, economic and historospatial life world (cited by Eriksen, 1997, pp. 250-1).

Immigrant enterprise in Western Australia 49

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References Appleyard, R.T. (1956), ‘‘The economic absoption of Dutch and Italian immigrants into Western Australia 1947 to 1955’’, R.E.M.P. Bulletin, Vol. 4. No. 4, pp. 87-101. Appleyard, R.T. (19560, ‘‘The economic absoption of Dutch and Italian immigrants into Western Australia 1947 to 1955’’, R.E.M.P. Bulletin, Vol. 4 No. 3, pp. 45-54. Australian Bureau of Statistics (ABS), WA Census of Population and Housing 1933 to 1991. Bagley, C. (1973), The Dutch Plural Society: Comparative Study in Race Relations, Oxford University Press, London. Baldassar, L.V. (1994), ‘‘Visits to the shrine: a study of migration as transnational interaction between the San Fiorese in Western Australia and Northern Italy’’, unpublished PhD thesis, University of Western Australia, Crawley. Barth, F. (1969), ‘‘Introduction’’, in Barth, F. (Ed.), Ethnic Groups and Boundaries: The Social Organization of Culture Difference, Scandinavian University Books, Oslo, pp. 9-38. Beijer, G., Frijda, N.H., Hofstede, B.P and Wentholt, R. (1961), Characteristics of Oversea Immigrants, Government Printing and Publishing Office, The Hague. Bidney, D. (1957), Theoretical Anthropology, Columbia University Press, New York, NY. Boissevain, J. (1984), ‘‘Small entrepreneurs in contemporary Europe’’, in Ward, R. and Jenkins, R. (Eds), Ethnic Communities in Business, Cambridge University Press, London. Boissevain, J. and Grotebreg, H. (1985), ‘‘Ethnic enterprise in The Netherlands: the Surinamese of Amsterdam’’, in Goffee, R. and Scase, R. (Eds), Entrepreneurship in Europe, Croom Helm, London. Boissevain, J. and Grotenbreg, H. (1986), ‘‘Culture, structure and ethnic enterprise – the Surinamese of Amsterdam’’, Ethnic and Racial Studies, Vol. 9 No. 1, pp. 1-23. Boissevain, J. and Grotenbreg, H. (1987), ‘‘Survival in spite of the law: Surinamese entrepreneurs in Amsterdam’’, Revue Europe´ene des Migrations Internationales, Vol. 3 Nos 1/2, 1er-3e trimestre. Bonachich, E. (1973), ‘‘A theory of middleman minorities’’, American Sociological Review, No. 38, pp. 583-94. Bovenkerk, F., Eijken, A. and Bovenkerk-Teerink, W. (1983), Italiaanse Ijs: De Opmerkelijke Historie van de Italiaanse Ijs Bereiders in Nederland, Boom Meppel, Amsterdam. Bun, C.K. and Hui, O.J. (1995), ‘‘The many faces of immigrant entrepreneurship’’, in Campbell, C., 1991, ‘‘Reexamining mills on motive: a character vocabulary approach’’, Sociological Analysis, Vol. 52 No. 1, pp. 89-97. Campbell, C. (1991), ‘‘Reexamining mills on motive: a character vocabulary approach’’, Sociological Analysis, Vol. 52 No. 1, pp. 89-97. Castles, S. and Collins, J. (1989), ‘‘Restructuring migrant labour markets and small business’’, Wollongong, Centre for Multicultural Studies, University of Wollongong, Occasional Paper Series No. 16. Castles, S. (1988), ‘‘Migratory process, ethnic relations and labour market segmentation’’, in Holton, R.J. (Ed.), Immigration, Multiculturalism, and Economic Development, Centre for Multicultural Studies, Flinders University of South Australia. Collins, J. (1989), ‘‘Capuccino capitalism: Italians and small business in Australia’’, Working Paper No. 3, Centre for Labour Studies, Kurangai College of Advanced Education. Collins, J., Gibson, K., Alcorsco, C., Castles, S. and Tait, D. (1995), A Shop Full of Dreams: Ethnic Small Business in Australia, Pluto Press, Sydney. Duncan, H. (1976), ‘‘Communication, art and victims’’, in Cuzzort, R. and King, E. (Eds), Humanity and Modern Social Thought, The Dryden Press, Chicago, IL.

Edgar, D. (1980), Introduction to Australian Society: A Sociological Perspective, Prentice-Hall of Australia Pty Ltd, Melbourne. Eriksen, T.H. (1997), ‘‘Mauritian society between the ethnic and the non-ethnic’’, in Vermeulen, H. and Govers, C. (Eds), The Politics of Ethnic Consciousness, Macmillan, London. Evans, M.D.R. (1989), ‘‘Immigrant entrepreneurship: effects of ethnic market size and isolated labour pool’’, American Sociological Review, Vol. 54, pp. 950-62. Gava, D. (1978), ‘‘The history of Italian migrants in Osborne Park Wanneroo 1900-1950’’, MA thesis, Department of History, University of Western Australia. Gilchrist, H. (1991), Australians and Greeks, The Early Years, Vol. 1, Halstead Press, Sydney. Gold, S.J. (1988), ‘‘Refugees and small business: the case of Soviet Jews and Vietnamese’’, Ethnic and Racial Studies, Vol. 11 No. 4. Greenfield, S.M. and Strickon, A. (1986), ‘‘Entrepreneurship and social change’’, Monographs in Economic Anthropology, No. 2, University Press of America, Lantham. Hall, S. (1996), ‘‘Who needs ‘identity’? The introduction’’, in Hall, S. and du Gay, R. (Eds), Question of Identity, Sage, London. Huber, R. (1977), From Pasta to Pavlova: A Comparative Study of Italian Settlers in Sydney and Griffith, University of Queensland Press, St Lucia. Huggett, F.E. (1971), The Modern Netherlands, Praeger, New York, NY. Inglis, C. 1988, ‘‘Chinese in the Asian Pacific region’’, Immigration, Multiculturalism and Economic Development, Centre for Multicultural Studies, Flinders University, Adelaide, South Australia. Jackson, J. (1979), ‘‘Changing patterns of post-war immigration to Western Australia’’, in Johnston, R. (Ed.), Immigrants in Western Australia, University of Western Australia Press, Crawley. Keesing, R. (1981), Cultural Amthropology: A Contemporary Perspective, Holt, Reinhart & Winston, New York, NY. Kets de Vries, M.F.R. (1977), ‘‘The entrepreneurial personality: a person at the crossroads’’, Journal of Management Studies, Vol. 14 No. 1, pp. 34-57. Kloosterman, R., van der Leun, J. and Rath, J. (1999), ‘‘Mixed embeddedness. (In)formal economic activities and immigrant business in The Netherlands’’, International Journal of Urban and Regional Research, Vol. 23 No. 2, June, pp. 253-67. Kloosterman, R., van der Leun, J. and Rath, J. (1998), ‘‘Across the border. Immigrants’ economic opportunities, social capital and informal business activities’’, Journal of Ethnic and Migration Studies, Vol. 24 No. 2, pp. 249-68. Knowles, J. (1988), ‘‘The Vietnamese in Western Australia: adaptation and resettlement’’, PhD thesis, Department of Anthropology, University of Western Australia. Lampugnani, R. and Holten, R. (1992), ‘‘Ethnic business in South Australia: a sociological profile of the Italian business community’’, Centre for Multicultural Studies, Adelaide, Flinders University of South Australia, Report, Office of Multicultural Affairs. Li, P. (1993), ‘‘Chinese investment and business in Canada: ethnic entrepreneurship reconsidered’’, Pacific Affairs, Vol. 66 No. 2, pp. 219-43. Light, I. (1972), Ethnic Enterprise in America: Business and Welfare Among Chinese, Japanese and Blacks, University of California Press, Los Angeles and Berkeley, CA. Light, I. (1979), ‘‘Disadvantaged minorities in self-employment’’, International Journal of Comparative Sociology, Vol. XX Nos 1-2, pp. 31-45. Light, I. (1984), ‘‘Immigrant and ethnic enterprise in North America’’, Ethnic and Racial Studies, Vol. 7 No. 2, pp. 195-216.

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Light, I. and Bachu, P. (Eds) (1993), Immigration and Entrepreneurship, Culture, Capital and Ethnic Networks, Transaction Publishers, New Brunswick. MacDonald Hales and Associates (1988), ‘‘Diversity is great mate’’, Report, Multicultural and Ethnic Affairs Commission, Perth. Miller and Swanson (1958, p. 123) cited by Light) (1984, p. 197)), ‘‘Immigrant and ethnic enterprises in North America’’, Ethnic and Racial Studies, Vol. 7 No. 2, p. 197. Palmer, R. (1984), ‘‘The rise of the Britalian entrepreneur’’, in Ward, R. and Jenkins, R. (Eds), Ethnic Communities in Business, Cambridge University Press, Cambridge. Peters, N. (1992a), ‘‘Italians in business in the inner city of Perth Western Australia’’, in Bosworth, R. and Ugolini, R. (Eds), War Internment and Mass Migration: The Italo-Australian Experience 1940-1990, Gruppo Editoriale Internationale, Rome. Peters, N. (1992b), ‘‘Immigrant entrepreneurs and the networks they utilise, Perth Western Australia’’, Proceedings the 22nd European Small Business Seminar. The Entrepreneur in the Drivers’ Seat, The European Foundation for Management Development and Centrum Voor Innovatief Ondernemerschap, Twente. Peters, N. (1996), ‘‘Dutch occupational adjustment in Australia’’, paper presented at the Colloquium on Dutch Migration to Australia RMIT, Melbourne, 24-25 June. Peters. N. (1999), ‘‘Trading places: Greek, Italian, Dutch and Vietnamese enterprise in Western Australia’’, unpublished PhD Thesis, University of Western Australia, Crawley. Peters, N. (2001), Milk and Honey but No Gold: Postwar Migration to Western Australia 19451964, University of Western Australia Press, Perth. Pitt-Rivers, J. (1954), The People of the Sierrra, The University of Chicago Press, Chicago, IL. Portes, A. and Stepick, A. (1986), ‘‘Unwelcome immigrants: lhe labour market experiences of (Mariel) Cuban and Haitian Refugees in South Florida’’, American Sociological Review. Price, C. (1963), Southern Europeans in Australia, Oxford University Press, Melbourne. Price, C. (Ed.) (1975), Greeks in Australia, Australian National University Press, Canberra. Rath, J. and Kloosterman, R. (2000), ‘‘Outsiders’ business. A critical review of research on immigrant entrepreneurship’’, International Migration Review, Vol. 34 No. 3, Fall, pp. 657-81. Sassen-Koob, S. (1986), ‘‘New York city: economic restructuring and immigration’’, Development and Change, Vol. 17, pp. 85-119. Schama, S. (1988), The Embarrassement of Riches: An Interpretation of Dutch Culture in the Golden Age, University of California Press, Berkeley, CA. Schneider, J. and Schneider, P. (1976), Culture and the Political Economy in Western Sicily, Academic Press, London. Schultz, A. and Luckmann, T. (1974), The Structures of the Life-world, Butterworh-Heinemann, London. Silverman, S. (1975), Three Bells of Civilisation: The Life of an Italian Hill Town, Columbia University Press, New York, NY. Strano, A. (1986), Luck Without Joy, Fremantle Arts Press, Fremantle. Swedberg, R. (Ed.) (1991), Joseph A. Schumpeter: The Economics and Sociology of Capitalism, Princeton University Press, Princeton, NJ. Vermeulen, H. and Govers, G. (Eds) (1994), The Anthropology of Ethnicity: Beyond Group Boundaries, University of Amsterdam, Amsterdam. Vermeulen, H. and Govers, C. (1997), ‘‘From political mobilisation to the politics of consciousness’’, in Vermeulen, H. and Govers, C. (Eds), The Politics of Ethnic Consciousness, Macmillan, London.

Vermeulen, H., van Attekum, M., Lindo, F. and Pennings, T. (1985), De Grieken, Coutinho, Muiderberg, The Netherlands. Victorian (Australia) Ethnic Affairs (1988). Viviani, N. (1982), The Long Journey: Vietnamese Migration and Settlement in Australia, University Press, Melbourne. Waldinger, R. (1986), ‘‘Immigrant enterprise – a critique and reformulation’’, Theory and Society, Vol. 15 Nos 1-2, pp. 249-85. Waldinger, R., Ward, R. and Aldrich, H. (1990), Ethnic Entrepreneurs, Vol. 1, Sage Series on Race and Ethnic Relations, London. Walker, J.C. (1988), Lout and Legends: Male Youth Culture in an Inner City School, Allen & Unwin, Sydney. Wallman, S. (Ed.) (1979), Ethnicity at Work, The MacMillan Press Ltd, London. Ward, R. and Jenkins, R. (Eds) (1984), Ethnic Communities in Business, Cambridge University Press, Cambridge. Werbner, P. (1987), ‘‘Enclave economies and family firms: Pakistani traders in a British city’’, in Eades, J.S. (Ed.), Migrants, Workers and the Social Order, A.S.A monograph No. 26, Tavistock, London. Werbner, P. (1990), ‘‘Renewing and industrial past: British Pakistani entrepreneurship in Manchester’’, Migration, Vol. 8, pp. 7-39. Yiannakis, J. (1996), Megisti in the Antipodes: Catellorizian Migration and Settlement to Western Australia 1890-1990, Hesperian Press, Perth. Zukin, S. (1987), ‘‘Gentrification: culture and capital in the urban core’’, Annual Review of Sociology, Vol. 13, pp. 129-47. Appendix Categories relevant to immigrant enterprise in Western Australia (1) First generation .

.

Pre-Second World War: Greek and Italian pioneer/sojourners who initiated chain migration from their homeland to Australia. Post-Second World War: Greek, Italian, Dutch and Vietnam-born self-employed.

(2) Second wave migrants .

The Italians and Greeks sponsored to Australia by the pioneers or first generation.

(3) Second generation .

.

Pre-Second World War: the children of pioneer Greeks and Italians – born overseas or in Australia. Post-Second World War: the overseas or Australia-born children of post-war Greeks, Italians, Dutch and Vietnamese immigrants.

(4) Ethnicity

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Unbalanced embeddedness of ethnic entrepreneurship The Israeli Arab case

54

Izhak Schnell Department of Geography, Tel-Aviv University, Israel, and

Michael Sofer Department of Geography, Bar-Ilan University, Israel Keywords Industry, Israel, Entrepreneurialism, Ethnic groups Abstract Ethnic entrepreneurs’ networks are analysed on the basis of three complementary dimensions: intensity and complexity of networks; power relations; and entrepreneurs’ horizons of awareness. The analysis is based on two theoretical propositions. First, firms located in the periphery are weakly embedded in national markets due to their external depended relations. Second, local firms use the tendency to embed themselves in their home regions as a strategy to improve their position in external power relations. The inquiry of Arab industry in Israel suggests that the form and degree of embeddedness of any given firm is affected by the existence of both separate economic milieus: Arab and Jewish. The findings lead us to suggest two concepts. First, over-embeddedness, which characterises Arab firms that are highly embedded in the local milieu, operate under the influence of kinship structures and a petrified supportive tissue that downgrades networks into cohesive coalitions opposing structural changes. Second, underembeddedness, which characterises firms that manage to develop and maintain wide inter-ethnic dependent sets of networks, but due to lack of power fail to transform them into more rewarding exchanges.

International Journal of Entrepreneurial Behaviour & Research, Vol. 8 No. 1/2, 2002, pp. 54-68. # MCB UP Limited, 1355-2554 DOI 10.1108/13552550210423714

Introduction Arab industry in Israel may be viewed as a peculiar form of peripheral industrialisation. It is peripheral in a number of ways: it is located in what is perceived as the national periphery; it specialises in old industries; it shows high dependence on local markets; and it had been integrated into the national economy under subordinating conditions. Nevertheless, industrial entrepreneurship is highly appreciated as an important means for economic mobility, and a significant share of Arab entrepreneurs managed to break ethnic barriers and access Jewish markets. About half of them even succeeded in expanding into markets in the national core (Schnell et al., 1999). However, only a few entrepreneurs have succeeded in translating their social networks into improved competitiveness in the market. A key issue in the study of local economic development is the degree to which firms and their networks are embedded in wider socially and politically structured milieus (Curran and Blackburn, 1994). In this context, particular attention should be devoted to minorities’ need to insert themselves in two different separate milieus – intra- and inter-ethnic ones. Despite the challenges This article is part of a special issue of papers entitled ‘‘The economic context, embeddedness and immigrant entrepreneurs’’ edited by Jan Rath, Robert Kloosterman and Eran Razin.

and barriers that each milieu may cause, entrepreneurs’ success in being embedded in both milieus and developing wide business linkages and networks is crucial for their integration into the economy as well as society (Aldrich and Waldinger 1990; Barrett et al., 1996). Arab entrepreneurs in Israel may demonstrate a typical case by facing both – the wider Israeli capitalist economy, largely dominated by the Jewish sector, and their own socio-economic system. This means that they have to face each sector’s value and norm system, which underlies the business culture and power relations – the power of firms to determine exchange relations. This article aims to propose an analytical framework for the explication of the degree and form of embeddedness of a marginal minority group operating in the periphery. Based on the experience of Israeli Arab entrepreneurs, we discuss some of the difficulties that minority entrepreneurs encounter in their attempts to break barriers of peripherality and ethnicity and to participate in both minority and majority business cultures, politics and information networks. We thus offer the use of two new concepts concerning embeddedness. The first concept, ‘‘over-embeddedness’’, characterises those entrepreneurs whose commitments to the local community and to kinship groups prevent them from exploiting opportunities in the external markets. The second concept, ‘‘underembeddedness’’, characterises those entrepreneurs who fail to exploit their external complex networks into an economic advantage in the markets. The data used here were collected from three primary sources: open interviews with 70 Arab industrial entrepreneurs performed between 1993 and 1996; a questionnaire addressed to the heads or secretaries of Arab local councils; and a questionnaire addressed to the owners and managers of 514 industrial plants in 35 Arab settlements performed in 1992. An industrial plant was defined as a production unit with at least three workers. The comprehensive questionnaire included items relating to all components of production, sources of labour and capital, marketing and purchasing of inputs. These sources enabled the gathering of information on industrial networks, strategies of survival, estimated barriers for growth and views regarding the future of their enterprises. The paper is organised in five sections. It begins with a short description of Arab industry in Israel, followed by a review of the theoretical issues concerning the analysis of embeddedness within the framework of ethnic relations. The third section focuses on the pattern of Arab enterprises’ networks. Sections four and five demonstrate situations of over- and under-embeddedness. Characteristics of Arab industrial production It took 50 years and three restructuring stages for Arab industry to achieve its current state of development. Three major mechanisms influenced these restructuring phases: majority-minority relations, core-periphery relations, and selective government policies (Sofer and Schnell, 2000). The result of the integrated operation of these mechanisms has affected the form of Arab industrialisation, including branch selection, plant formation and

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entrepreneurial style. On its development path, a strategy of growth from below was adopted, expressed by a rapid rate of growth in the number of new plants, particularly in the food, construction and textiles industry, coupled with the adoption of new styles of entrepreneurship. In each stage entrepreneurs expanded into new frontiers although they failed to expand into the privileged sectors of the economy (Khamaisi, 1984; Falah, 1993; Schnell et al., 1999; Sofer and Schnell, 2000). Data gathered in the early 1990s have shown that industry has spread among the 60 settlements that represent the majority of those Arab settlements boasting a population of over 5,000. Compared with the 1980s, plants employing three or more workers doubled in number, reaching more than 900 (Schnell et al., 1995), with the size of the industrial workforce employed in Arab settlements growing to about 12,000 (Atrash, 1992). National figures indicate that in the 1990s Arab-owned enterprises represented nearly 6 percent of all Israeli plants employing five or more workers (Central Bureau of Statistics, 1992). The pattern of branch specialisation by labour force appears in Table I. It emphasises the dominance of old industries, which are labour intensive and which show high profitability by unit of investment and by unit of production. About 43 per cent of the enterprises are made of small household production and subcontracting activities. In 1992, the average number of employees per plant was about 15, a high percentage of whom were women, employed primarily in sewing shops. Despite the increase in their mobility, most women work in the settlement in which they reside (Atrash, 1992). Almost two-thirds of the plants are located in residential areas, especially on the ground floor of the owner’s home or in rented residential buildings. Where an industrial area is available, it is of inferior quality and lacking an appropriate physical infrastructure (Sofer et al., 1996). The labour force usually lack formal training, Per cent

Table I. Branch specialisation index of the labour force in plants with three employees or more, 1992

Specialised branches Textiles and clothing Construction materials Woodworking

4.2 3.7 1.5

Marginal branches Food and beverages Metal products Paper and printing Rubber and plastics Electronics and electricity

0.4 0.2 0.2 0.2 0.002

Notes: The figures for Israeli industry are from 1989, those for Arab industry from 1992. Specialisation index is the rate of employee distribution by branch in the Arab sector, as compared with the branch distribution in Israeli industry as a whole Sources: Schnell et al. (1995)

and most of the workers’ training is done on the shop floor. For most entrepreneurs, personal savings are the most common source of initial capital investment, while other family members are also an important source. The most common type of ownership is individual or family (83 per cent), where several brothers own and manage a plant.

The Israeli Arab case

Firms and their embedded networks The synthesis of material that has been published in recent years on the complex relations between firms and their embedded networks shows that the study of industrial geography is increasingly concerned with the socio-spatial organisation of industrial firms and their networks (Barnes and Gertler, 1999; Yeung, 2000). To wit, firms’ competitiveness and growth, and the resulting regional growth, requires firms’ embeddedness in concrete ongoing (local, regional and/or national) systems of social relations (Grabher, 1993). Networks may be seen as both a governance mode and a process of socialisation through which different actors and institutions perform exchange relations, which are connected in a coherent manner for mutual benefit (Hakansson and Johanson, 1993; Yeung, 2000). In this context there exists a variety of networks of which the major ones are marketing and suppliers, information and innovations networks, and production networks based on labour and capital recruitment. These networks can be formal as well as informal (Malecki and Tootle, 1996), based on resource sharing (Perry and Goldfinch, 1996) as well as on decentralised learning and knowledge (Maskell and Malmberg, 1999). They are, however, often embedded in communities and localities with strong (formal and informal) institutional legacies and linkages (Waldinger, 1995; Grabher and Stark, 1997; Perry, 1999). In several studies the intensity and the dynamic of inter-firm linkages and networks are treated as indicators for economic growth (Grabher, 1993; Taylor, 1995; Oinas, 1999), while external networks have a particularly decisive impact on small plants’ growth chances (Kay, 1993; Hardill et al., 1995). The key issue in these investigations is the degree to which firms are embedded in various markets through their relationships with competitors, suppliers, business organisations and public decision-making forums, as well as with members of their community (Best, 1990; Harrison, 1992; Lakshmanan and Okumura, 1995). Generally speaking, embeddedness tends to refer to the three perspectives of cultural, socially structured and institutional milieus in which entrepreneurs perform as economic agents. From the cultural perspective, embeddedness may be viewed as processes in which agents acquire customs, habits, or norms in an unerring way that unintentionally determine their decisions and behaviours, and structure of awareness to their relevant milieus. From the structural perspective, embedded networks may be characterised by agents’ connectedness, reciprocity, interdependence, autonomy, and power relations in terms of control over both economic and social relations (Grabher, 1993; Portes and Sensenbrenner, 1993). Embeddedness, from the institutional perspective, relates to agents’ accessibility to education and training institutions, incubation

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and innovation centres, market organisations, business associations, and business practices which regulate particular markets (Todtling, 1994; Kloosterman et al., 1999). Networks of small firms, economic and non-economic linkages, may be divided into two main types (Curran and Blackburn, 1994; Bennett, 1998): those related to the firm such as membership of local chambers of commerce, trade associations, and so on; and those not related to the business directly but which reflect embedded relations such as owners’ social relations, political party membership, leisure activities, and friendship and family relations. These linkages are seen as indicators of the level of integration into the economy and of the small firm’s embeddedness. Looking from another angle, Uzzi (1996, pp. 693-4) suggests that ‘‘the network acts as a social boundary of demarcation around opportunities that are assembled from the embedded ties that define membership and enrich the network’’. In this context the type of ties used by the entrepreneur to be linked to the network’s partners dictate the firm level of embeddedness. Talmud and Yanovitzky (1998) offer a specific model for the analysis of a firm’s embeddedness. In line with Grabher (1993) and Oinas (1999), they analyse networks within cultural and power fields. Networks, according to them, should be analysed less in terms of number of links and intersections and more in terms of power relations and horizons of the players’ awareness. Moreover, embeddedness is related to different sectors of society, such as political and economic e´lite and institutions, and structure of market networks. Politically, evidence shows that firms closely attached to political centres better succeed in appropriating benefits for their operation and developing greater autonomy in their relations with governments (Talmud and Mesch, 1997). Market autonomy may be achieved by maximising information flow about market opportunities and conditions, as well as by developing reciprocal relations rather than dependency relations (Burt, 1992). Regarding ethnic entrepreneurs, when they try to escape their limited ethnic enclave economy they are forced to keep their links with their ethnic milieu and at the same time establish links with the majority milieu. Only by understanding entrepreneurs’ need to operate in and out of their own milieu may embeddedness, encompass its original meaning, concerning the interplay among economic, social and institutional contexts of ethnic entrepreneurship (Kloosterman et al., 1999). The case of Israeli Arab ethnic minority requires the recognition that there are deep cultural, economic and political gaps between the Jewish and the Arab milieus. Arabs are economically, politically and culturally marginalised (Falah, 1993; Haidar, 1993) in an economy that is highly politicised. Entrepreneurs may frequently act as a Yanus goddess while turning their faces toward the two different milieus. This form of mixed embeddedness means that in each milieu they are required to link themselves to the market players as well as to the economic and political e´lite and institutions (Figure 1). Entrepreneurs operating in the Arab milieu are highly dependent on kinship relations in recruiting

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Figure 1. A general model of mixed embeddedness

resources and developing markets. They use personal contacts with local political and economic e´lite to support their operations. Encapsulation in intraethnic markets is used as a survival mechanism resulting in a situation where a large number of small enterprises compete in the limited local markets. Regarding the Jewish milieu, the challenge of overcoming political, social and cultural barriers is crucial for Arab entrepreneurs. Breaking these barriers may enable them to penetrate the larger markets, to get a long-standing grasp on these markets and to avoid dependency relations. The most severe barrier is the power exerted by large corporations which dominate the markets. Entrepreneurs’ embeddedness within such milieus (Figure 1), may be measured in terms of the complexity and intensity of networks, power relations and horizons of awareness (or the ability to accommodate themselves) to the codes of the two business cultures, opportunities and risks. This system has experienced a number of restructuring processes by which types of entrepreneurship and institutions were transformed. Within such a process the Arab entrepreneur has been required to counterbalance his embeddedness in each milieu. Our argument is than that well-balanced embeddedness means mutual and integrated co-ordination of the three dimensions (networks complexity and intensity, power relations and horizons of awareness), while lagging behind in one of them may lead to an unbalanced embeddedness. The

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dilemma is: what is the embeddedness level required by any firm in order to survive? Two concepts that may identify imbalances in entrepreneurs’ embeddedness are offered here. First, ‘‘over-embeddedness’’, defined here as a case when entrepreneurs manoeuvred their kinship and community systems to support their entrepreneurship, and the resulting commitment, which impedes them from participating in inter-ethnic markets. Second, ‘‘under-embeddedness’’, defined as entrepreneurs’ success in developing intensive and complex interethnic networks, while failing to gain adequate evaluation capabilities of relevant business opportunities and enough power to translate the complex networks into economic growth and development. Not being able to find the proper balance, entrepreneurs may be entangled and locked in the local ethnic networks, thus being pushed to a state of over-embeddedness. Likewise, they can be forced to compete in the inter-ethnic markets where they may face an uneven status and be trapped in dependency relations, which means operating in an environment of under-embeddedness. Firms and networks in the Arab sector The pattern of embeddedness of Arab enterprises is studied here through the analysis of firms’ business networks, leaving the analysis of the other two dimensions of embeddedness (power and horizon of awareness) to the following sections. Arab industries demonstrate high dependency on inputs supplied by firms based in the national core (Schnell et al., 1995). The Arab economy supplies less than one-quarter of the raw materials, leaving most of the profit chain derived from the production cycle to the Jewish sector. Regarding sales, although close to two-thirds of the sales are directed mainly to the Arab regions, it seems that for most regions 30 to 40 per cent of sales are aimed at Jewish markets. Purchasing and sales links were subdivided into meaningful sub-markets, based on major prevailing structural barriers in the Israeli space economy: ethnicity; marginality and regional scale (Schnell et al., 1999). There are five main sub-markets: intra-settlement; Arab home region; neighbouring Jewish region; national core; and Arab inter-regional markets. Most enterprises tend to sell to two or three markets, with 13 per cent selling to four and five markets (Table II). All the textile enterprises, and close to one-third of all other plants No. of markets 1 2 3 4+ All markets

Percentage plants 17 35 35 13 100

Percentage overcoming barrier Ethnicity Peripherality 33 (98) 34 92 100 71

0 (93) 24 48 48 48

Table II. Percentage of Arab owned plants by number of markets and Note: The table refers to all 514 Arab owned plants surveyed, the number in brackets is the percentage for textiles enterprises only type of barriers

which sell only to one market, chose the more rewarding but risky Jewish market, and more than one-third of those that sell to two markets sell to at least one Jewish market. Almost all enterprises that sell to more than two markets sell also to Jewish markets. This means that ethnic barriers are frequently overcome, as many of the entrepreneurs confirmed in the open interviews. Another example of dependency on suppliers is the information network. About 60 per cent of the entrepreneurs receive information about technological innovations from suppliers. Professional journals and other publications are the second most important source (Sharkia, 1996). Recruiting employees is mainly based on the local network. The home settlement is the main provider of labour force, with about one-third from the employer’s clan (hamula). Members of the extended family may serve as managers and clerks, while the majority of manual workers are from other local families. Jewish employees form less than 1 per cent of the labour force in Arab enterprises, mainly in specific and qualified jobs such as engineers and sales managers. Altogether, the sale linkages of Arab entrepreneurs are wide and complex, while all other linkages with other aspects of the networking process are relatively limited. Yet, particular main issues should be clarified. Do they manage to achieve reciprocal power relations in the business milieu they operate in? Do they manage to achieve better access to information flows, evaluation capabilities and other aspects of both business cultures they operate in? We now discuss entrepreneurs’ positions within their networks. The Arab milieu and the over-embedded firm Over-embeddedness characterises some Arab firms that are highly embedded in the local milieu, and operate under the influence of kinship structures and a petrified supportive tissue that downgrades networks into cohesive coalitions, opposing radical innovations and even minor changes. The business culture adopted by firms’ owners impedes possibilities for integration in the larger market economy. Many Arab entrepreneurs have experienced the condition of over-embeddedness within the Arab milieu. Since most of them opened their businesses with intensive support of the extended family and the home community, they feel indebted to their supporters once they have succeeded. The story of the owner of a concrete block factory, who complained about his two brothers, may demonstrate the dilemma: It’s bad because I can’t give instructions to my brothers freely. I have to consult with them and accept all their crazy ideas. I also can’t fire a brother or reprimand him. It’s a serious problem for the work in the factory. I’d rather work with managers from outside the family. I could demand from them what I think should be done and could fire them if they weren’t good.

It seems that this example describes the situation of many Arab entrepreneurs who feel obliged to support their relatives. It is a reciprocal support for relatives’ contribution to the initial investment, for allocating space for the

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plant, and for moral support. Moreover, in some cases it is wider support as entrepreneurs can rely on the clan as a guaranteed market. The close embrace of the family and the community means less freedom for a change in plant location. Being located in the residential area means restriction on the possibility for business expansion due to the fact that space is limited and the local infrastructure is inadequate. The will to move out to industrial zones is very limited by the fact that these rarely exist in Arab towns. The following example demonstrates the problem of overembeddedness: In order to expand I had to move to an industrial area. My place was too small for the plant. We have an industrial area, but with no infrastructure. There is no sewage, road, and electricity, not mentioning a building. To build all of it on my own is too expensive for me. So I decided to check the possibility of leaving to the industrial zone of the Jewish neighbouring town. The extra expenses for renting the place, the permit and so on, were so high that paying them would have forced me to sell at higher prices. This experience made me afraid that another small enterprise could be established in the entrepreneur’s family home in our town, stealing from me my local clients before I would gain even one new client outside my home town.

The obligation and indebtedness to extended family and clan matters, and the expense of recruiting professional skilled labour is a sort of limitation on the firm efficiency. In other words, it is also a form of restriction on the horizons of awareness of the entrepreneur and the economic potential. The next example emphasises the role of the extended family in managing the enterprise and in limiting access to other labour sources: I am the eldest. Two brothers work with me and three sisters sew. I am the manager but much of my time I search for customers. One brother manages the production line and the other the books. My sister learns how to use the computer. Each of us can cover the responsibility of the other brothers, a situation that gives us a lot of flexibility. As you see, the factory is a family project and its success is the success of the whole family.

The limitation on the horizons of awareness is also related to the absence of risk reducing mechanisms, which prompted the extended family to become the main source of entrepreneurial support. At the same time the family made demands on successful entrepreneurs that prohibit them from further economic growth. The same complaints may be heard from an owner of an enterprise: It turned [out] to be a big obstacle to work with my brothers. I have to consult them, to accept ideas that I know are harmful for the business and I cannot fire them. I owe them so much and any problem at work becomes immediately a family issue. From time to time one of my brothers needs some money urgently for a wedding, school or any other purpose and it forces us to hold further development. I feel that the partnership with my brothers enabled the establishment of the enterprise in the beginning, but it prohibits further development today when we are in a new era in which each family looks for itself.

Another aspect of over-embeddedness, which is related to entrepreneurs’ horizons of awareness, is concerned with the situation of a mixed milieu – operating in both the Arab and the Jewish milieus. An older entrepreneur told us:

Jews refuse to buy concrete blocks from me because I am an Arab. They discriminate against me because they prefer to provide work for Jews. My blocks are significantly cheaper and their quality is higher than the regular standard. Still I don’t get any Jewish customers. (Question: We do not see any quality control signature on your product, don’t you think that this is necessary in order to attract Jewish customers?) Answer: Everybody in the town knows me and knows the quality of my product. I don’t have to pay 10,000 Shekel for the quality control approval seal and Jews will never trust me anyway because I am an Arab.

Entrepreneurs are establishing themselves as an Arab economic e´lite that gains the support of the community at large, which capture the imagination of many frustrated youngsters who view entrepreneurship as a major route for mobility within Israeli society. Over-embeddedness then is articulated in the dominance of an intra-ethnic pattern of business networks, the power that entrepreneurs gain in their intra-ethnic milieu with respect to their weakness in inter-ethnic milieus (as will be demonstrated in the next section), and barriers imposed on entrepreneurs’ horizons of awareness. The advantages that Arab entrepreneurs gain in their intra-ethnic milieu encourage them to play according to the informal norms of conduct required in this specific reality, and to enjoy entrepreneurs’ independence even when channelled to a state of low profitability, typical of local markets. The preservation of this pattern reduces their chances of competing in the more rewarding markets of the Jewish milieu, where they should play according to different rules. Many of them prefer not to take the necessary risks and retain only their intra-ethnic networks. The over-embedded entrepreneur tends to remain contained in the safe and supporting milieu of his intra-ethnic stronghold. The use of over-embedded strategy may be initiated voluntarily by Arab entrepreneurs as a result of various entrepreneurial motivations, like political motivation to develop an autonomous economy. On the other hand, the use of over-embedded strategy may be viewed as a survival strategy adopted when barriers of ethnicity and peripherality are unbreakable. The persistence of such strategy may strengthen traditional institutions, and may result in the enlargement of the gap, in terms of economic behaviour, between both milieus. The repercussion of this is the entrepreneur’s decreasing prospect of penetrating and merging into inter-ethnic markets. The larger Israeli milieu and the under-embedded firm Under-embeddedness characterises some firms located in the periphery that manage to develop and maintain a wide though externally dependent set of networks. The owners of these firms are open to the erosion of the local supportive tissue of social practices and institutions, but did not manage to penetrate the highly rewarding markets. When they manage to get access into the wider markets they locate themselves within the network under conditions of dependency, where the firms and entrepreneurs on the other side of the network dictate the terms of exchange, leaving them with low profitability. Under-embeddedness is manifested in the context of inter-ethnic networks. It was shown in Table II that a significant number of Arab enterprises have a certain degree of access (in many cases only limited access) to Jewish markets,

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including the national core, through their sale linkages. These findings may lead to the conclusion that some Arab enterprises have developed intensive and complex networks with various segments of the national economy, including the relatively more privileged sectors. Nevertheless, Arab entrepreneurs fail to overcome their marginal position within the Israeli economic space. What thus can explain the discrepancy between relatively complex networks and the lack of economic growth? Our argument is that this failure is the results of the subordinate position Arab entrepreneurs occupy in the (non-local) external markets. Their power position within the business networks is weak, a discrepancy which is the setting for the formation of conditions for underembedded entrepreneurship. The type of linkages formed between Arab entrepreneurs and Jewish markets can be illustrated by the food industry. This industry combines modern technology with traditional methods of production. Traditional knowhow learnt from the ‘‘grandmother’’ is transformed into a modern production line. Such entrepreneurs, as shown below, base themselves on local networks and markets, but they search also inter-ethnic (relatively random and simple) networks without taking great risks. The idea to open a cheese factory crossed my mind when my grandfather told me how grandma had made great cheese from sheep’s milk. I used her recipe and I started to sell to people in the town. After a while I bought machines and I bought milk from other farmers in the village in order to increase production. We sell in most of the Arab settlements in the region and we have even Jewish customers. They come on Saturdays to buy in the shops in our town and we sell to them directly from the plant. Once a week I go to Tel Aviv to buy some raw materials so I sell cheese to some stores at the market. On my way home I also sell to a store in Nataniya.

The issue of power relations inside the networks is exemplified by some construction enterprises, which were able to take advantage of changes in the Jewish market, but they are very much dependent on Jewish expertise and know-how concerning access to markets. In the late 1970s and during the 1980s, the government promoted a self-construction housing policy, hoping to enable the able segments of the ‘‘new towns’’ and rural population to build new private houses and to remain in the peripheral regions of the country. Builders were ready to hire Arab construction contractors and to purchase construction material from Arab plants in their regions. Moreover, in the 1990s the large expansion of the construction industry as a result of the massive immigration from the former Soviet Union created shortages in construction materials. These events opened opportunities for Arab construction plants in the Jewish sector, which have been efficiently used for some time. The dependency conditions are illustrated here: Take the Sa’ida family from Peqi’in. They were small-scale producers of concrete blocks and building materials. When they started to grow, they hired a Jewish economist. He helped them, and today they deal in millions. All the settlements in the area work with them, even the Jewish ones. You have no choice. If you want to grow, you have to be modern. Small family businesses are okay, but you can’t drive a Mercedes 300 based on them. Among us there still

aren’t many with expertise in financing and banks, and we really feel the lack. So meanwhile, anyone who starts to grow has to hire a Jew.

The dependency relations are mostly emphasised in the case of entrepreneurs operating in the textiles industry as subcontractors for Jewish mother corporations. A high level of dependency on the mother corporation and Jewish customers means lack of power to create a degree of autonomy in the market. The following example may demonstrate some of the problems that such enterprises confront: When our plant gained the trust of our mother corporation we received a loan from them to buy sewing machines and we grew fast. I sent one brother to study machine engineering, my other brother to study management. The rest of the family accumulated 50,000 Shekel to help me. We received the support of workers from my extended family that manages women from the occupied territories. We are highly reliable producers and we gained a very good reputation everywhere. Now I plan to produce on my own and to sell to stores. I have to do it because I have only extremely marginal profit as a sub-contractor. I need more income to be able to help my family who have helped me.

It seems that entrepreneurs operating in the textiles and clothing branch were not able to make it independently. Staying in their home settlements means that they continue to be cut off from necessary information which could assist in the evaluation of financial and market possibilities. Alternatively, locating in Tel Aviv, searching for customers, attempting to follow leading enterprises and new trends in fashion meant loosing control over their production lines and even facing sanctions from their mother corporations. This dilemma stresses difficulties in expanding Arab entrepreneurs’ horizons of awareness into the Jewish milieu, which makes it extremely hard (to a certain degree) for them to develop evaluation capabilities. Earlier findings suggest that lack of developed industrial areas, investment capital and government subsidies, equivalent to those given to neighbouring development towns, are the three major barriers to enterprise development (Schnell et al., 1995). Yet, the in-depth interviews with a sample group of entrepreneurs shed light on the fact that Arab entrepreneurs have failed to embed themselves in the inter-ethnic milieu. Those who were willing to make any necessary effort to break these barriers even succeeded in exploiting marginal niches in Jewish markets, but they fail to expand into the more rewarding markets. Failure to determine sale conditions, inferior position in the networks, dependency on mother plants and limited horizons of awareness leave them with low profitability and a low rate of growth. Final remarks Our study demonstrates several examples of discrepancies among the three complementary dimensions of ethnic entrepreneurs’ networks: intensity and complexity of networks; power relations; and horizons of awareness. We realised that vertical networks are kept under dependency relations. Moreover, entrepreneurs are cutting down on the number of links as a compromise with the larger corporations with which they want to trade. The most prominent

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examples show that inter-ethnic networks do not give ethnic entrepreneurs instantaneous advantage unless they learn to operate outside their business culture, and unless they develop some business autonomy that may enable them to improve their bargaining position in the market. In addition, Arab entrepreneurs are rarely members of business organisations and hardly make use of support programs offered by government agencies. They do not have faith in their ability to adapt to government program prerequisites. Moreover, their experience shows a clear absence of links with the national economic and political e´lite, as well as with Jewish competitors. Competition with large corporations has been identified as the hardest obstacle for embeddedness in the inter-ethnic milieu. Entrepreneurs are willing to take risks and to expand into new markets, but they find it difficult to obtain high profit and growth multipliers. The following example of a bakery from the township of Daburya shows a form of compromise achieved between this bakery and a larger, Jewish owned bakery. In an attempt to grow I started to convince Jewish food stores in the region to buy from me the Arab bread (pitta). I promised store owners to bring them fresh pittas twice a day and I sold them a little bit cheaper. For a while my business grew rapidly and it was a great success. I even started to plan the expansion of the bakery in an industrial zone, but than the problems started. The bread bakery, which has a monopoly standing on standard bread, put pressure on the stores not to buy the pitta from me. It was hard to compete with Oranim (owned by a kibbutz near Nazareth) because the bakery forced its customers to buy its pitta if they wanted to buy its bread. Since our pitta is better, we had to buy bread in Haifa and supply our customers with both pitta and bread in order to fight Oranim’s monopoly. Then Oranim proposed an agreement: they would supply the bread and we would supply the pitta. There’s still competition and some hitting below the belt. Oranim gets tax exemptions and subsidies, so they can give the buyers discounts. Here we don’t get subsidies; it’s not a development area. I managed to compete because of my personal approach to the customers and because my product is better than the others. I supply on time, in the amount required, and on credit. However, I was forced to compromise with them and to distribute the pitta through them, sharing with them part of my profit.

This bakery succeeded in overcoming barriers of ethnicity and peripherality, and managed to use the proper tactic and find the appropriate conditions for an acceptable mixed-embeddedness. This compromise may present a more even form of embeddedness. However, the entrepreneur had to come to terms with conditions of lower profitability, which may mean a failure to escape marginality. Our last remark is related to policies. It could be said that Arab entrepreneurs may somewhat improve their awareness of opportunities in the Jewish markets by adapting to Jewish business culture, but they have little chance to improve their power relations with national corporations without public support. Since the restructuring of an intra-ethnic informal business culture is a response to powerlessness in inter-ethnic networks, it seems that Arab entrepreneurs are caught in a vicious circle of marginalisation. Managers of Jewish corporations who tried to initiate partnerships with Arab entrepreneurs insisted that they have failed because of their inability to get used to informal forms of management. It is therefore obvious that there is an

urgent need to initiate special programs for the integration of Arab enterprises into the national economy, an integration that may also serve as an appropriate mechanism for socio-political integration. The absence of such programs may halt Arab entrepreneurs from a proper and balanced integration into the wider Israeli economic milieu, and may lead them to a retreat into entrenched overembeddedness within their Arab intra-ethnic milieu. References Abo Sharkia, N. (1998), ‘‘Small businesses and their networks among the Arab minority in Israel’’, Masters thesis, Department of Architecture and Town Planning, Technion, Haifa. Aldrich, H.E. and Waldinger, R. (1990), ‘‘Ethnicity and entrepreneurship’’, Annual Review of Sociology, Vol. 16, pp. 111-35. Atrash, A. (1992), ‘‘The Arab industry in Israel: branch structure, employment and plant formation’’, Economics Quarterly (Hebrew), Vol. 152, pp. 112-20. Barnes, T.J. and Gertler, M.S. (Eds) (1999), The New Industrial Geography: Regions, Regulation and Institutions, Routledge, London. Barrett, G.A., Jones, T.V. and McEvoy, D. (1996), ‘‘Ethnic minority business: theoretical discourse in Britain and North America’’, Urban Studies, Vol. 33 Nos 4-5, pp. 783-809. Bennett, R.J. (1998), ‘‘Business associations and their potential contribution to SMEs’ competitiveness’’, Entrepreneurship and Regional Development, Vol. 10, pp. 243-60. Best, M. (1990), The New Competition: Institutions of Industrial Restructuring, Harvard University Press, Cambridge, MA. Burt, R.S. (1992), Structural Holes: The Social Structure of Competition, Harvard University Press, Cambridge, MA. Central Bureau of Statistics (1992), Statistical Abstracts of Israel, Jerusalem. Curran, J. and Blackburn, R. (1994), Small Firms and Local Economic Networks, Paul Chapman, London. Falah, G. (1993), ‘‘Trends in the urbanization of Arab settlements in Galilee’’, Urban Geography, Vol. 14 No. 2, pp. 145-64. Grabher, G. (1993), ‘‘Rediscovering the social in the economics of interfirm relations’’, in Grabher, G. (Ed.), The Embedded Firm, Routledge, London, pp. 1-31. Grabher, G. and Stark, D. (1997), ‘‘Organizing diversity: evolutionary theory, network analysis and postsocialism’’, Regional Studies, Vol. 31, pp. 533-44. Hakansson, H. and Johanson, J. (1993), ‘‘The network as a governance structure: interfirm cooperation beyond markets and hierarchies’’, in Grabher, G. (Ed.), The Embedded Firm, Routledge, London, pp. 35-51. Haidar, A. (1993), Obstacles to Economic Development in the Arab Sector in Israel, in Hebrew, The Israeli Arab Centre for Economic Development, Tel-Aviv. Hardill, I., Fletcher, D. and Montagne-Villette, S. (1995), ‘‘Small firms’ distinctive capabilities and the socioeconomic milieu: findings from case studies in Le Choletais (France) and the East Midland (UK)’’, Entrepreneurship and Regional Development, Vol. 7, pp. 167-86. Harrison, B. (1992), ‘‘Industrial districts: old wine in a new bottle?’’, Regional Studies, Vol. 26, pp. 469-83. Kay, J. (1993), Foundations of Corporate Success, Oxford University Press, Oxford. Khamaisi, R. (1984), ‘‘Arab industry in Israel’’, unpublished Magister thesis, in Hebrew, Technion, Haifa.

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Kloosterman, R., Van Der Leun, J. and Rath, J. (1999, ‘‘Mixed embeddedness: informal economic activities and immigrant businesses in The Netherlands’’, International Journal of Urban and Regional Research, Vol. 23 No. 2, pp. 252-66. Lakshmanan, T.R. and Okumura, M. (1995), ‘‘The nature and evolution of knowledge networks in Japanese manufacturing’’, Papers in Regional Science, Vol. 74, pp. 63-86. Malecki, E.J. and Tootle, D.M. (1996), ‘‘The role of networks in small firms’ competitiveness’’, International Journal of Technology Management, Vol. 11, pp. 43-57. Maskell, P. and Malmberg, A. (1999), ‘‘Localised learning and industrial competitiveness’’, Cambridge Journal of Economics, Vol. 23, pp. 167-85. Oinas, P. (1999), ‘‘Voices and silences: the problem of access to embeddedness’’, Geoforum, Vol. 30, pp. 351-61. Perry, M. (1999), Small Firms and Network Economies, Routledge, London. Perry, M. and Goldfinch, S. (1996), ‘‘Business networks outside an industrial district’’, Tijdschrift voor Economische en Sociale Geografie, Vol. 87, pp. 222-36. Portes, A. and Sensenbrenner, J. (1993), ‘‘Embeddedness and immigration: notes on the social determinants of economic action’’, American Journal of Sociology, Vol. 98 No. 6, pp. 1320-50. Schnell, I., Benenson, I. and Sofer, M. (1999), ‘‘The spatial pattern of Arab industrial markets in Israel’’, Annals of the Association of American Geographers, Vol. 89 No. 2, pp. 311-36. Schnell, I., Sofer, M. and Drori, I. (1995), Arab Industrialization in Israel, Praeger, Westport, CT. Sofer, M. and Schnell, I. (2000), ‘‘The restructuring stages of Israeli Arab industrial entrepreneurship’’, Environment and Planning A, Vol. 32, pp. 2231-50. Sofer, M., Schnell, I. and Drori, I. (1996), ‘‘Industrial zones and Arab industrialization in Israel’’, Human Organization, Vol. 55 No. 4, pp. 465-74. Talmud, I. and Mesh, G.S. (1997), ‘‘Market organization and corporate instability: the ecology of inter-industrial networks’’, Social Science Research, Vol. 26, pp. 419-41. Talmud, I. and Yanovitzki, I. (1998), ‘‘The contradictory demand paradox: social embeddedness and organizational performances’’, Israeli Sociology (Hebrew), Vol. 1 No. 1, pp. 55-90. Taylor, M. (1995), ‘‘The business enterprise, power and patterns of geographical industrialization’’, in Conti, S., Malecki, E.J. and Oinas, P. (Eds), The Industrial Organisation and its Environment: Spatial Perspectives, Avebury, Aldershot, pp. 99-122. Todtling, F. 1994), ‘‘The uneven landscape of innovation poles: local embeddedness and global networks’’, in Amin, A. and Thrift, N. (Eds), Globalization, Institutions, and Regional Development in Europe, Oxford University Press, Oxford, pp. 68-90. Uzzi, B. 1996), ‘‘The sources and consequences of embeddedness for the economic performance of organizations: the network effect’’, American Sociological Review, Vol. 61, pp. 674-98. Waldinger, R. (1995), ‘‘The other-side of embeddedness: a case-study of the interplay of economy and ethnicity’’, Ethnic and Racial Studies, Vol. 18 No. 3, pp. 555-80. Yeung, H.W.C. (2000), ‘‘Organizing ‘the firm’ in industrial geography 1: networks, institutions and regional development’’, Progress in Human Geography, Vol. 24 No. 2, pp. 301-15.

How innovative are Dutch immigrant entrepreneurs?

Dutch immigrant entrepreneurs

Constructing a framework of assessment Ewald Engelen

69

Department of Philosophy, Faculty of Humanities, University of Amsterdam, The Netherlands Keywords Innovation, Immigrants, Entrepreneurialism, Start-ups, The Netherlands Abstract Asks how innovative Dutch immigrant entrepreneurs are. Since the mid-1980s the number of immigrant firms has more than tripled. This coincides with a huge increase in the number of start-ups in the Dutch economy as a whole. However, international comparisons show that this increase has not resulted in an equal rise in the number of fast growing firms that add value and create employment – the so-called gazelles – and are hence the preferred ideal of policy makers. This raises the question of how innovative the Dutch economy might be. To address this issue, constructs a framework of assessment, derived from the divergent capitalisms approach of Richard Whitley and associates, as this approach offers a useful conceptual instrument to do so. Concludes that, despite appearances, the Dutch institutional setting is not very conducive for value creating innovations, but instead seduces firms, especially small and medium enterprises, to follow reactive strategies. Offers some general remarks on how the conditions for innovation can be improved.

Introduction ‘‘Creativity is the sine qua non for economic success, and becoming an entrepreneur is the creative act par excellence’’, thus read the slogan of a congress for aspiring entrepreneurs, that was held recently in the Amsterdam Rai Conference centre, aiming to help them overcome the administrative, mental, financial and institutional thresholds to economic success. As its title ‘‘Breaking out’’ suggests, its primary target group was the diverse and diffuse category of starters who have, as yet, failed to turn themselves into those innovative, fast-growing firms called gazelles that add value and create work – and are the much-heralded heroes of the Organisation for Economic Co-operation and Development (OECD) Jobs Strategy (OECD, 1998). This is increasingly seen as the main weakness of the Dutch economy, as the relative lack of new start-ups – which characterised not only the Dutch economy but all advanced economies, even the North American (Piore and Sabel, 1984; Sabel and Zeitlin, 1985; Bechhofer and Elliott, 1985; Steinmetz and Wright, 1989) – has now been solved. Starting from a low of 30,000 start-ups in the late 1980s, the number has doubled to well over 60,000 in the late 1990s (OECD, 1998, pp. 170-1). However, this has not resulted in a comparable rise in the number of gazelles. A recent benchmark study of the European employers’ Thanks are due to Robert Kloosterman for constructive comments. This article is part of a special issue of papers entitled ‘‘The economic context, embeddedness and immigrant entrepreneurs’’ edited by Jan Rath, Robert Kloosterman and Eran Razin.

International Journal of Entrepreneurial Behaviour & Research, Vol. 8 No. 1/2, 2002, pp. 69-92. # MCB UP Limited, 1355-2554 DOI 10.1108/13552550210423732

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Table I. Immigrant entrepreneurs (percentage)

federation, UNICE, shows that the number of fast-growing firms among medium-sized enterprises (i.e. firms with less than 100 employees) in The Netherlands is only 6 per cent, whereas in the USA it is 25 per cent. A comparable small and open economy like the Danish one has more than twice as many gazelles. Moreover, on the list of Europe’s fastest growing firms are only 11 Dutch, against 16 Danish and 16 Swedish firms (EZ, 1999, p. 47). The same pattern can be traced in the composition of immigrant firms. Here too, a rapid increase in the number of start-ups from the early 1990s onward is visible, especially among Turkish immigrants (see Table I). Despite a declining failure rate – from 28 per cent in 1993 to 17 per cent in 2000 – and a hesitant but unmistakable tendency toward diversification, especially in personal and producer services (see Kloosterman, 2001; Van der Leun and Rusinovic, 2001; Van den Tillaart and Poutsma, 1998, 2001), immigrant entrepreneurs are still overrepresented in the cleaning, retail and restaurant trades, as they tend to copy the entrepreneurial strategies of their compatriots. Consequently, immigrant entrepreneurs are overwhelmingly active in markets that have a low or limited growth potential and are easily accessible for newcomers (Kloosterman and Rath, 2000), implying that their existence as entrepreneurs is relatively precarious due to crowding effects. This is reflected in a failure rate that is still significantly higher than among nonimmigrant entrepreneurs – 17 to 14 per cent, respectively – low profitability, long working days and weeks, and a high degree of informality, ranging from the relatively innocent (e.g. dodging taxes, social premiums and workplace regulations, for example), to down-and-out illegal activities (e.g. hiring illegal workers, selling illegal goods). Hence, it is uncertain whether the quantitative success of self-employment as an avenue of economic incorporation can withstand the more adverse economic climate that appears to be on the horizon. In other words, is the rise of immigrant firms conjunctural or structural? Is it temporary or is it here to stay? In this paper, I will address that question by first focusing on different conceptions of innovation, and second by analysing the relationship between different patterns of innovation and their institutional contexts. The aim is to construct a framework of assessment. Finally, I end on a more practical tone, asking how this relates to the Dutch case. How should one characterise and assess the Dutch innovation system? Is there a tendency in Dutch policies to

Turks Moroccans Surinamese Antillians Dutch

1986/1987

1992

1997

4.4 3.3 2 2.9 8

7.8 5 4.5 4.6 8.9

12.2 5.9 5.4 6.3 10.1

Source: Van den Tillaart and Poutsma (1998, p. 40)

steer migrants into low value-added activities, as the figures seem to suggest? Dutch immigrant Is this a bad or a good thing and, if the former, what can be done about it? entrepreneurs Innovation In the classic second chapter of his Theory of Economic Development (1934), headed: ‘‘Entrepreneurship and innovation’’, Schumpeter distinguished between different innovative strategies. Entrepreneurs can either introduce ‘‘a new good’’ or ‘‘a new method of production’’, they can open up ‘‘a new market’’, they can exploit a ‘‘new source of supply of raw materials’’ or they can reorganise industry ‘‘like the creation of a monopoly position or the breakingup of a monopoly position’’ (Schumpeter, 1934). According to the early Schumpeter, innovation boils down to ‘‘new combinations [of] materials and forces’’ and is equivalent to economic development. It is the maverick entrepreneur who functions as the carrier of the process of ‘‘creative destruction’’, setting new standards of efficiency and market success, forcing competitors to ‘‘stand or deliver’’. In his later work, especially Capitalism, Socialism, and Democracy (1942), Schumpeter bemoans the disappearance of the classic entrepreneur and sketches the first outlines of a managerial capitalism. This replaces entrepreneurial capitalism, where innovation has become the exclusive prerogative of a quasi-autonomous research and development department, populated by highly specialised scientists and modelled on the academic research laboratory (Schumpeter, 1942; Swedberg, 1991). Recently this linear conception of innovation has come under increasing attack for being too cognitivistic, too hierarchical, too deterministic and too technocratic, conceptualising innovation as an upstream specialty, slowly drifting downstream, where production has to adapt according to plan. First, it exaggerates the economic importance of fundamental research. Second, it is based on an untenable and obsolete hierarchy of cognitive sources; pure scientific knowledge or episte`me prevails over the practical and tacit knowledge or techne´ of the user (Polanyi, 1969; Marglin, 1990, pp. 231-7; Scott, 1998, pp. 309-41). Third, it defines innovation too much in purely technological terms, neglecting innovations in handling, packaging, factoring, distribution, marketing and logistics, which generally can do without expensive technological components and are hard to patent anyway. Fourth, it disregards the importance of continuous interaction and feedback between laboratory and users for incremental innovations, as is increasingly recognised by technological front-runners, which have effectively ‘‘turned their factories into laboratories’’ (Cooke and Morgan, 1998, pp. 41ff; Kline and Rosenberg, 1986; Aoki and Rosenberg, 1987). Instead, it is increasingly recognised that innovation is a learning process that is both developmental or cumulative, organisational or collective, and strategic or uncertain (Lazonick, 2000; Lazonick and O’Sullivan, 2000a, b; O’Sullivan, 2000a, b). In such an interactive or integral conception of innovation, the ability to break through narrow task definitions and rigid organisation

71

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boundaries to anticipate external changes is key. Central is the degree to which the design of the production process allows for co-operation and the exchange of information between workers, between work stations, between departments, between the firm and its suppliers, between the firm and its customers, and finally between competing firms (Roobeek, 1988, pp. 36-61; Freeman, 1994, p. 480; Dhondt and Vaas, 1996; Cooke and Morgan, 1998, pp. 41-7). Hence, innovation is taken to be more a matter of diversity, interaction, and experimentalism than of scale and concentration, and is thus more a question of having the right organisation than having enough finance or brainpower (Cooke and Morgan, 1998; Piore and Sabel, 1984; Sabel and Zeitlin, 1985; Weiss, 1988). Institutional conditions Although there is a growing awareness among students of innovation of its nationally-based character, culminating in the key concept of national innovation systems (Lundvall, 1992; Nelson, 1993; Edquist, 1997), the emphasis on research and development spending, and the number of patents and hence, on the national character of the interfaces between industry and academic knowledge production, indicates that this literature still contains traces of the late-Schumpeterian notion of innovation. This notion takes a cognitivistic, hierarchical, deterministic and discursive view of knowledge production and an upstream-downstream view of knowledge transmission. As it has increasingly become clear that innovation is a matter of organisation, and as there are many ways in which economic activities can be organised, this is increasingly seen to be largely determined by the institutional framework, so there has arisen a growing need to investigate the relationship between the institutional setting and the innovative ability of firms. Production regimes and innovative capacities A promising attempt to elucidate the causal links between institutions and innovative capacities is the one by Soskice and Hall (Soskice, 1994, 1999; Soskice and Hall, 2001). With the concept of a production regime, Hall and Soskice refer to the incentives and constraints (rules of the game) embedded in the institutional framework, consisting of a financial system, an industrial relations system, an education and training system and an intercompany system. Using comparative data[1], Hall and Soskice distinguish between two production systems, a co-ordinated market economy (CME) and a liberal market economy (LME). In CMEs there is considerable non-market co-ordination between firms, either by the state or by voluntary associations, with the state playing an important facilitating role in that case. More specifically, in CMEs capital markets are small and inconsequential, while capital is provided by financial institutions which generally have a long-term orientation; labour unions play an important governing role in the system of industrial relations; there is large business involvement in extensive systems of initial vocational training; and

co-operative intercompany relations allow for the easy dispersal of information Dutch immigrant and technology (Soskice, 1999, pp. 106-10). entrepreneurs In LMEs co-ordination between economic agents is mainly of the invisible hand type, with the state in a residual role, merely guaranteeing contracts and property rights. More precisely, in LMEs capital is provided by liquid capital markets, while financial institutions have a more speculative, short-term 73 orientation; labour markets are deregulated with weak, syndicalist unions; standardised, state-backed systems of vocational training are lacking; and intercompany relations are generally adversarial. In short, LMEs, because of the absence of extra-firm co-ordinating capacities, induce firms to integrate juridically – rather than ally voluntarily – to create a more secure and predictable entrepreneurial environment, whereas CMEs contain no such incentive and allow for non-proprietary forms of alliance (Soskice, 1999, pp. 110-13). According to Soskice, LMEs and CMEs lead firms to different innovation strategies. Firms that function in a co-ordinated setting tend to produce relatively complex products, involving complex production processes, for wellestablished markets that allow for extensive and close customer links. The dominance of German and Japanese firms in the markets for production machineries is a case in point. These types of firms tend to be good at incremental innovation. The explanation is that patient capital, co-operative industrial relations and a high level of training force firms to enter quality markets and pursue qualitative flexibilisation strategies[2], not only because price strategies are blocked but also because the extra costs involved can only be recouped on quality markets (Soskice, 1999, p. 113). For LMEs the reverse is true. Here a high incidence of new activities can be observed, especially in services, be they services based on the individual skills of highly trained professionals (advertising, investment banking, corporate law, consultancy, etc.) or services requiring large and complex systems of networks, as is the case in the airline, the entertainment and the software industries; activities in which American firms play a leading role. Here the explanation is impatient, highly mobile capital, allowing for a rapid recombination of productive resources, an unegalitarian education system with high summits and deep troughs, and weak and adversarial labour unions, allowing managers a high degree of unilateral action. Hence, LMEs are particularly good at radical innovations, requiring the ability to relocate and recombine capital and labour swiftly and easily (Soskice, 1999, pp. 117ff). Weaknesses Despite heuristic strengths, there are clear explanatory weaknesses in the production regime approach of Hall and Soskice. First of all, their dichotomous conceptualisation of institutional frameworks does not allow for the large institutional differences between and within countries. Financial institutions, for example, do not neatly fall in either of the two categories of a market-based environment or a bank-based environment, as there are many different bank/

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market mixes and many different ownership structures, ranging from highly dispersed ownership to highly concentrated ownership (Scott, 1997). At the same time, banking institutions within countries appear to be much more diverse than is presupposed in these two world models. The organised capitalism thesis, according to which the big commercial banks exercise co-ordinating powers over large German firms, disregards the importance of self-financing and ignores the importance of saving banks and co-operative banks for the famous German Mittelstand (Herrigel, 1996; Deeg, 1999, Ch. 3). Moreover, the tendency towards hybridisation over time, in effect creating new types of institutions, cannot be grasped with dichotomous approaches like that of Hall and Soskice (Whitley, 1999; Lane, 2000; Beyer and Hassell, 2001). This is true for all models, of course, as they all represent a specific balance between theoretical abstraction on the one hand and empirical adequacy on the other, to reduce complexity as much as needed but no further; the well-known tale of the ‘‘model versus the muddle’’ (Bader and Engelen, 2001). However, in this case it is particularly damning, as the stated objective is to identify different innovative trajectories and their institutional linkages. In view of this aim, it appears to be rather arbitrary to restrict the search for diversity offhand to given national economies – skipping regional diversity – and to limit their number a priori to two-skipping national diversity. A less restrictive alternative would have been to use a continuum along which different empirical referents could have been arranged. However, such a continuum is based on salient individual properties whereas ‘‘models’’ represent different mixes of theoretically relevant properties or idealised ‘‘syndromes’’. Properties come in degrees or levels and allow for variability, whereas models do not. The degree to which an empirical referent conforms to a model is in itself not very informative if the ‘‘syndrome’’ that the model in question is presumed to represent is sufficiently complex, as is the case here. Of course, Hall and Soskice could have taken the degree of factor mobility as the main explanatory variable, as they implicitly seem to have done anyway, but that would have loaded the dice against CMEs (in the sense that factor mobility is good and rigidity bad) and would have burdened them with the difficult task of determining whether factor mobility is indeed the decisive variable and, if it is, which factor is the most important: capital, labour, knowledge, relations (vitamin ‘‘R’’) or some other production factor? As it stands, the somewhat loose description of the two production regimes, addressing, as we will see, only one dimension of the complex way in which real institutions are linked to actual innovation trajectories, does not allow for a more clear-cut, empirically testable linkage of specific innovation strategies to specific institutional clusters. To do so, more detailed descriptions of institutions, innovation strategies and their causal linkages are needed. Business systems More promising in this regard is the attempt by Whitley and collaborators to describe and explain how institutions determine firm behaviour (Whitley, 1992,

1999; Whitley and Kristensen, 1996, 1997). The causal links are as follows, Dutch immigrant according to Whitley. The way firms behave is an effect of their organisational entrepreneurs capabilities together with their strategic priorities or dominant market orientations. These in turn are largely determined by their governance structures, which depend on the ruling system of economic co-ordination and control and their institutional contexts (see Figure 1). 75 The key concept in Whitley’s framework is that of the business system, whose orientations and observable market behaviour are determined by the firms relationships with: providers and users of capital; customers and suppliers; competitors; firms in different sectors; employers and different kinds of employees (Whitley, 1999, p. 33). Whitley (1999, p. 33) defines business systems as: Distinctive patterns of economic organisation that vary in their degree and mode of authoritative coordination of economic activities, and in the organization of, and interconnections between, owners, managers, experts, and other employees.

As the institutional context is unpacked in financial systems (form of ownership co-ordination, level of managerial control), training and education systems (the mode of skill development, degree of task fragmentation and specialisation, degree of worker discretion), labour relations and employment relations (degree of employer-employee interdependence, degree of managerial delegation), and the organisation of civil society (extent of private interest mediation, scope of represented interests, degree of mobilisation, mode of competition), Whitley is able to transcend the stereotypical universe of the two worlds model. There is an allowance for both functional and geographical divergence within countries as for divergences between countries, as well as for changes over time. Using well-tested, middle-range generalisations of meso and micro-level causal linkages between specific institutional clusters and firm behaviour, Whitley has constructed a six-fold typology of business systems which tend to predominate in specific national institutional contexts but can, in principle, also be found in others, albeit in modified form.

Figure 1. Causal linkages between institutions and innovation strategies

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Business systems can be either fragmented, can take the form of co-ordinated industrial districts, can be compartmentalised, state-organised, collaborative or highly co-ordinated (Whitley, 1999, pp. 59-64) (see Table II). Which business system will predominate where depends on the institutional features of its environment. If the state is strong, interventionist or even dirigiste, either state-organised or highly co-ordinated business systems will dominate, depending on the strength of the unions in question and the extent of neo-corporatist intermediation, inducing firms to follow growth rather than profit strategies. However, if ownership is widely dispersed and management control constrained by capital markets, as is the case in the USA, the firm will be profit oriented. More precisely, the predominant performance measure in that case is portfolio investor returns, rather than, say, family wealth accumulation, asset growth, market share or technical excellence (Whitley, 1999, pp. 70-2). Moreover, such an orientation tends to be combined with a high level of juridical integration between competitors (horizontal) and within product chains with suppliers and customers (vertical) as a means of external co-ordination – the famous ‘‘islands of order’’ and discipline in an ‘‘ocean of chaos and anarchy’’ (Lipietz, 1986). Internal co-ordination, however, is brought about by hierarchical command and control systems, resulting in a low level of employer-employee interdependence and a low degree of managerial delegation. Thus, the adversarial market environment of the USA results in compartmentalised business systems, consisting of isolated hierarchies and overwhelmingly Taylorist work systems, punctuated by co-ordinated industrial districts such as Silicon Valley, Route 128 and other skill-based environments (Saxenian, 1995; Kenney, 2000, 2001), and interspersed with highly co-ordinated business systems in state-guided sectors like the dairy industry or the defence industry (Young, 1991; Campbell et al., 1991). The much more collaborative environment of the German economy, on the other hand, results in collaborative business systems which are characterised by functional alliances rather than juridical integration, both horizontally and vertically. However, as there are two industrial orders in Germany, an autarchic industrial order dominated by large, publicly quoted corporations on the one hand, and a decentralised one, dominated by small and medium-sized firms on the other (Herrigel, 1996; Deeg, 1999), we clearly must distinguish between large and small and medium-sized firms. In Germany, the typical large firm is a co-operative hierarchy with an intermediate level of managerial autonomy, constrained by credit controllers (banks) as well as employee interests (works councils, co-determination via the supervisory board), inducing a growth orientation in which market share and technical excellence are the main performance indicators. Moreover, the large German firm is characterised by a high degree of interdependence between employer and employee as well as a high degree of managerial delegation, hence Whitley’s label of negotiated delegated responsibility for the dominant work system in large German firms.

Institutional features

Fragmented

Types of business system Coordinated State industrial district Compartmentalised organised

The state Strength Incorporation of intermediaries Degree of market regulation

Low Low Low

Local Local Local

Collaborative

Highly co-ordinated

Low Low Low

High Low High

Considerable High High

High High High

Limited bank Local bank financing financing

Capital market

Credit

Credit

Credit

Skill development Strength of public training system Union strength Organising principle of unions Centralisation of bargaining

Weak Weak Varies Low

Strong Strong Skill/sector Low

Weak Weak + Skill Low

Limited Weak Firm Low

Strong Strong Sector High

Limited Limited Firm Low

Trust and authority Trust in institutions Paternalist authority Communitarian authority Contractarian authority Business environment

Low Some Low Limited Particularistic

Some Varies Limited Varies Collaborative

High Low Low High Arm’s length

Limited High Low Low Dirigiste

High Low High Low Collaborative

Some High Some Low State guided

Financial system Capital market or credit based

Source: Whitley (1999, p. 60)

Dutch immigrant entrepreneurs

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Table II. Institutional features and business systems

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Small and medium-sized enterprises – the famous Mittelstand – operate in co-ordinated industrial districts that are populated by firms with a distinct artisanal orientation. These are characterised by a high degree of organisational integration, a high degree of worker involvement and a strong orientation towards growth goals instead of profit goals. Co-ordination between firms is relational, of the non-ownership alliance type, and takes place only within production chains (vertical) or between competitors (horizontal), in contrast to the diagonal ownership relations between unrelated activities that can be found in adversarial market environments where firms act more as portfolio holders. These alliances are underpinned and stabilised by a complex web of public, semi-public and private institutions, ranging from legally mandated work councils, mandatory participation in regional vocational training centres, obligatory membership of chambers of commerce and industry to private interest associations, co-operative and savings banks and voluntary standard setting (Whitley, 1999, pp. 31-116). Innovation patterns Until recently the causal links ran from institutional setting to market orientation only, distinguishing between growth and profit orientations generally and between family wealth accumulation, portfolio investors’ return, market share and technical excellence in particular. In a recent paper, Whitley has extended his framework to cover innovation, linking innovation patterns via market orientation and organisational capabilities to the governance structures of different business systems, and ultimately their institutional contexts (see Figure 1) (Whitley, 2000). Innovation patterns are understood by Whitley (2000) as: Combinations of firms’ preferences and capabilities for generating and diffusing varied innovations.

They are related to: The level of technical uncertainty about the nature of an innovation and about how it could be used by different groups of users; the degree to which product qualities are dedicated and differentiated between user groups; the degree to which innovations are continuous with or disruptive of ‘‘established organisational resources’’; the reliance on formal knowledge; and the degree of complexity, both cognitive and organisational, of the innovation in question (Whitley, 2000, pp. 869-70).

In other words, the mode and level of innovativeness of business systems is determined by uncertainty, complexity, level of specialisation and available knowledge sources, as well as mobility, whereas Hall and Soskice stress mobility, or the capacity to recombine productive resources rapidly, only. These variables make for five ideal types of innovation: dependent; craft-based responsive; generic; complex; and transformative (see Table III). Dependent innovation patterns refer to customer-driven adaptations in existing production processes, using well-known resources such as industry specific skills and mainly simple, tacit knowledge, to serve highly

Characteristics Technical and user uncertainty Dedicated and differentiated product qualities Based on current organisational competences Reliance on formal knowledge Reliance on complex and varied knowledge base

Craft based Complex, Dependent responsive Generic risky Transformative –

+

++

+++

++++

+++

+++

–

+++

+/–

– –

+++ ++

++ +++

+++ +++

– ++++

–

+

++

+++

++++

Source: Whitley (2000, p. 872)

differentiated niche markets. As a result the technical and market uncertainties involved are limited, restricting the need for complex forms of inside and outside co-ordination. Craft-based, responsive innovation patterns are higher impact innovations of a continuous character, implying high customer involvement, differentiated markets, a quality orientation, skill-based innovation and hence a higher degree of technical and organisational uncertainty. Generic innovation patterns aim at the development of standardised massmarket products using formal codified knowledge that is embodied in routinised production processes, specialised machinery, and simple tasks. Because of high sunk costs in the form of capital investments in dedicated machinery and hierarchical organisations, the reduction of technical and market uncertainty takes place via the well proved road of input and output standardisation. Complex, risky innovation patterns refer to the development of new products that have a high market restructuring potential. Hence technical and market uncertainty is high, implying a high level of cognitive complexity, i.e. mixes of tacit and formal knowledge, and of organisational complexity to ensure adequate co-ordination between different agents, inside as well as outside the firm. However, innovations of this type build on ‘‘current organisational competences’’ and are thus ‘‘competence enhancing rather than competence destroying’’ (Whitley, 2000, p. 873). Transformative innovation patterns do imply radical ruptures with the existing structure of markets, networks of distribution, modalities of marketing as well as systems of production. As a result, they do destroy existing competences, implying high technical and market uncertainties, forcing innovators to use many different cognitive sources and to create a diverse organisational setting for the integration and implementation of these different cognitive sources. Combining Tables II and III gives the following results. Dependent innovation tends to be the preferred strategy of small, opportunistic and ownercontrolled firms that are embedded in fragmented business systems, which

Dutch immigrant entrepreneurs

79 Table III. Characteristics of different type of innovation strategies

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operate in particularistic environments that are characterised by a low level of institutional trust, a weak state with limited regulatory capacities and an underdeveloped civil society. The highly flexible, family-based Hong Kong firm, found throughout Southeast-Asia and increasingly Canada (Froschauer, 1997, 2001), is the main example. Craft-based, responsive innovation patterns, on the other hand, are mainly followed by artisan firms, operating in co-ordinated industrial districts which are based on local collaborative networks, providing firms with the co-ordinating abilities that allow them to cater to the needs of sophisticated customers, setting in motion a process of incremental mutual discovery of new products, processes and uses. Here, the third Italy districts serve as an illustration. Third, generic innovation is to be found primarily in the large, mass-market oriented firms – or isolated hierarchies – that are the products of either arm’s length or dirigiste environments. As these firms generally lack the collaborative milieu that would allow them to reduce uncertainty, spread risks and organise cognitive complexity adequately, they are forced to internalise risks. In these environments the preferred way of doing this is via standardisation and Taylorisation. As a result, economies of scale dominate over economies of scope, and price competition dominates over quality competition. Hence, only those innovations tend to be implemented which fit this mould. This type of innovation is characteristic of the large American corporation as well as the Korean chaebol. Complex, risky innovation patterns predominate in economic environments that allow both for multifarious collaboration, inside as well as outside firms, and for large-scale organisations that are able to combine standardisation of (parts of) the production process with a highly skilled workforce. Although these types of innovation share important characteristics with craft-based innovations – both are incremental, collaborative and reciprocal – because of their much larger scale the technical and market uncertainties involved are also much larger, necessitating firms to spread risks across a larger number of – but especially more resourceful – collaborators. Hence, the span of collaboration is much wider than the locally-based industrial district and is conditional on a much higher level of market regulation, both by federal and state level governments and public, semi-public and private agencies. As different mixes of these regulatory agents can be functionally equivalent, firms in both collaborative and highly co-ordinated business systems, operating in both collaborative and state-guided economic environments, tend to be predisposed towards complex innovations, albeit that collaborative business systems, because of the strength of their public training systems and their industrybased unions, disallow unilateral managerial action. Examples are the German regional economies – Bavaria and Baden-Wu¨rttemberg spring to mind – and the Japanese keiretsu. Transformative innovation patterns, finally, represent radical ruptures with established ways of producing, distributing and marketing goods and services

– often in a highly interrelated fashion – demanding the use and Dutch immigrant implementation of new inputs as well as outputs. In effect, the transformative entrepreneurs firm is actually building a new industry or even industries and new markets, implying the usage of many different cognitive sources, often transcending established sectoral boundaries. The degree of uncertainty and the cognitive and organisational complexity involved are so great that direct or indirect state 81 support appears critical. Critical too is the ability to transcend organisational boundaries and overcome the resistance of those groups that loose out. This is easier done in arm’s length environments and compartmentalised business systems that allow both for a rapid relocation of societal resources via large, liquid capital markets and, in the absence of strong countervailing powers (read: unions), for managerial unilateralism. The availability of state support depends on state priorities, as general neoliberal states tend to follow a policy of non-interference in economic activities. In the USA, the prime example of such an environment, the exception has been defence-related activities, to which both massive fundamental research spending and state procurement policies have been geared. Where state support is lacking, however, generic innovations prevail because of the standardised, mass-market oriented nature of compartmentalised business systems and their environment. Dutch institutional conditions Do we now possess an adequate framework to describe and assess the Dutch institutional setting? At first sight, the Dutch institutions appear to be of the collaborative kind, giving rise to collaborative business systems and co-ordinated hierarchies. The Dutch state has considerable co-ordinating and developing powers, Dutch markets are well-regulated and societal corporalabour unions, employer organisations, serve as effective co-producers of governance in most policy fields (Visser and Hemerijck, 1997). As in Germany, unions are organised sectorally, as is the system of collective bargaining, while interest representation within the firm too is legally formalised in codetermination and Works Council Acts, ensuring a high degree of employeremployee interdependence and a high level of managerial delegation, thus limiting managerial unilateralism (Visser, 1992, 1995; Visser and Ebbinghaus, 1996; Engelen, 2000). Moreover, the Dutch educational system – again like the German system – contains a theoretical trajectory as well as a practical one, both of which are publicly funded and deliver portable qualifications that are recognised throughout the economy (Lieshout, 1996; CPB, 1997, pp. 319-29). Finally, institutional and communal or social trust appear to be high[3]. Paternalist and contractual authority relations are declining (albeit to a somewhat lesser degree than in Germany), as is evident from the stronger role of employees in German firms and from paternalist residues in the Dutch Works Council Act (Engelen, 2001a). This is argued by Van Iterson, the Dutch member of Whitley’s international team of collaborators. In a number of articles (Van Iterson, 1997a, b, c, 2001; Van Iterson and Olie, 1992), Van Iterson has elaborated the claim that the

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Dutch business system is characterised by a high degree of managerial autonomy from owners, a relatively high level of employer-employee interdependence, a negotiated work system and a consensus oriented management style. According to Van Iterson, these traits are induced by a set of national governance principles which have a long historical pedigree, in fact reaching back to the middle ages when the physical-geographical conditions of The Netherlands forced their inhabitants to organise collective bodies for drainage and land reclamation, the so-called waterschappen en heemraadschappen (Van Iterson, 1997a, pp. 53ff). Van Iterson summarizes these principles as a ‘‘strong preference for compromise and consensus among peers’’ (1997a, p. 49). It might be argued that Van Iterson overplays the continuity of Dutch institutional history and hence the durability of Dutch institutions. Contemporary Dutch historiography stresses the rather radical institutional rupture that occurred in the aftermath of the so-called ‘‘patriotic revolution’’ of 1781-1787 and the ensuing French occupation (Prak, 1999; De Haan, 2001). The institutional pluralism of the Dutch republic was replaced by the institutional monism of the constitutional monarchy that was installed in 1813. The authoritative Dutch economic historian Van Zanden, for example, states that the lingering remains of the decentralised corporatist institutions of the Dutch Republic have long halted economic modernisation (Van Zanden and Van Riel, 2000). The core of his argument is that institutional renewal preceded economic modernisation, by allowing markets to integrate and firms to reap economies of scale[4]. In this regard, it is telling that Van Iterson fails to note the wider significance of the abolishment of the Dutch guilds during the French occupation vis-a`-vis their survival and key role in present-day Germany, resulting in a much more centralised, neo-corporatist governance regime than can be found in Germany[5]. Although many German La¨nder are larger than The Netherlands in toto, the German federal state allows local governments a much larger degree of discretionary powers than are available to Dutch local governments. As a result, in The Netherlands societal corpora have replicated the centralised organisation structure of the state, focusing their financial, economic, political and intellectual resources on the centre of government and the macro-economic issues that are decided there. A second observation has to do with the ensuing pluralism of the Dutch economy. Whereas the German economy can be adequately analysed as consisting of two ‘‘industrial orders’’ (Herrigel, 1996), such an analysis is much harder to conduct for The Netherlands. For instance, compared to Germany the capital market has played a much more prominent role in the Dutch economy. This is indicated by the relatively large number of Dutch based multinationals, both in manufacturing (process industries) and in services (Shell, Unilever, Philips, Heineken, DSM, Akzo, ABN Amro, ING, Aegon to name but a few), implying a hybridisation of compartmentalised and collaborative business systems, at least in the large firm sector of the Dutch economy.

A second qualification has to do with the societal embeddedness of small Dutch immigrant and medium-sized firms. Even though several industrial clusters in The entrepreneurs Netherlands have been identified, it appears that they generally lack the kind of collaborative networks that are available to German firms of equal size, hindering the development of the cognitive and organisational complexity that is needed for complex, risky innovations. Moreover, as the experience of Baden83 Wu¨rttemberg shows, complex innovation patterns require some scale or, to put it another way, a complex mix of firm sizes (Cooke and Morgan, 1998, pp. 83113; Semlinger, 1995). Large Dutch firms show increasing signs of hybridisation. This is partly induced by the growing influence of international capital markets and partly by the attempt of the central government to empower the shareholder in the Dutch system of corporate governance, the already high degree of compartmentalisation of the Dutch economy is only strengthened, resulting in a further bifurcation of the economy. In short, Van Iterson fails to take into account the differences between the Dutch and German neo-corporatist governance structure and their differential effects on the economic landscape. This makes the nature of the Dutch economy more challenging to analyse than the German one, and severely reduces the innovative abilities of small and middle-sized enterprises in The Netherlands. The entrepreneurial society The pluralism of the Dutch economy is also reflected in its policy toward business start-ups. As is well known from international comparisons, there appears to be a trade-off between collaborativeness and openness, especially when these collaborative relations are legally formalised, as they are in Germany (Reynolds et al., 2000). This insight lay at the root of a concerted attempt by the Dutch Ministry of Economic Affairs from the early 1990s onward to make the Dutch economy more flexible and more mobile in reaction to high unemployment and low labour participation, aiming to turn the former cartel-paradise into a veritable entrepreneurial society (EZ, 1999). To do so, a two-pronged approach was adopted. First, deregulating the labour market, so allowing for a much larger degree of contractual and functional flexibility (SCP, 1998, pp. 360ff), and second, by lowering the thresholds for a large number of markets, especially in retail, personal services and the restaurant trade. To be more specific, since the early 1990s the Dutch government has provided subsidies, initiated fiscal cuts and set up a number of business parks, some near universities, in an attempt to imitate the success of Silicon Valley and Cambridge. All in all, these measures have been rather limited in scale and scope. The subsidies, for instance, remained well below $350 million (less than 0.5 per cent of total public spending), and the number of business parks amounts to 300, of which only a limited number are publicly funded. More substantial has been the interdepartmental program set up under the supervision of the Dutch Ministry of Economic Affairs, called ‘‘market forces, deregulation and legal upgrading’’, to invigorate the Dutch economy under the

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slogan: ‘‘more markets, less regulation, and better laws’’. It focused in particular on the large number of cartels that gave The Netherlands the name of being a cartel paradise (De Jong, 1990, 1992). To enhance the degree of competition and to lower consumer prices, since 1994 a number of projects have been initiated to create new markets, diminish entry barriers to existing markets, and cut back red tape. These range from deregulating the market for legal advice, leveling the playing field in the cab market and the creation of a new market of child care, to a new bankruptcy law, the harmonisation of the legal categories of selfemployed and entrepreneurs, the outsourcing of public tasks like garbage collection and public transportation, and the extension of retail opening hours[6]. To be more specific, the number of licences which entrepreneurs must possess to start a new firm has been cut radically while the application processes have been shortened and simplified. Moreover, a number of trades have been exempted from official approval completely. Since January 2001 all retailers, wholesalers, barkeepers, innkeepers, restaurant owners, hairdressers, painters, travel agents, manpower agents, etc. can start up without notice. Other types of regulations too have been either cut or simplified. As of 1998 most of the above-mentioned trades are exempted from the duty to get pollution permissions from local governments. The corresponding duties to report on environmental issues too have been either lowered or abolished. The same holds for regulations on occupational safety and working conditions. Here too, costs have been lowered as of 1998, and reporting obligations have been simplified. Exit is also an object of deregulation in The Netherlands, as already mentioned. The unlimited liability of self-employed and general partnerships has been circumscribed since December 1998, and the status of first class debtor, which tax office and social insurers could claim in the case of bankruptcy of limited liability corporations, has been cancelled as of 2000. Moreover, the period of cooling down, meant to provide firms with the opportunity to avert an imminent failure, is in the process of being extended from two to four months, as the number of re-starts is considered too low. With regard to specific target groups, such as women and immigrants, no targeted measures have been undertaken by the central government. No sermons, sticks or carrots (Bemelmans-Videc et al., 1998) have been earmarked for immigrants to stimulate the use of self-employment as an avenue of socioeconomic incorporation (Engelen, 2001b). At the local level, though, a large number of highly diverse programs targeting immigrants have been set up (NCB, 2000). Most of these, however, have not very successful. As their financial basis is small and their status project based, implying limited means and a short-lived existence, most local programs suffer from a lack of clients on the one hand, and a lack of resources to give the few clients they do have any substantial help on the other. Outreach programs cover part of the first issue, but the second remains as of yet unsolved, partly because influential agents such as the Ministry of Economic Affairs, Chambers of Commerce and Trade

and most employer organisation are either of the opinion that entrepreneurs Dutch immigrant cannot be made but are born, or that soft budget constraints in the form of entrepreneurs subsidies and loan guarantees result in market interferences, an inefficient allocation of scarce societal resources and artificially keep soft and weak entrepreneurs afloat. The costs of deregulation Administrative burdens for entrepreneurs have been lowered considerably and the flexibility of the labour market, as well as some other markets, has been increased enormously, in part explaining the high ranking of the Dutch economy in many reports on world competitiveness and the frequent references to Dutch practices in EC and OECD benchmarking reports[7]. However, it is controversial whether the gains in terms of employment as well as start-ups compensate the costs in loss of innovative capabilities. Deregulation and quantitative flexibilisation appear to be bad for innovation, as is indicated by the low and declining position of the Dutch economy on Porter and Stern’s innovation index from the 1980s onwards, the low research and development spending of Dutch firms and the small amount of innovative products in total turnover. Moreover, the Dutch growth of labour productivity has been remarkably low during the 1990s, internationally as well as historically (Kleinknecht, 1998; Kleinknecht and Naastepad, 2001a, b). There is sufficient case evidence to support the view that, after a decade of wage restraint and market regulation, the Dutch industrial base is in a sorry state, using obsolete machinery, Taylorised work systems and cheap labour, and aiming at price competition on standardised markets mainly (Vaas, 2001). However, as is stressed by Whitley’s typology of innovation patterns, innovation is more than a matter of money and/or brains generating technologically fancy hardware, but must also cover innovations in logistics, transportation, marketing, financial services, etc. Hence, what is key in Whitley’s typology is the ability to organise cognitive complexity and to redistribute uncertainty, implying dense collaborative networks of firms, and public and para-public organisations. Despite a high level of corporatist intermediation in The Netherlands, such dense networks are not readily available to small- and medium-sized firms. As the Dutch economy, and hence Dutch economic policy making, is dominated by a small number of internationally-oriented multinationals, the institutional framework has traditionally been geared to their needs and interests, turning large parts of the Dutch economy into compartmentalised business systems. The current emphasis on labour costs, labour market flexibility, fiscal competitiveness, and shareholder value clearly indicate that that is not over yet. Moreover, compared to Germany, the Dutch attempts to help firms to restructure their organisations upwards have been marginal. Programs to enhance the quality of labour, itself an important precondition for innovation, have been short-lived. The Working Conditions and Safety Regulations Act of 1983, although entailing an agenda for the enrichment of tasks, turned rapidly

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into a safety act, focusing on working conditions rather than work content (Engelen, 2001a). Whereas, in Germany, Sweden, Denmark, Norway, Finland, France and even Ireland successful programs are available to stimulate firms to experiment with new production technologies and new organisational forms, no such programs are currently present in The Netherlands. In the mid-1990s, the Dutch Commission on the enhancement of productivity, which was set up shortly after the Second World War to advise the government on issues of economic rationalisation, was actually dissolved, indicating the low priority of labour quality and organisational reform in Dutch policy making. Competition policy too obstructs the development of the interfirm networks that are required to organise cognitive complexity and spread technological and market uncertainty. As is evident from the projects taken up under the marketisation program of the Ministry of Economic Affairs summarised above, the focus is on cartel-like agreements in many-agent markets, implying a low level of economic concentration and thus relatively easy targets[8]. Oligopolistic markets, such as the banking market, the insurance market or the petrol market, have been more or less left alone, illustrating the still enormous political clout Dutch multinationals have over economic policy making. On the other hand, the current interpretation of competition policy in The Netherlands does not allow for the distinction between positive and negative forms of interfirm co-operation that is needed to organise cognitive complexity and to diversify risks. If every form of co-operation between firms is a priori seen as a potential price cartel, competition policies preclude constructive forms of co-operation that allow smaller firms to reap economies of scale on tasks such as factoring, distribution, handling and packaging, etc. This type of competition policy has been an American invention, resulting in the wave of mergers and acquisitions of the late nineteenth and early twentieth century and ultimately in the compartmentalised business systems we know from modern day America (Chandler, 1966, 1979, 1990). Moreover, it has come to dominate European policy making too, via influential benchmarking institutes like the OECD, EC, World Bank and IMF. However, historical research has shown that in nineteenth century USA price cartels predominated only in sectors that were characterised by high capital intensity, high levels of standardisation, and a high export orientation, and consisted of only a handful of firms, whereas the cartels in many-agent markets served cost cutting rather than price lifting goals (Dick, 1997). Analogous to this distinction, Herrigel points out that in Germany large producers resort to price cartels to dampen economic turbulence, whereas small, decentralised producers resort to so-called term-fixing cartels and specialisation cartels to preclude cut-throat competition (Herrigel, 1996). Only the former fall under the Smithian heading of ‘‘conspiracies against the consumer’’. Term-fixing cartels merely aim to set delivery and payment standards among a large group of small specialists, whereas specialisation cartels are meant to carve up producer markets in several niches and to

distribute these niches exclusively among their members, thus enabling them Dutch immigrant to become economically viable in the first place. entrepreneurs To summarise, the conditions for innovation appear to be anything but optimal in The Netherlands, particularly not for small and medium-sized firms since they are prohibited from co-operating in the name of a utopian ideal of market competition and lack the resources to integrate juridically as do large 87 Dutch multinationals, and are pushed towards price competition on standardised markets by a policy mix of wage restraint and labour market deregulation. This is clearly recognised by the Dutch interest organisation of small and medium-sized firms (MKB Nederland), which has recently pressed for a more intelligent competition policy to allow small and medium-sized firms to collaborate. On the other hand, the spur of higher labour costs will not be sought voluntarily, but instead demands a radical break with the current neoliberal policy ideology. As it stands, immigrant firms can be expected to follow dependent innovation patterns at best, as they generally lack extensive and resourceful collaborative networks, do not have access to high-skilled workers and, hence, have to use their ability to react quickly to changing market demands to gain competitive advantage. This ability is especially rewarding in markets where consumer preferences change quickly such as the retail, fashion and restaurant trades, not unexpectedly the trades where most immigrant entrepreneurs are active at present. However, if the Dutch government aims to enhance the number of innovation strategies available to immigrants – for good social and economic reasons – then it will have to help migrants to create the extensive collaborative networks that allow for more cognitive complexity and a less burdensome sharing of risks and uncertainties, even if that would imply a radical break with neoliberal orthodoxy. Notes 1. Derived from Porter (1990). 2. Following Lane and others, I distinguish ‘‘quantitative’’ or ‘‘numerical’’ forms of flexibilisation from ‘‘qualitative’’ or ‘‘functional’’ forms of flexibilisation. ‘‘Qualitative flexibilisation’’ denotes micro- as well as macro-economic strategies that centre on recombining production factors as quickly and as cheaply as possible. This implies a high trust environment in which skills and knowledge are seen as public goods. Innovation is the core aim of this form of flexibilisation. ‘‘Quantitative flexibilisation’’, on the other hand, is primarily a strategy of cost reduction. Its macro-economic pendant follows neoclassical premises in that it tries to decrease factor costs by reducing labour market regulation and by linking national capital markets to global capital flows (Lane, 1988). 3. Meaning the degree to which the rules of the game are considered legitimate and relative strangers are considered to be fair counterparts in negotiations, bargaining of exchanges respectively (Whitley, 1999, pp. 51-4; Barber, 1983). Communal trust is also referred to as social trust. 4. Here, Van Zanden and Van Riel’s story follows the main tenets of ‘‘theories of modernisation’’, according to which there is only ‘‘one best way’’ to modernity, consisting of market integration, task specialisation, dedicated machinery and economies of scale. In this Smithian conception of economic growth – ‘‘the division of

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5.

6. 7.

8.

labour is limited by the extent of market’’, as the Wealth of Nations states – the institutional framework of the ancien re´gime is, by definition, seen as a brake on economic modernisation. As Brenner has famously shown this proposition has liberal as well as Marxist followers (Brenner, 1977). In the case of Van Zanden and Van Riel, the origin is North’s new institutional economics (North, 1990; North and Thomas, 1973), whose theoretical claims underlie their analysis (Van Zanden and Van Riel, 2000, pp. 20-1). However, recent economic historiography has done away with this unilinear perspective on economic development. As Herrigel’s study of the construction of the German industrial orders shows, there are numerous ways to economic modernisation, with or without guilds (Herrigel, 1996) (see also Piore and Sabel (1984) and Weiss (1988) for a more open textured perspective on economic history). Not only can economies of scale be organised in many different ways, ranging form voluntary alliances to proprietary integration, economies of scope appear to be just as important for economic growth, even though the latter pose completely different institutional and organisational demands. After quoting, approvingly, Lewis’ proposition that the predominance of ‘‘bourgeois civility’’ in Dutch culture is due to the fact that Dutch prosperity was based on merchants and guilds, rather than aristocrats and militants, Van Iterson and Olie dedicate a footnote (!) to the observation that ‘‘Dutch guilds [. . .] were already abolished in the early nineteenth century, in contrast to, for example, Germany’’ (Van Iterson and Olie, 1992, p. 115), without addressing the possible effects of this institutional divergence. See for an overview www.ez.nl/mdw However, the latest World Competitiveness Report of the World Economic Forum ranked The Netherlands only eighth, down from third place in 2000. The main reason for this drop given by the forum is the relative lack of investment in capital goods, resulting in a comparative lag in technological innovation. Which, as is evident from the difficulties to liberalise the Amsterdam cab market, proved to be hard enough in some cases.

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van Lieshout, H. (1996), Beroepsonderwijs in Duitsland. Een analyse van het Duitse duale stelsel van beroepsonderwijs vanuit Nederlands perspectief, Max Goote Knowledge Center for Vocational Training and Adult Education, Amsterdam. van Zanden, J.L. and van Riel, A. (2000), Nederland 1780-1914. Staat, instituties en economische ontwikkeling, Uitgeverij Balans, Utrecht. Visser, J. (1992), ‘‘The strength of union movements in advanced capitalist democracies. Social and organizational variations’’, in Regini, M. (Ed.), Future of Labour Movements, Sage, London. Visser, J. (1995), ‘‘The Netherlands. From paternalism to representation’’, in Rogers, J. and Streeck, W. (Eds), Works Councils. Consultation, Representation and Cooperation in Industrial Relations, University of Chicago Press, Chicago, IL, pp. 79-114. Visser, J. and Ebbinghaus, B. (1996), ‘‘Een halve eeuw verandering. Verklaringen voor convergentie en diversiteit van werknemersorganisaties in West-Europa’’, in Visser, J. (Ed.), De vakbeweging op de eeuwgrens. Vijf sociologische studies over de vakbeweging, Amsterdam University Press, Amsterdam, pp. 20-53. Visser, J. and Hemerijck, A. (1997), A Dutch Miracle. Job Growth, Welfare Reform and Corporatism in The Netherlands, Amsterdam University Press, Amsterdam. Weiss, L. (1988), Creating Capitalism. The State and Small Business since 1945, Blackwell, Oxford. Whitley, R. (1999), Divergent Capitalisms, Oxford University Press, Oxford. Whitley, R. (2000), ‘‘The institutional structuring of innovation strategies. Business systems, firm types and patterns of technical change in different market economies’’, Organization Studies, Vol. 21 No. 5, pp. 855-86. Whitley, R. (Ed.) (1992), European Business Systems. Firms and Markets in their National Contexts, Sage, London. Whitley, R. and Kristensen, P.H. (Eds) (1996), The Changing European Firm. Limits to Convergence, Routledge, London/New York, NY. Whitley, R. and Kristensen, P.H. (Eds) (1997), Governance at Work. The Social Regulation of Economic Relations, Oxford University Press, Oxford. Young, B. (1991), ‘‘The dairy industry. From yeomanry to the institutionalization of multilateral governance’’, in Campbell, J.L., Hollingsworth, J.R. and Lindberg, L.N. (Eds), Governance of the American Economy, Cambridge University Press, Cambridge, MA, pp. 236-58.

Economic associations of immigrant self-employment in Canada Daniel Hiebert

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Department of Geography, University of British Columbia, Vancouver, Canada Keywords Canada, Immigrants, Entrepreneursialism, Labour market, Segmentation, Ethnic groups Abstract In the last 30 years or so we have seen a proliferation of research projects on immigrants and non-white minorities in the labour market (labour market segmentation) and as entrepreneurs (ethnic entrepreneurialism). Each of these literatures helps us understand the nature of immigrant and minority participation in the labour market, but each only offers a partial view. In this paper, I bring these topics together in an empirical investigation of the relationship between ethnic labour market segmentation and ethnic entrepreneurialism in Canada, using 1996 census data. I show that there is a close correspondence between the niches where immigrants and minorities find work, and those where they become entrepreneurs. Immigrants who are drawn to niches that offer few opportunities for self-employment have low rates of entrepreneurship and, conversely, those who are over-represented in niches with considerable scope for self-employment are inclined to establish their own businesses. This shows that the propensity for self-employment is, to an important degree, determined in the regular labour market. Therefore, entrepreneurship should not be seen as an intrinsically cultural phenomenon (i.e. that certain groups are ‘‘naturally’’ entrepreneurial), but instead as arising out of the opportunity structure associated with wage and salary labour.

As immigration re-emerged as a popular topic in the social sciences during the 1980s (after several decades of declining interest), researchers began to pay particular attention to the role of immigrants in the economy. Although the subject of immigrant entrepreneurialism emerged around 1970, it really ‘‘took off’’ in the 1980s, when American analysts began to document the fact that immigrants were more prone to self-employment than the native-born population. It helped, of course, that a major shift was underway in the North American economy: after nearly half a century of falling self-employment rates, after 1970 these began to rebound, a fact that caused both researchers and policy makers to re-evaluate the role of entrepreneurship and small enterprises in the emerging regime of more flexible production. Meanwhile, another group of researchers, concerned with the apparent lack of economic progress of marginalized groups, touched off a different trajectory of scholarship that has come to be known as labour market segmentation theory (Peck, 1996). This work examines the division between jobs that reward workers for their human The author would like to thank the Department of Canadian Heritage for its support for this research and, especially, for access to the data explored in this paper. This article is part of a special issue of papers entitled ‘‘The economic context, embeddedness and immigrant entrepreneurs’’ edited by Jan Rath, Robert Kloosterman and Eran Razin.

International Journal of Entrepreneurial Behaviour & Research, Vol. 8 No. 1/2, 2002, pp. 93-112. # MCB UP Limited, 1355-2554 DOI 10.1108/13552550210423741

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capital and those that do not, the so-called primary and secondary segments of the labour market. Through theoretical effort and empirical study, researchers have begun to uncover the widespread, though often covert, processes that channel immigrants, women, and non-white individuals into secondary jobs. Generally speaking, with important exceptions (see below), there has been an upbeat tone in the work published on immigrant entrepreneurship, which has tended to portray the small-scale businesses established by immigrants both as a positive contribution to the larger economy and also to the wellbeing of minority communities. In contrast, work conducted under the rubric of labour market segmentation theory has been pessimistic, concluding that deeply-set forces in western societies reproduce disadvantage. While writers from both of these traditions have, from time to time, noted and incorporated ideas from the ‘‘other side’’, the two literatures have largely developed in isolation. In particular, there have been few detailed studies that bring the processes of labour market segmentation and ethnic entrepreneurialism into the same analytical framework, that, in effect, create a dialogue between these different views of immigrant economic participation. This type of research is particularly lacking in Canada, where the volume of research on both segmentation and immigrant/minority entrepreneurship is much less than in the USA despite the fact that, in per capita terms, immigrants are a more significant component of the Canadian population and, therefore, economy. In this paper, I survey a complex custom tabulation of census data that allows for simultaneous analysis of labour market segmentation by ethnic origin and immigration status on the one hand, and sectoral patterns of entrepreneurship on the other. I concentrate on two basic questions: what are the patterns of ethnic and immigrant labour market segmentation in Canada and how do these patterns intersect with self-employment? Theories of immigrant/ethnic self-employment I do not have the scope to provide a detailed discussion of the large body of scholarship on immigrant entrepreneurship, but highlight those aspects that address the relationship between the paid labour market and self-employment. Much of this literature seeks to explain why some groups are more entrepreneurially inclined, and more successful at operating businesses, than others. Initially, researchers looked toward cultural factors to understand these differences, but this emphasis has given way to a more complex approach that acknowledges multiple causes. In their attempt to theorize the entrepreneurial behaviour of immigrant and minority groups, Waldinger et al. (1990) argue that each cultural group has a unique mix of pre-migration, migration, and postmigration characteristics, and that this mix sets the parameters of its economic participation. For example, some groups are able to rely on extensive, alreadyexisting business networks that may even be transnational in scope (Wilson and Portes, 1980; Zhou, 2000), while others, notably African Americans and Hispanics, do not have a history of entrepreneurial success (Waldinger, 1996).

Put another way, the particular mix of class and ethnic resources varies significantly between groups (Uneke, 1994; Light, 1999). These debates about varying rates of entrepreneurship have been connected with differences of opinion over the causes and consequences of selfemployment among immigrants and minorities. Some researchers, such as Feagin and Imani (1994), believe that self-employment arises out of blocked mobility in the labour market while others emphasize the opportunity structure available to immigrants in their adopted settings (e.g. Dijst and Van Kempen, 1991; Zhou, 1995; Kloosterman, 2000). The former group represents the major exception to the trend mentioned earlier (that researchers portray ethnic/ immigrant entrepreneurship in positive terms), and highlights the low rate of profit for most entrepreneurs and the exploitative conditions of labour that often emerge in immigrant businesses (Borjas, 1986; Bonacich, 1993; Barrett et al., 1996). For them, self-employment solves few economic problems faced by immigrants and minorities, and may in fact exacerbate the poor wages and working conditions faced by marginalized workers. In some ways, the ‘‘negative’’ and ‘‘positive’’ schools of immigrant entrepreneurialism are irreconcilable; basically, they reflect differences in the understanding of, and appreciation for, capitalism (Bun and Hui, 1995). Thus, as Portes and Zhou (1996) have shown, the assumptions embedded in empirical studies of the economic return to immigrant entrepreneurship have a profound influence on the outcome of this type of research. These assumptions, as might be expected, are associated with particular ideological positions. While acknowledging these significant differences, Waldinger et al. (1990) have attempted to bring these dichotomous views together in an interactive model. According to this approach, the nature and degree of entrepreneurial behaviour is set by a dynamic relationship between group characteristics (including the extent of racism experienced in the labour market and the density of social networks with a group, among other factors) and the opportunity structure (especially market conditions and access to ownership roles) within which groups are situated (also see Rath, 2000). Waldinger et al. (1990) postulate that immigrant and minority groups develop strategies that build on the opportunities available to them through collective action. In so doing, they become concentrated into specific sectors of the economy and develop market niches. In a later reformulation of these ideas, Waldinger (1996) notes that this process of economic concentration is often associated with ethnic closure, which excludes individuals from outside particular groups from entering certain jobs. Labour market processes are treated obliquely in this literature. This is true even in the original statement of the interactive model, which offers only a cursory discussion of blocked mobility. Light and Bonacich (1988), in their study of the Los Angeles Korean community, provide one potential way to link labour market and entrepreneurial issues. They note that minority entrepreneurs typically hire workers from within their cultural group; the training received by these workers enables them to establish their own businesses, often competing against their former employers. Light and

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Bonacich label this process ‘‘ethnic facilitation’’. Bailey and Waldinger (1991) base their concept of ‘‘training systems’’ on much the same reasoning. While I see the salience of these ideas, they raise a question: how did the original immigrant/minority entrepreneurs gain their skills? To answer this, I believe we must turn to labour market segmentation theory, and combine it with the views surveyed so far in the following way: . Immigrants and racialized minority groups face barriers in the labour market. They are less likely to be hired and therefore face more frequent periods of unemployment, and are channeled into secondary positions in the labour market. While these processes are never complete (e.g. there is, after all, a minority managerial and professional class in almost every western society), they are pervasive. . Some (though not all) of these secondary jobs are associated with opportunities for self-employment. Workers in these jobs acquire necessary skills as well as market knowledge. When it is possible, selfemployment provides an attractive option for those who face unemployment, or who wish to earn higher incomes. While many of the micro-businesses established by these individuals fail, some succeed. . Those who succeed rely on a combination of factors that include their human capital (class resources), the strength and depth of the networks they are able to draw on (ethnic resources), and a host of economic factors, such as the availability of capital and labour, demand for their product, and so on (context)[1]. . Once set in motion, this micro-entrepreneurship is perpetuated through the process of ethnic facilitation. As this occurs, opportunities in the niche are closed to individuals who do not belong to the group. This means that we should expect different minority groups to occupy different economic niches, both as employees and entrepreneurs. All of these points are emphasized, in one way or another, in the existing literature, but they have not been brought together in this particular configuration. My general argument is that immigrant and minority entrepreneurship arises out of the experience of immigrants and members of minority groups as employees. That is, the forces that channel certain groups into particular occupations have a secondary effect, in that they also shape the opportunity structure and scope of entrepreneurial activities. Therefore, the disadvantages faced by groups that are poorly placed in the labour market are replicated in the experience of selfemployment. I believe this point helps us understand why minority entrepreneurship is often associated with poor economic returns, and suggests modifications to the positive view of minority entrepreneurship discussed earlier. Labour market segmentation and self-employment in Canada As I have shown in a previous study, the relatively small number of publications on labour market segmentation in Canada have been

methodologically varied and have yielded mixed results (Hiebert, 1999). Some have chosen to work with industrial sectors, others occupations; some have disaggregated the labour market into as few as six categories, others have used several hundred; some have reported descriptive statistics, others the result of multivariate inferential tests. Mainly, researchers have examined census tabulations (although Satzewich and Li (1987) use questionnaire-based information), and most of the material published so far investigates data gathered between 1971 and 1991. While all studies, regardless of methodology, have documented high levels of sex-typing in the labour market, results on ethnic groups and immigrant populations have been ambiguous. Predictably, writers using aggregated categories have found low rates of ethnic segmentation (Basavarajappa and Verma, 1990) while studies with more elaborate classification systems have been able to identify ethnic clusters more readily (Preston and Giles, 1997; Hiebert, 1999). Although more detailed studies have found a tendency for women, visible minorities and immigrants to be employed in secondary occupations, they have also found a lot of variation around this basic pattern (Preston and Giles, 1997; Reitz, 1998; Hiebert, 1999). Most interpret this as a direct reflection of Canadian immigration policy, which in recent years has prioritized the entry of skilled immigrants who have generally been able to enter primary-level occupations. Still, the predominant pattern is one of immigrants being over-represented in secondary-segment occupations such as agricultural labourers, in garment production, as taxi drivers, and so on. Studies of immigrant entrepreneurship in Canada are equally inconsistent. According to Lo et al. (1999), there is little dialogue between the many interview-based projects, which usually survey a non-representative sample of entrepreneurs from a single group, and statistical analyses of census data. As in other countries where this type of research is common[2], in Canada researchers have identified wide variations in the degree of self-employment of different immigrant groups (Maxim, 1992; Beaujot et al., 1994; Razin and Langlois, 1995; Li, 1997; Mata and Pendakur, 1997). Canadian writers, as elsewhere, have invoked a combination of class and ethnic resources, and the opportunity structures of urban labour markets, to explain these differences. A consensus appears to have emerged among those studying the Toronto situation that class resources are critical for the transition from wage labour to self-employment, but that entrepreneurs in groups with substantial ethnic resources are more likely to be successful (Marger, 1989; Oneke, 1994; Lo et al., 1999). There is also a basic dispute about the economic benefits received by immigrants and members of Canadian minority groups when they become selfemployed. In an intricate quantitative examination of 1986 census data, focusing on men only, Maxim (1992) demonstrates that immigrants and people of non-European origin both face income penalties in the paid labour force (holding a large array of other variables constant), but that these vanish when they become self-employed. However, Reitz (1990) argues that returns to self-

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employment vary sharply between groups, ranging from those who earn more through self-employment than when employed in the regular labour market, to others who have less to gain from self-employment. Li (1994, 1997) has elaborated this point by investigating the returns to self-employment for workers of European versus visible minority origin. Based on 1986 data, he found that nearly half of the visible minority immigrants who become selfemployed do so in the retailing and accommodation/food services sectors. In these two sectors, entrepreneurs – whatever their immigration status or ethnic origin – earn low average incomes regardless of their human capital. Visible minority immigrants are under-represented as entrepreneurs in other sectors of the economy, where returns to human capital for the self-employed are higher, but where start-up costs are also more significant. Visible minority immigrants therefore, on average, gain modest rewards from self-employment because of the particular characteristics of the sectors in which they specialize. Two groups of researchers have attempted – as I am trying to do here – to better understand the links between these niche economies and labour market segmentation. Beaujot et al. (1994) try to determine whether the blocked mobility hypothesis – that individuals turn to self-employment when they have no means of upward mobility in the paid labour market – can be used to explain rates of self-employment in Canada in 1986. They reveal a high level of self-employment in non-professional services among immigrants with low educational attainment, and speculate that this is because these individuals would otherwise be relegated to the secondary segment of the labour market. Further, immigrants with high educational qualifications obtained outside Canada are also over-represented in non-professional, self-employed occupations. They see this latter result as strongly suggestive of blocked mobility, in that these immigrants probably experienced difficulty in gaining recognition for their human capital in the paid labour market. Finally, in contrast to Li, Beaujot et al. (1994) find that both these groups of entrepreneurs are significantly better off than their employed counterparts. Broadly similar results are obtained in a remarkable study by Mata and Pendakur (1997), where they use the main base of the Canadian census to trace, through four census periods, the changing economic participation of the cohort of male immigrants who arrived in Canada between 1946-1960. These men began their careers in Canada at a time when well-paid work was available for individuals with little formal education in construction and manufacturing. Mata and Pendakur find that the initial entry into the labour market was decisive in determining their future; that is, once they found work in a particular sector, they stayed there. Given the apparent barriers inhibiting movement between industrial sectors, most of the men who attained upward mobility did so by becoming self-employed. In the process, they formed ethnic niches (e.g. Italians in masonry, Germans in carpentry). The outcome for welleducated immigrants was quite different: while many also became selfemployed, they typically did so in the service sector and did not tend to form ethnic business concentrations.

I am also interested in the relationship between labour market segmentation and self-employment, and replicate some aspects of Mata and Pendakur’s study, though with less elaborate statistical procedures, a focus on occupational concentrations rather than industrial sectors, and more attention to the different experiences of European-origin and visible minority groups (which were far less numerous in the 1946-1960 cohort that they explore). Data The data for this paper are derived from a special tabulation of the 1996 Canadian census. The particular table explored here is based on a sample of roughly 1.6 million individuals[3]. The criteria for selection, and the variables included in the analysis, were[4]: .

.

.

.

.

Only individuals 15 years of age and older, who were not living in an institution, and who were part of the labour force at some point between 1 January 1995 and the census date of 4 May 1996 are included. Note that the period of actual employment during this 16-month period could have been as little as one week and, unfortunately, employed and unemployed workers are indistinguishable in the data analyzed in this study. Ethnic origin: only those specifying a single ethnic origin in a large group (minimum 35,000 given the above criteria) were included (Table I). By removing those declaring multiple ethnic origins and a number of smaller groups, approximately one-third of the total population was dropped from the study. Immigration status: in addition to the total population, two categories of immigrants were defined: all immigrants; and those who became landed immigrants between 1981 and the end of April 1996. Occupation: the type of job done either in the week before the census or, if the individual was unemployed at that time, the job of longest duration in the 16 months prior to the census. Individuals with more than one job were classified according to the job at which they worked the largest number of hours. The Canadian labour market was classified into ten broad categories, based on the Standard Industrial Classification system (Table II). For analysis of labour market segmentation, these categories were further subdivided into 52 detailed occupations. Class of worker: as in the occupation variable, respondents were asked to describe the job they held in the week before the census or, if unemployed at that time, the job they had for the longest period during the previous 16 months. Anyone who spent the largest number of hours working, with or without pay, for someone else is classified as an employee. Those who were primarily self-employed, whether in an incorporated or unincorporated company, are classified as selfemployed.

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Table I. Population by ethnic origin, immigration status, and employment type, Canada, 1996

Total population Total, single ethnic origin British French Dutch German Greek Italian Portuguese Scandinavian Hungarian Polish Ukrainian Balkan Jewish Arab West Asian South Asian East Asian Chinese Filipino Vietnamese African (black) Caribbean Jamaican Latin American Canadian Aboriginal

8,221,015 1,553,195 1,283,145 172,600 382,440 73,850 364,195 124,955 69,140 47,980 123,770 168,005 77,065 87,760 65,295 36,965 248,250 369,515 321,675 100,545 40,240 40,835 129,865 57,095 42,105 2,272,595 132,765

Immigrants Total 1981-1996 2,133,820 290,870 34,115 66,830 98,525 44,160 165,980 100,200 16,920 23,345 75,910 13,035 54,360 33,175 56,375 34,815 234,850 318,725 287,255 97,655 39,755 35,585 116,495 51,380 40,710 15,690 1,235

848,750 48,810 11,550 6,720 15,015 3,825 7,420 26,065 2,245 5,915 53,820 4,220 18,110 11,070 35,665 24,475 132,830 192,080 176,430 63,405 26,650 25,765 47,305 20,270 27,985 3,920 455

Class of worker Employed Self-employed 7,091,095 1,332,200 1,133,525 133,080 297,550 58,110 313,405 114,435 53,145 38,740 105,595 137,145 66,015 62,580 51,335 28,560 219,875 303,380 269,935 96,590 36,745 37,265 121,945 53,515 38,465 2,012,050 123,900

1,129,920 220,990 149,615 39,520 84,890 15,740 50,790 10,515 15,995 9,240 18,170 30,855 11,050 25,175 13,960 8,405 28,375 66,130 51,740 3,950 3,485 3,570 7,920 3,580 3,645 260,550 8,860

Source: Special tabulation of 1996 Census of Canada

While there is no perfect measure of labour market segmentation, I have chosen to use a statistic (the Index of Segregation) that summarizes the extent to which members of a particular ethnic group have a widely distributed vs. distinct labour market profile. Groups that have the same labour market profile as the rest of the population, across the occupational categories defined for this analysis, are assigned an index value of zero, while those who are completely distinct (who work in occupations that they alone hold, and are employed in no other occupations – i.e. they are completely ghettoized in the labour market) would be assigned a value of 100. The Index of Segregation is a descriptive statistic and there is no test to determine its statistical significance. Generally speaking, values greater than 25 are considered noteworthy although, as we will see, the precise nature of labour market segmentation matters a great deal in determining whether it is a problem.

Total Total – all occupations Management occupations Business, finance and administrative occupations Natural and applied sciences and related occupations Health occupations Occupations in social science, education, government service and religion Occupations in art, culture, recreation and sport Sales and service occupations Trades, transport and equipment operators and related occupations Occupations unique to primary industry Occupations unique to processing, manufacturing and utilities

Employed Self-employed

8,221,015 778,195 1,548,225

7,091,095 545,035 1,438,225

1,129,920 233,155 109,995

410,880 413,265

368,960 361,155

41,920 52,110

499,715 174,325 1,954,905

463,470 119,895 1,744,335

36,245 54,425 210,575

1,289,985 401,225

1,098,705 225,945

191,275 175,275

750,295

725,365

24,935

Note: Only those declaring a single ethnic origin are included Source: Special tabulation

Broad national patterns As might be expected, there is a clear relationship between the amount of time people have spent in Canada and their position in the labour market. Groups with the fewest recent immigrants are, generally, spread evenly across the Canadian labour market. This is particularly true of what we might call the ‘‘charter groups’’ of Canada: people who indicated North-western European or Canadian ethnic origins in the census (Table III). Groups with higher ratios of immigrants, particularly those of non-European origin, tend to be concentrated in specific occupations. Filipinos, Latin Americans, and Vietnamese Canadians occupy the extreme position, with around two-thirds of their populations having arrived in the 15 years prior to the census, and segmentation indices above 30. Significantly, the only group with a relatively high proportion of immigrants and relatively little labour market segmentation are those of Polish ancestry, who also happen to be white. There are a few other groups that do not follow the general relationship between immigrant status and segmentation, notably those of Jewish, Portuguese, and Aboriginal descent. I will return to these cases below, since each reveals a significant aspect of labour market segmentation. The relationship between immigrant status and degree of self-employment in Canada is fairly predictable, given the results of studies elsewhere: recent immigrants are relatively less likely to be self-employed than the total population, but the rate of self-employment is higher for more established cohorts (Table IV). Those immigrants who have been in Canada for between five and 15 years have achieved almost the same level of self-employment as the total working population, while those who have been here longer than 15 years have higher rates. Disaggregating the data by ethnic group, we see a

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Table II. Occupational structure, by employment type, Canada, 1996

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Table III. Self-employment and LMS statistics, Canadian labour force, 1996

Total, single origin British French Dutch German Greek Italian Portuguese Scandinavian Hungarian Polish Ukrainian Balkan Jewish Arab West Asian South Asian East Asian Chinese Filipino Vietnamese African (black) Caribbean Jamaican Latin American Canadian

8,221,015 1,553,195 1,283,145 172,600 382,440 73,850 364,195 124,955 69,140 47,980 123,770 168,005 77,065 87,760 65,295 36,965 248,250 369,515 321,675 100,545 40,240 40,835 129,865 57,095 42,105 2,272,595

10.3 3.1 0.9 3.9 3.9 5.2 2.0 20.9 3.2 12.3 43.5 2.5 23.5 12.6 54.6 66.2 53.5 52.0 54.8 63.1 66.2 63.1 36.4 35.5 66.5 0.2

LMS index

Immigrants, landing 19811996 SelfSelfemployed Total LMS employed (%) (%) number index

8.6 8.7 15.4 12.8 25.8 13.6 31.2 13.4 9.5 11.6 10.8 16.6 41.1 23.4 22.8 19.1 24.3 24.6 41.8 40.2 21.8 24.3 26.0 30.7 8.6

Total labour force

Table IV. Self-employment by immigrant status, Canada

Total population Non-immigrants Total immigrant population Landed before 1961 Landed 1961-1970 Landed 1971-1980 Landed 1981-1996 1981-1990 1991-1996

8,221,015 6,087,190 2,133,820 318,055 414,040 552,975 848,750 494,130 354,620

13.7 14.2 11.7 22.9 22.2 21.3 13.9 8.4 23.1 19.3 14.7 18.4 14.3 28.7 21.4 22.7 11.4 17.9 16.1 3.9 8.7 8.7 6.1 6.3 8.7 11.5

848,750 48,810 11,550 6,720 15,015 3,825 7,420 26,065 2,245 5,915 53,820 4,220 18,110 11,070 35,665 24,475 132,830 192,080 176,430 63,405 26,650 25,765 47,305 20,270 27,985 3,920

15.9 26.4 35.1 23.9 32.8 19.8 51.6 22.6 28.1 29.2 30.6 30.1 30.1 25.8 25.8 25.0 25.3 25.0 50.9 45.8 28.3 35.0 35.7 37.0 14.2

12.9 14.8 16.6 34.7 25.1 22.5 15.6 6.5 21.8 15.3 13.0 10.5 11.5 25.0 19.5 22.1 8.9 18.1 16.0 3.2 6.6 8.2 4.0 4.5 7.3 12.5 (continued)

Self-employed labour force No. Per cent 1,129,920 788,215 341,700 76,810 72,165 83,555 109,170 66,610 42,560

13.7 12.9 16.0 24.1 17.4 15.1 12.9 13.5 12.0

weak tendency for groups with high numbers of recent immigrants to have relatively low self-employment rates, but there is a great deal of variability at both ends of the scale (Table III). Groups with less than 20 per cent immigrants have a wide range of entrepreneurship ratios, from Aboriginals (just over 5 per cent self-employment), to Jewish individuals (nearly 30 per cent). Note also that several of the most advantaged groups in Canada, especially those of British origin, have only average rates of self-employment, while other privileged groups, such as Germans, Scandinavians, and the Dutch, are more entrepreneurially inclined. Jewish men and women have a particularly distinct profile, with the highest level of self-employment of any group. Groups with more than 50 per cent immigrants are similarly varied in terms of selfemployment, ranging from Filipinos, at 4 per cent, to people from the western part of Asia (mainly from Iran in the Canadian case), at over 20 per cent. As in the USA, Latin Americans in Canada are rarely self-employed. Surprisingly, given the literature on the UK, South Asians are also below average in this respect. As we will see later, the level of immigrant and minority selfemployment is closely associated with their degree and – crucially – kind of labour market segmentation. With one exception, the relationship between self-employment and labour market segmentation is relatively clear, although it defies the general expectation in much of the literature on minority entrepreneurship that groups which face barriers in the labour market have the most to gain by becoming entrepreneurs[5]. Looking at the total working population (Table III), we see that European-origin groups, generally, are widely distributed across occupations but have the highest average rate of self-employment (though with much variability). At the opposite end of the scale, aside from those of Jewish origin, ethnic groups that are segmented into particular portions of the labour market have the lowest level of self-employment. Clearly, there is much to be gained here by reflecting on the particular mix of class and ethnic resources of these groups in order to understand why they do not fit the standard stereotype that blocked mobility leads to self-employment. Finally, there is substantial variation in rates of self-employment among groups that have middle-level indices of segmentation. South Asians and Afro-Caribbeans share belowaverage rates of self-employment, while groups from the Middle East, East Asia, and Greece are more entrepreneurial. Note that these general patterns are replicated – with a few exceptions – when we explore the relationship between labour market segmentation and self-employment for recent immigrants (Table III). Detailed patterns of labour market segmentation and selfemployment To build a portrait of the relationship between labour market segmentation and self-employment, I computed an index of representation for each ethnic group and occupation[6]. The index compares the actual number of individuals in a particular group and job with the number that would be expected if ethnicity

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Table V. Areas of greatest occupational overrepresentation, Canada, 1996 (employed workers)

and occupational structure were completely independent variables. The index of representation is unity when the group has an ‘‘expected’’ number of individuals in a particular occupation, two when there are twice the number than would be expected, and 0.5 when there are half as many as expected. Indices were computed separately for individuals who are employed and those who are self-employed, and the two values were compared to ascertain the extent to which entrepreneurship in a group coincides with labour market specialization. As seen in Table V, and previously in Table III, visible minorities are the most concentrated in specific segments of the labour market. Moreover, in most cases labour market segmentation is synonymous with disadvantage. Generally, Northwestern European-origin groups (which includes the ‘‘Canadian’’ category) are the most well positioned in the labour market, in terms of both status and remuneration. Southern and eastern European groups tend to be drawn to (mainly unionized) jobs in manufacturing and construction, and the natural sciences. Several European-origin groups deviate from these patterns: Greeks, who have a relatively secure niche in retail and the restaurant trade; Ukrainians, who continue to have a strong presence in agricultural occupations and have also gravitated toward the teaching professions; and the British French Dutchb Germanb Greekab Italian Portuguesea Scandinavianb Hungarianb Polishb Ukrainianb Balkanb Jewishab Arabab West Asianab South Asian East Asianab Chineseab Filipinoa Vietnamesea African Caribbeana Jamaicana Latin Americana Canadian Aboriginala

Senior management, finance, protection Teaching, the arts, management Agriculture, finance, nursing Agriculture, contracting, machining Cooks, retail managers, garment sewing Garment sewing, construction trades, salespersons Manufacturing workers, janitors, labourers Agriculture, other primary, finance Machinists, mechanics, the arts Manufacturing workers, machinists, natural sciences Agriculture, contractors, teachers Machinists, manufacturing workers, natural sciences Medical professionals, senior management, professionals (law) Drivers, health professionals, salespersons Drivers, natural sciences, construction trades Drivers, manufacturing workers, agriculture Garment sewing, cooks, natural sciences Garment sewing, cooks, natural sciences Domestics/childcare, nurses/orderlies, garment sewing Garment sewing, manufacturing workers, natural sciences Drivers, manufacturing workers, janitorial Nurses/orderlies, garment sewing, domestics Nurses/orderlies, manufacturing workers, domestics Janitors, manufacturing workers, service workers Equipment operators, agriculture, engineers Resource industries, social services, senior management

Notes: a Groups with above-average (median) segmentation indices b Groups with above-average (median) rates of self-employment

Portuguese who, of all the European groups, have the lowest average education attainment. As seen in other studies of the Canadian labour market, Jewish men and women have achieved remarkable success in entering professional and managerial occupations. The occupational profile of visible minority groups reflects the selection criteria of Canada’s recent immigration system. Some of these groups – particularly of Arab, West Asian, Chinese and Vietnamese origin – occupy polarized positions in the labour market. The highest indices of representation for Arabs, for example, are in the transportation sector and the health professions, occupations that could hardly be more different in terms of educational requirements and social status. Similarly, Chinese-Canadians are over-represented in both the declining garment sector and in engineering and other natural science-based occupations[7]. Other minority groups, however, appear to be more uniformly channeled into poorly-paid work. Latin Americans, Africans, West Asians, and people from the Philippines – groups that have all arrived relatively recently (at least in significant numbers) in Canada – tend to be clustered in janitorial work, truck and taxi transportation, garment production, domestic service, and in helping roles in health care. South Asians and Caribbeans, who have lived in Canada for much longer than the aforementioned groups, have similar profiles in the labour market. Canada’s Aboriginal population also has a highly distinct position in the labour market. As might be expected, given the traditional focus of indigenous peoples on the land, Aboriginals are highly concentrated in primary activities, especially forestry, fishing, and hunting occupations. Interestingly, the other two areas of particularly high indices of representation are in social services and senior management. Both of these types of occupations reflect the growing participation of Aboriginals in the management of their own communities. While the group-by-group patterns of labour market segmentation are complex, as we have seen, the relationship between labour market participation and self-employment is actually quite straightforward. For each ethnic group surveyed here, there is a close correspondence between the occupations employed and self-employed individuals perform (Table VI). This relationship is closest for Arab-Canadians, who are concentrated in the transportation sector, retail sales, and as professionals in the health sector (Table VII). All three of these portions of the labour market lend themselves to entrepreneurial behaviour, and it stands to reason that Arab-Canadians have a relatively high rate of self-employment. In contrast, Canadians of South Asian and African descent have been channeled into transportation as well, but also manufacturing, janitorial work (Africans), and other poorly-paid jobs. Aside from transportation, these occupations do not readily lend themselves to the transition from paid labour to self-employment, which helps explain why both groups have low levels of entrepreneurial behaviour. This situation is even more pronounced for men and women from the Philippines, who frequently come to Canada under the Domestic Caregiver program (i.e. their entry into Canada is related to acquiring a job as a childcare/

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Table VI. Correspondence between sectors of occupational concentration and self-employment specialization

Ranked by r Arab African (black) Greek Jewish West Asian German Filipino Vietnamese South Asian Caribbean Dutch Balkan Portuguese Hungarian Italian Aboriginal Chinese Latin American French Jamaican Canadian British Polish East Asian Ukrainian Scandinavian

r

Selfemployed (%)

Ranked by % self-employment

r

Selfemployed (%)

0.90 0.90 0.89 0.87 0.81 0.81 0.80 0.79 0.76 0.74 0.74 0.71 0.71 0.69 0.69 0.68 0.65 0.65 0.64 0.62 0.60 0.59 0.57 0.55 0.50 0.50

21.4 8.7 21.3 28.7 22.7 22.2 3.9 8.7 11.4 6.1 22.9 14.3 8.4 19.3 13.9 6.7 16.1 8.7 11.7 6.3 11.5 14.2 14.7 17.9 18.4 23.1

Jewish Scandinavian Dutch West Asian German Arab Greek Hungarian Ukrainian East Asian Chinese Polish Balkan British Italian French Canadian South Asian African (black) Vietnamese Latin American Portuguese Aboriginal Jamaican Caribbean Filipino

0.87 0.50 0.74 0.81 0.81 0.90 0.89 0.69 0.50 0.55 0.65 0.57 0.71 0.59 0.69 0.64 0.60 0.76 0.90 0.79 0.65 0.71 0.68 0.62 0.74 0.80

28.7 23.1 22.9 22.7 22.2 21.4 21.3 19.3 18.4 17.9 16.1 14.7 14.3 14.2 13.9 11.7 11.5 11.4 8.7 8.7 8.7 8.4 6.7 6.3 6.1 3.9

domestic worker in a Canadian home) and are strongly concentrated in childcare, personal services, assisting occupations in health care, and garment production. The transition from domestic work to self-employment is difficult and rare, and there is little scope for entrepreneurial activity in supporting roles in the Canadian health care system. While garment production is a sector in which many immigrants establish small firms, this is not generally the case for women, and it is mainly Filipinas who are employed in this niche. The particular forms of labour market segmentation experienced by men and women from the Philippines, therefore, inhibits their potential for entrepreneurship (and helps explain why less than 4 per cent of the group is self-employed). Chinese- and Vietnamese-Canadians have broadly similar labour market and entrepreneurial profiles – specializing in a few specific professional occupations, food and beverage trades, and manufacturing. Chinese-Canadians, with a longer history of settlement in Canada and a far more elaborate transnational business network, have been more successful at generating small businesses out of this position than their Vietnamese counterparts.

E

Greek SE

Portuguese E SE

E

Jewish SE

Arab E

SE

South Asian E SE

Chinese E SE

Filipino E SE

Vietnamese E SE

Number 58,110 15,740 114,435 10,515 62,580 25,175 51,335 13,960 219,875 28,375 269,935 51,740 96,590 3,950 36,745 3,485 Index of segmentation 23.4 37.4 31.4 28.0 38.9 42.8 20.6 37.1 19.5 32.1 23.9 34.3 39.9 40.7 41.1 39.2 Per cent SE 21.3 8.4 28.7 21.4 11.4 16.1 3.9 8.7 Correlation (E/SE) 0.895 0.708 0.870 0.900 0.758 0.650 0.801 0.789 Senior management 1.1 0.8 0.3 0.6 3.6 2.0 1.4 1.5 0.6 1.0 0.8 1.3 0.2 0.3 0.2 0.3 Specialist managers 0.9 1.1 0.6 1.1 2.5 2.0 1.2 1.5 0.8 1.2 1.2 2.1 0.4 0.5 0.4 0.6 Managers in retail, etc. 2.6 2.8 0.8 1.0 1.4 0.8 2.4 2.3 0.9 1.6 1.1 1.7 0.4 1.1 0.6 1.6 Other managers n.e.c. 0.7 0.8 0.6 1.3 1.6 1.1 1.0 0.8 0.7 0.9 0.9 1.2 0.3 0.8 0.3 0.5 Bus/finance professionals 1.1 0.6 0.5 0.4 2.4 2.9 1.2 0.8 1.5 1.4 2.0 1.6 0.9 1.0 0.7 0.3 Bus/finance administrative 0.9 0.3 0.7 0.5 1.7 1.1 0.8 0.3 0.9 0.8 1.2 0.8 0.9 1.0 0.5 0.5 Bus/finance secretaries 0.7 0.4 0.6 1.2 1.2 0.5 0.6 0.5 0.6 0.6 0.8 1.1 0.4 0.4 0.2 0.6 Bus/finance regulatory 0.9 0.9 0.7 0.9 2.1 1.9 0.9 1.3 0.8 1.3 1.0 1.7 0.6 0.7 0.3 0.8 Bus/Finance clerical sup. 0.9 0.4 1.0 0.0 1.0 2.2 0.9 0.0 1.1 1.1 0.9 1.1 0.8 0.0 0.3 0.0 Bus/finance clerical 0.9 0.6 0.9 0.8 1.0 1.0 0.8 0.9 1.2 1.2 1.1 1.2 1.2 1.3 0.6 0.5 Nat/science professionals 0.9 0.6 0.5 0.6 1.5 1.4 2.5 1.5 1.5 1.2 2.9 1.8 0.8 1.8 2.4 1.1 Nat/science technical 0.6 0.7 0.5 1.1 0.5 0.6 1.0 0.8 0.8 0.8 1.2 1.1 0.9 2.4 1.2 1.6 Health professionals 0.7 0.5 0.2 0.4 4.8 3.2 2.4 1.7 1.6 2.3 2.4 1.8 0.5 0.8 2.1 3.3 Health nurses 0.2 0.0 0.3 0.0 0.4 0.9 0.4 0.6 0.6 1.0 0.7 0.4 2.8 3.9 0.2 0.0 Health technical 0.6 0.7 0.4 0.2 1.0 1.1 0.7 1.0 0.7 0.9 0.9 1.7 2.1 1.1 0.9 1.7 Health assisting 0.5 0.6 0.7 0.6 0.4 0.5 0.4 0.7 0.8 0.7 0.4 0.8 3.7 4.7 0.6 0.0 Soc. sciences professional 0.8 0.3 0.3 0.2 3.5 4.6 0.9 0.7 0.7 0.7 0.8 0.6 0.3 0.5 0.4 0.4 Teachers and professors 0.7 0.4 0.3 0.3 2.6 2.0 1.3 0.3 0.6 1.1 0.6 1.3 0.2 1.4 0.2 0.0 Social services workers 0.7 1.3 0.5 1.0 1.7 1.8 0.6 0.9 0.5 1.7 0.6 2.1 0.5 3.4 0.3 0.0 Art/culture professionals 0.9 0.3 0.4 0.4 3.1 1.8 1.0 0.4 0.6 0.5 1.0 0.9 0.5 1.4 0.5 0.5 Art/culture technical 1.0 0.7 0.6 0.7 1.6 1.2 0.7 0.5 0.6 0.4 1.0 0.9 0.7 1.3 0.8 1.4 Sales/service supervisors 1.4 2.7 1.3 3.2 0.9 1.3 1.4 1.4 1.0 1.7 0.9 1.3 1.3 1.5 0.3 1.0 Sales/service specialists 0.9 0.7 0.6 0.8 2.6 1.9 1.1 1.2 0.8 1.3 1.2 1.9 0.4 1.0 0.3 0.9 Sales/service salespersons 1.1 0.9 0.8 1.1 1.5 1.6 1.6 1.7 0.9 1.6 0.9 1.2 0.7 0.9 0.5 1.2 Sales/service cashiers 1.2 1.8 0.9 1.0 0.3 0.2 2.1 4.1 1.2 2.3 1.0 3.0 1.4 0.0 0.6 4.2 Sales/service cooks, etc. 4.1 7.9 0.8 0.8 0.3 0.4 2.1 2.6 1.3 0.9 3.1 4.8 0.9 0.6 2.2 4.5 Sales/service food and beverages 3.2 6.0 0.9 2.0 0.5 0.3 1.3 1.9 0.4 0.7 1.7 4.0 0.8 1.2 0.9 2.3 (continued)

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Table VII. Indices of representation in the paid vs. self-employed labour force, selected groups, Canada, 1996

Sales/service protection Sales/service, travel, etc. Sales/service childcare Sales/service domestics Sales/service other Sales/service janitorial Trades contractors Trades construction Trades engineers Trades machinists Trades mechanics Trades other Trans heavy eq. ops. Trans light eq. ops Trans drivers Trades/trans helpers Primary agric. non-labour Primary agric. workers Primary non-agric. Primary non-agric. workers Manuf. supervisors Manuf. machine ops. Manuf. sewing ops. Manuf. assemblers Manuf. labourers

Greek SE

Portuguese E SE

E

Jewish SE

Arab E

SE

South Asian E SE

Chinese E SE

Filipino E SE

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Table VII. E

Vietnamese E SE

0.4 1.3 0.6 0.4 1.6 1.4 0.5 0.8 0.8 0.5 0.7 1.3 0.2 0.6 2.2 0.5 0.1 0.1 0.0

0.0 1.8 0.3 0.3 1.5 1.6 1.1 0.9 1.4 0.2 0.9 1.2 0.1 0.8 1.9 0.7 0.1 0.0 0.0

0.3 1.1 0.6 0.6 1.9 2.8 1.6 2.7 0.6 1.4 0.9 1.2 1.1 0.6 0.4 2.8 0.7 0.8 0.3

0.6 1.7 1.3 1.2 1.9 3.0 2.1 2.2 1.2 1.3 1.1 1.5 0.4 1.0 1.3 3.3 0.4 0.4 0.1

0.2 1.7 0.8 0.4 0.4 0.2 0.4 0.2 0.2 0.2 0.2 0.5 0.1 0.3 1.5 0.2 0.1 0.1 0.0

1.2 1.1 0.3 0.2 0.4 0.1 0.5 0.1 0.5 0.3 0.2 0.6 0.0 0.4 1.0 0.3 0.0 0.0 0.0

0.6 1.6 0.8 0.5 1.1 0.7 0.5 0.4 0.4 1.0 0.8 1.1 0.2 0.8 6.1 0.5 0.1 0.1 0.1

0.0 0.9 0.6 0.6 0.9 0.4 0.3 0.4 0.7 0.4 0.9 1.5 0.2 2.3 8.6 0.5 0.0 0.0 0.0

0.7 0.8 0.8 0.7 1.2 1.0 0.5 0.4 0.5 1.3 0.7 0.8 0.1 0.9 4.7 0.9 1.3 1.8 0.1

1.0 1.5 1.2 1.2 0.7 0.8 0.6 0.3 0.5 1.2 1.0 0.6 0.0 2.9 7.9 0.7 0.1 0.3 0.0

0.2 1.2 0.6 0.8 1.0 0.6 0.3 0.3 0.4 0.6 0.5 1.1 0.0 0.3 0.4 0.4 0.2 0.3 0.1

0.7 1.1 0.6 0.7 0.7 0.4 0.3 0.3 0.4 0.4 0.4 0.8 0.0 0.3 0.3 0.3 0.1 0.2 0.1

0.3 1.0 5.0 8.7 1.8 2.1 0.2 0.1 0.5 1.1 0.6 0.8 0.1 0.2 0.2 0.6 0.1 0.1 0.0

0.0 2.3 4.5 5.4 2.2 3.5 0.1 0.3 0.0 2.0 0.8 0.8 0.0 0.6 0.6 0.7 0.1 0.0 0.0

0.2 0.8 0.5 0.6 1.3 1.3 0.5 0.8 0.5 1.7 0.8 2.4 0.0 0.3 0.6 0.9 0.6 0.9 0.6

0.0 1.3 0.8 1.0 1.6 1.7 0.2 0.3 0.7 0.0 0.7 1.8 0.0 0.6 1.4 0.6 0.2 0.2 3.1

0.2 0.8 1.3 4.1 1.0 0.8

0.3 1.6 1.4 3.8 0.7 1.0

1.3 1.4 2.1 3.2 1.8 1.9

2.2 1.4 1.4 1.8 0.4 1.9

0.1 0.5 0.2 0.2 0.2 0.2

0.0 0.9 0.5 0.4 0.2 0.5

0.3 0.9 0.8 1.0 1.0 0.6

0.2 0.9 0.7 1.4 0.8 0.5

1.8 1.2 1.8 2.1 2.0 2.2

0.6 0.7 0.9 1.4 1.2 2.6

0.2 0.7 1.5 4.7 1.4 1.1

0.2 0.8 1.0 2.2 0.7 1.2

0.3 0.7 1.4 2.3 2.2 1.1

1.4 0.0 1.8 3.3 1.5 1.7

1.0 1.3 3.6 8.8 5.0 2.6

0.8 0.9 2.7 8.3 3.8 6.4

Notes: E = employed; SE = self-employed

There are equally stark contrasts in the labour market and self-employment profiles of non-visible minority groups. Polish-Canadians (not included in Table VII), for example, have yet to develop any particular niche, either in paid employment or entrepreneurship (their index values are close to unity across all occupations). At the Canadian scale, people of Dutch ancestry have developed just one strong niche economy: farming. Greeks, on the other hand, have built a large ethnic economy out of entrepreneurship in the restaurant sector, providing substantial jobs within the group. As in the case of Filipinos and African-Canadians, individuals of Portuguese descent rarely become selfemployed. When they do engage in entrepreneurship, however, it is usually in the relatively marginal janitorial and low-level construction sectors – exactly the occupations where Portuguese-origin men are most likely to find work. Jewish-Canadians provide a counterpoint example. They are one of the most entrepreneurially-oriented groups in Canada but, in contrast to all of the other groups, have done so through the professions, particularly health care and jurisprudence. Conclusion Despite the generalized scale of this analysis and, as always, the caveats that need to be made when using census statistics, there are clear patterns in the data surveyed here. Using the ideas and methodologies of labour market segmentation theory, we see that ethnic groups are differentially positioned in the labour market. Extending this framework to survey the nature and degree of self-employment, we see that, once in place, the occupational profile of a group has a direct bearing on the entrepreneurial behaviour of its members. This is a key aspect of economic embeddedness in terms of entrepreneurship: for the most part, prospective entrepreneurs can only establish businesses in the sectors of the economy they know and the potential for self-employment is largely defined in the paid labour market[8]. Groups embedded (as employees) in sectors where entrepreneurship is an option – such as agriculture, transportation, construction, the restaurant industry and, in the case of JewishCanadians, law and medicine – have the highest rates of self-employment. Conversely, with some exceptions, groups with relatively few entrepreneurs occupy jobs in the public sector, senior management, personal service, and in (non-garment) manufacturing. Although the data explored here provide a single snapshot, and causality can only be speculated, I believe this provides evidence for the ethnic facilitation cycle described earlier: once there is an entrepreneurially-based niche economy in place, incoming immigrants gravitate toward job opportunities in the niche. The important point, of course, is that other opportunities are restricted once this cycle takes hold. Equally significant is the fact that programs designed to encourage immigrants and minorities to start businesses are most likely to succeed for those groups appropriately positioned in the paid labour force. It is probably of little use, under these circumstances, to expect individuals from the Philippines, for example, to increase their rate of self-employment without first dealing with

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the forces that lead them to concentrate in domestic care, helping occupations in health services, and so on. Finally, the symbiotic relations between paid labour and self-employment help us understand why so few immigrants and minorities use the programs created by the government to support small businesses. Those with the scope to become self-employed do so as part of the employment/self-employment cycle described here, while those outside this cycle are unlikely to participate in programs since the work they know does not lend itself to entrepreneurship. Notes 1. See Light and Rosenstein (1995) for a useful statement of this adaptation of the interactive model of immigrant entrepreneurship reviewed earlier. 2. Variations between birthplace groups in the USA are reviewed in Razin and Light (1998); for figures on Australia, see Collins et al. (1995). 3. Statistics Canada sampled every fifth household with a detailed questionnaire in the 1996 census. In each household, one particular person filled out the form, answering a set of questions for each individual member of the household. Data used here were acquired from Statistics Canada by Canadian Heritage and are reported as population estimates; therefore the total in Table I is 8.2 million. 4. Note that sex was included as a variable but gender differences – which are highly significant in terms of the nature and degree of self-employment – will not be addressed in this paper. I presented preliminary findings on this issue at the ‘‘Self-employment, gender and migration’’ conference, held in San Feliu de Guixols, Spain, in October 2000, in a paper entitled ‘‘Gender and immigrant self-employment: presences and absences in official statistics’’. 5. The correlation coefficient between these variables is –0.32, but this figure rises to –0.57 when the Jewish group is removed from the calculation. 6. The expected frequency for a particular ethnic group/occupation combination is calculated in the same way as a cell in a chi-squared contingency table, by dividing the product of the row (occupation) and column (ethnic group) totals by the grand total (total population). The index is computed by dividing this expected frequency by the actual number in the cell. 7. At least some of this polarization is related to gender. In all ethnic groups, but particularly those that are the most marginalized in the labour market, women are much more likely to be found in the personal services and non-unionized manufacturing jobs than men. 8. Of course, in countries where there are more elaborate welfare states, and especially where training is more widely available and targeted to the needs of immigrants, the link between the labour market and self-employment should be less direct. I thank Ewald Engelen for this helpful point. References Bailey, T. and Waldinger, R. (1991), ‘‘Primary, secondary, and enclave labor markets: a training systems approach’’, American Sociological Review, Vol. 56, pp. 432-45. Barrett, G.A., Jones, T.P. and McEvoy, D. (1996), ‘‘Ethnic minority business: theoretical discourse in Britain and North America’’, Urban Studies, Vol. 33, pp. 783-809. Basavarajappa, K.G. and Verma, R.B.P. (1990), ‘‘Occupational composition of immigrant women’’, in Halli, S.S., Trovato, F. and Driedger, L. (Eds), Ethnic Demography: Canadian Immigrant, Racial and Cultural Variations, Carleton University Press, Ottawa, pp. 297-314.

Beaujot, R., Maxim, P.S. and Zhao, J.Z. (1994), ‘‘Self-employment among immigrants: a test of the blocked mobility hypothesis’’, Canadian Studies in Population, Vol. 21, pp. 81-90. Bonacich, E. (1993), ‘‘The other side of ethnic entrepreneurship: a dialogue with Waldinger, Aldrich, Ward and associates’’, International Migration Review, Vol. 17, pp. 685-702. Borjas, G. (1986), ‘‘The self-employment experience of immigrants’’, The Journal of Human Resources, Vol. 21, pp. 485-506. Bun, C.K. and Hui, O.J. (1995), ‘‘The many faces of immigrant entrepreneurship’’, in Cohen, R. (Ed.), The Cambridge Survey of World Migration, Cambridge University Press, New York, NY, pp. 523-31. Collins, J., Gibson, K., Alcorso, C., Castles, S. and Tait, D. (1995), A Shop Full of Dreams: Ethnic Small Business in Australia, Pluto Press, Leichhardt. Dijst, M.J. and Van Kampen, R. (1991), ‘‘Minority business and the hidden dimension: the influence of urban contexts on the development of ethnic enterprise’’, Tijdschrift voor Economische en Sociale Geografie, Vol. 82, pp. 128-38. Feagin, J.R. and Imani, N. (1994), ‘‘Racial barriers to African entrepreneurship: an exploratory study’’, Social Problems, Vol. 41, pp. 562-84. Hiebert, D. (1999), ‘‘Local geographies of labor market segmentation: Montre´al, Toronto, and Vancouver, 1991’’, Economic Geography, Vol. 75, pp. 339-69. Kloosterman, R.C. 2000, ‘‘Immigrant entrepreneurship and the institutional context, a theoretical exploration’’, in Rath, J. (Ed.), Immigrant Businesses. The Economic, Politico-institutional and Social Environment, Macmillan Press, Houndmills, pp. 135-60. Li, P.S. (1994), ‘‘Self-employment and its economic return for visible minorities in Canada’’, in Saunders, D.M. (Ed.), New Approaches to Employee Management, Vol. 2: Discrimination in Employment, JAI Press, Stanford, pp. 181-95. Li, P.S. (1997), ‘‘Self-employment among visible minority immigrants, white immigrants, and native-born persons in secondary and tertiary industries of Canada’’, Canadian Journal of Regional Science, Vol. 20, pp. 29-48. Light, I. (1999), ‘‘Class resources’’, paper presented at the Conference on Immigrant Businesses in the (in)Formal Economy, Amsterdam, 7-9 October. Light, I. and Bonacich, E. (1988), Ethnic Entrepreneurs: Koreans in Los Angeles, 1965-1983, University of California Press, Berkeley, CA. Light, I. and Rosenstein, C. (1995), ‘‘Expanding the interaction theory of entrepreneurship’’, in Portes, A. (Ed,), The Economic Sociology of Immigration: Essays on Networks, Ethnicity and Entrepreneurship, Russell Sage Foundation, New York, NY, pp. 166-212. Lo, L., Preston, V., Wang, S., Reil, K., Harvey, E. and Siu, B. (1999), Immigrants’ Economic Status in Toronto: Rethinking Settlement and Integration Strategies, Joint Centre of Excellence for Research on Immigration and Settlement, Toronto, Working Paper No. 15. Marger, M.N. (1989), ‘‘Business strategies among East Indian entrepreneurs in Toronto: the role of groups resources and opportunity structure’’, Ethnic and Racial Studies, Vol. 12, pp. 539-63. Mata, F. and Pendakur, R. (1997), Immigration, Labour Force Integration and the Pursuit of Selfemployment, Policy Research Bureau, Multiculturalism Directorate, Department of Canadian Heritage, Ottawa. Maxim, P.S. (1992), ‘‘Immigrants, visible minorities, and self-employment’’, Demography, Vol. 29, pp. 181-98. Peck, J. (1996), Work-place, Routledge, London and New York, NY. Portes, A. and Zhou, M. (1996), ‘‘Self-employment and the earnings of immigrants’’, American Sociological Review, Vol. 61, pp. 219-30.

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Chinese entrepreneurs The Chinese Diaspora in Australia

Chinese entrepreneurs in Australia

Jock Collins School of Finance and Economics, University of Technology Sydney, Australia

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Keywords Labour market, Australia, Ethnic groups, Entrepreneurialism Abstract Recounts the history of the Chinese Diaspora in Australia, which dates back to the Gold Rush of the 1850s. In the past three decades, following the end of the white Australia policy, many ethnic Chinese immigrants have immigrated to Australia. Although there are only 300,000 people of Chinese ancestry living in Australia, Chinese immigration is a critical chapter of Australia’s immigration experience. Chinese entrepreneurs have played a major role in the history of the Chinese in Australia. Explores the experience of Chinese entrepreneurs in Australia from the earliest days till the present and reviews historical accounts of Chinese entrepreneurs in Australia, before presenting the results of recent research. Argues that it is necessary to investigate how ethnicity, gender and class have intersected to shape changing patterns of Chinese entrepreneurship in the Australian Chinese Diaspora. Suggests also that the dynamics of Chinese immigration and Chinese entrepreneurship in Australia have been shaped by the changing dynamics of globalisation, the state and the racialisation of Chinese immigrants in the Australian labour market and society as a whole.

Introduction The history of the Chinese Diaspora in Australia dates back to the Gold Rush of the 1850s. In the past three decades, following the end of the white Australia policy, many ethnic Chinese immigrants have immigrated to Australia. The number of people of Chinese ancestry living in Australia is estimated to be 300,000 by the mid-1990s (Pe-Pua et al., 1996, p. 49). This is a very small part – Chin (1988, p. 318) suggests less than 0.5 per cent – of the overseas Chinese population of some 30 million people. Despite their relatively small numbers, Chinese immigration is a critical part of Australia’s immigration history. Chinese entrepreneurs have played a major role in the history of the Chinese in Australia. This paper explores the experience of Chinese entrepreneurs in Australia from the earliest days till the present. It reviews historical accounts of Chinese entrepreneurs in Australia before presenting the results of recent research. The paper argues that it is necessary to investigate how ethnicity, gender and class have intersected to shape changing patterns of Chinese entrepreneurship in the Australian Chinese Diaspora. It also suggests that the dynamics of Chinese immigration and Chinese entrepreneurship in Australia have been shaped by the changing dynamics of globalisation, the state and the racialisation (Miles, 1982) of Chinese immigrants in the Australian labour market and society as a whole. The paper first looks at the early history of Chinese immigration in the nineteenth century and the role of Chinese entrepreneurs in that period. It then This article is part of a special issue of papers entitled ‘‘The economic context, embeddedness and immigrant entrepreneurs’’ edited by Jan Rath, Robert Kloosterman and Eran Razin.

International Journal of Entrepreneurial Behaviour & Research, Vol. 8 No. 1/2, 2002, pp. 113-133. # MCB UP Limited, 1355-2554 DOI 10.1108/13552550210423750

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presents an overview of the recent history of Chinese immigration in Australia, before presenting data on the rate of Chinese entrepreneurship from the past three Australian censuses. During this period, many Chinese entered Australia under the business migration programme. This is discussed in the next section. The paper then reviews recent Australian research into Chinese entrepreneurs before an attempt to explain different rates of entrepreneurship among different birthplace groups of Australian Chinese and some concluding remarks. Chinese entrepreneurs in Australia: the early years The racialisation of the Chinese Diaspora in Australia Early Australian immigration was predominantly British, with few nonEuropeans until the Australian gold rush of the mid-nineteenth century that was the stimulus to attract large numbers of Chinese male sojourners to the Colonies of Eastern Australia. Prior to the discovery of gold in the 1850s, Price estimated that there were less than 3,000 Chinese in Australia (Price, 1966, p. 27). A decade later, there were over 38,000 Chinese in Australia (Choi, 1975, p. 22). While the Chinese population peaked at less than 5 per cent of the population of New South Wales (NSW) and Victoria in 1861, there were times and places when the Chinese were in a majority: in the Queensland town of Cooktown the Chinese ‘‘outnumbered whites by at least two or three to one’’ (Cronin, 1975, p. 258), while in the 1880s McQueen (1970, p. 49) notes that ‘‘every second man in town was Chinese’’. The response to the Chinese by the ‘‘host’’ society was mainly one of prejudice, hatred and hostility. Anti-Chinese riots occurred on many goldfields, resulting in incidents where Chinese were killed and injured (McQueen, 1970, p. 44-5; Markus, 1979, p. 137). Newspapers of the day were full of racist references to – and caricatured depiction of – the Chinese for their dress, eating habits, health, religion, culture, opium smoking and sexual predilections (Cronin, 1975). This racism directed towards Chinese immigrants had its roots in the earlier racist ideologies and practises against the Aboriginal peoples (de Lepervanche and Bottomley, 1988), just as late twentieth century racism against Asians in Australia had its roots in these events more than 100 years ago. ‘‘Colour’’ was a key signifier of racial difference. A hierarchy of racial stereotypes emerged in the nineteenth century Australian labour market. In Queensland, Chinese were paid about 20 pounds per year, which was 22 pounds less than Europeans were paid but more than the 4 pounds paid to Melanesians. Aboriginals did not even get a wage: they were paid in rations of flour, sugar and tobacco (Cronin, 1975, pp. 241-5). The first immigration legislation in Australia was an explicitly racist response to Chinese immigrants. Widespread mobilisation of antiChinese groups – including the trade unions (Collins, 1988b) – successfully agitated for legislation to restrict Chinese immigration. With outright exclusion not possible, due to British opposition, authorities in Victoria, NSW and later Queensland introduced legislation to restrict Chinese entry (Markus, 1979, 1994; Price, 1974). The trade union movement joined in anti-Chinese actions, with the Melbourne Trades Hall Council refusing to grant affiliation to the Chinese

Workers Union (McQueen, 1970, p. 50). As a consequence, many avenues of Chinese work were denied Chinese immigrants, who had switched from mining to entrepreneurs in agricultural and pastoral pursuits as general labourers or station hands. Others Australia took the road to self-employment as market gardeners or shop owners. In these circumstances, Chinese immigrants found it difficult to find work, and selfemployment or a small business were the only available avenues for a 115 reasonable (or any) income. As Wang (1988, p. 300) put it: ‘‘As gold became exhausted, more Chinese moved to country towns and capital cities to set up small businesses as grocers, hawkers of vegetables, fruit and other goods’’. At Federation in 1901 the new Australian nation had, as its strongest foundation, a racist immigration policy built on entrenched anti-Asian and antiAboriginal attitudes and practises. The ‘‘white Australia policy’’, as the 1901 Immigration Restriction Bill was popularly called, was introduced with an unusual degree of unanimity across the spectrum of politics and among all classes (Yarwood, 1968, p. 73). Debate at the time centred not on the appropriateness of the white Australia policy but on the methods by which non-white exclusion was to be achieved. The infamous ‘‘dictation test’’ was introduced as a method of exclusion: any person who failed to pass a dictation test in any European language could be declared a prohibited immigrant. The intention of the Act was clear: non-whites would be excluded. The white Australia policy lived up to the expectations of its supporters. The number of ‘‘full Chinese’’ fell from just under 30,000 in 1901 to 9,000 Chinese in 1947 (Choi, 1975, p. 27). Those Chinese who stayed in Australia faced racial discrimination and thus found it hard to get jobs as wage labourers. Many moved into entrepreneurship, particularly market gardens, food and furniture niche markets. This move was critical not only to the survival of the families of Chinese entrepreneurs themselves, but also to the economic survival of those Chinese who remained. Chinese entrepreneurship in early Australia By 1901 there were 799 Chinese shopkeepers and grocers in New South Wales. Half of these were in the Sydney area, many as greengrocers: one-third of the Chinese in Victoria and NSW worked in market gardens (Choi, 1975, p. 29). Market gardens became the base for later expansion into independent employment in fruit and vegetable distribution, in grocer shops and cafe´s, as general dealers, hawkers and importers (Choi, 1975, p. 33). Other Chinese moved into the laundry business or opened small furniture shops. Chinese furniture factory ownership reached a peak in 1912 when the Chinese owned 168 factories (31 per cent of the total number) and employed 818 workers (28 per cent of the furniture trade’s workforce) (Yuan, 1988, p. 305). ‘‘Chinatown’’ areas developed in the Haymarket-Dixon Street area of Sydney (Collins and Castillo, 1998, pp. 278-89; Fitzgerald, 1997) and the east end of Little Bourke Street in Melbourne (Collins et al., forthcoming). Today these areas are the nucleus of modern Chinatowns, with Australia’s other major cities such as Adelaide, Perth and Brisbane also boasting a ‘‘Chinatown’’. Chinese

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entrepreneurs are also prominent in suburban business precincts such as Cabramatta in Sydney and Richmond in Melbourne (Burnley, 1986, 1995). In 1901 one half of the occupied Chinese in Victoria were primary producers, although this was already dropping by 1911 with a movement into commerce and industry. Chinese immigrants in Melbourne also established a niche in the laundry business: by 1913 the Chinese made up a third of all laundries in Melbourne. Despite official and popular anti-Chinese racism there were some Chinese who worked and prospered in Melbourne in the first decades of the twentieth century. Louis Ah Muoy was a successful gold miner, merchant and entrepreneur, as was Long Kong Meng. Ah Muoy was also a founding director of the Commercial Bank of Australia and an early spokesperson for the Chinese community. Prominent Chinese Melbournian barrister William Ah Ket was sent by the Melbourne Chinese Chamber of Commerce to represent the Australian Chinese at the opening of the first Chinese Parliament in Beijing in December 1912. Businessman John Egge plied the trade routes of the MurrayDarling-Murrumbidgee Rivers, engaging in business in New South Wales, South Australia and Victoria. Members of his family prospered in Mildura and Echuca, as did farmer Thomas Coto, who fought for fair wages for his agricultural workers in the Maffra/Sale areas of Gippsland in Victoria’s East. It was reported that Coto ran a cheese factory during the 1880s at a loss just to provide employment for locals. The Tim Young, Louey Pang, Hock Yick and Wing Young families were prominent successful banana and tomato distributors in Melbourne (Collins et al., forthcoming). But the Chinese immigrants in Australia were not just workers or businessmen: there were 40 Chinese doctors in Victoria, for example, in these pre-1945 decades. Others were prominent in the church. Reverend Cheong Cheok Hong, for example, was initially director of the Presbyterian Chinese Mission in Melbourne and later directed the Chinese Mission of the Church of England where he raised funds to build the Church of England Hall in Little Bourke Street (Collins et al., forthcoming). The racialisation of Chinese entrepreneurs While Chinese entrepreneurs might have moved into entrepreneurship because racial discrimination blocked their opportunities elsewhere, they did not escape racial discrimination when they became entrepreneurs. These Chinese entrepreneurs in NSW, Victoria and the other colonies/states were hampered by discriminatory legislation. For example, Chinese furniture makers and laundry keepers were not permitted to sponsor Chinese migrants to help in their business, so that they had trouble in finding sufficient labour. In addition, the Factories and Shops Act (NSW 1896, Victoria 1896) defined any workshop employing one or more Chinese person as a factory, whereas four Europeans were required for a ‘‘factory’’ to exist. This meant that all small Chinese workshops fell under industrial regulations concerning wages, conditions of work and limited hours of opening. Moreover, all Chinese-made furniture was

to be stamped with the words ‘‘Chinese labour’’ (Yuan, 1988, p. 305). This was Chinese the beginning of the end of the Chinese cabinet and laundry businesses. entrepreneurs in Employment of Chinese-born immigrants in the NSW and Victorian cabinet Australia making industry peaked in 1912 and had fallen another half by the year 1920 (Markus, 1994). The Chinese laundry is a common entrepreneurial experience of the Chinese Diaspora in the USA, Canada and other places of Chinese 117 immigration (Li, 1988). While Chinese immigrants in Australia also established laundries they were almost non-existent in Australia by the Second World War (Choi, 1975). The literature on ethnic entrepreneurship gives great significance to ethnic niche markets as a seedbed of ethnic entrepreneurship (Waldinger et al., 1990; Bonacich and Modell, 1980; Light and Gold, 2000, pp. 9-15). Unlike the furniture and laundry businesses, which competed strongly with other businesses, the Chinese market gardeners found a niche that did not threaten others and did not attract discriminatory legislation. Chinese market gardens thrived as immigration regulations allowed assistants and ‘‘substitutes’’ to enter and work in the gardens. Large wholesale fruit and vegetable distributing firms were established in NSW and Victoria between the years 1910-1920 and, according to Choi (1975, p. 53), ‘‘almost monopolised the business at that time’’. Similarly, Chinese small-scale fruit and vegetable stalls became a major part of fruit and vegetable distribution, acting as a link between the Chinese wholesalers and the public. Chinese market gardens and vegetable and fruit businesses continued into the post-war period, although the number of Chinese in Australia fell to 10,000 in 1947, nearly half of whom had been born in Australia, the result of a ‘‘successful’’ white Australia policy. Chinese immigrants also had an impact as landowners, banana farmers and gardeners in rural areas, including Cairns in Northern Queensland. Reviewing the relationship between immigration, business and commerce, Glezer (1988, p. 860) argues that all immigrants were not equally welcomed by the established business community, noting the existence of: . . . institutional measures designed to dissuade unwanted outsiders from penetrating the positions of the entrenched business groups . . . One consequence of such arrangements was to largely confine non-Anglo-Celtic business people to the periphery of the business system.

Hence Irish Catholics, Chinese, Lebanese and Jews were restricted in their access to business opportunities (Collins et al., 1995). This demonstrates the pivotal role of racialisation in shaping the ethnic entrepreneurship experience in Australia Glezer’s views support the notion that immigrants faced ‘‘blocked mobility’’ as employees and, when they made the shift, as business-owners. The movement of the Chinese and many other immigrants such as Italians, Greeks and Lebanese into restaurants, Glezer (1988, p. 861) argues: . . . was not usually a preferred choice, but a consequence of limited options . . . The tendency of some ethnic groups to have a proportionately larger presence in small business than British migrants and the majority population has often been as much the product of constraints and limitations as of their preferences, skills and cultural assets.

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Chinese entrepreneurs in Australia: the past 25 years The Chinese Diaspora in Australia today It is difficult to conduct research into the ethnic Chinese Diaspora in Australia because national census data are based on birthplace rather than ethnicity. The 1986 Australian census, the only to include a question on ancestry, reported that 196,310 people, or 1.21 per cent of the Australian population, were of Chinese ethnic origin (Price, 1988, p. 124). For the first 50 years of Chinese settlement in Australia, almost all Chinese who were born overseas were born in China. But the Chinese Diaspora in Australia today includes many ethnic Chinese who were born in Vietnam, Malaysia, Hong Kong, Singapore and Taiwan as well as those born in China (Ho and Coughlan, 1997, p. 120). For example, one-third (34.1 per cent) of the Vietnamese-born in Australia in 1986 reported that they were of Chinese ancestry (Thomas, 1997, p. 284). Moreover, only three-quarters (76.2 per cent) of those who were born in the People’s Republic of China were of Chinese ancestry. The 1986 census also showed that 93.3 per cent of those born in Taiwan were ethnic Chinese, as were 84.6 per cent of those born in Hong Kong and Macau, 61 per cent of those born in EastTimor, and 60.6 per cent of those born in Malaysia and Brunei. In addition, 42.7 per cent of those born in Singapore, 40.7 per cent of those born in Cambodia and 27.4 per cent of those born in Indonesia claimed Chinese ancestry (Ho and Coughlan, 1997, p. 123). The key feature, then, of the Chinese Diaspora in Australia is its diversity: Australia’s ethnic Chinese come from a range of regional, religious and social class backgrounds. Today’s Chinese Diaspora in Australia includes the undocumented Chinese dishwasher from the PRC to a millionaire ethnic Chinese businessman from Hong Kong, Malaysia or Indonesia. In between, Australia’s ethnic Chinese community exhibits a diversity of religious, cultural and socio-economic profiles. They also have very different immigration experiences. Ethnic Chinese from Indo-China generally arrived as refugees or family migrants in the 1970s and early 1980s (Collins, 1991, pp. 60-72; Vivianni, 1984). Many of those born in South East Asian countries arrived in Australia under family migrant categories, while those from North East Asia are more recent migrants and are more likely to arrive under skilled/professional or business categories. In the 15 years since the 1986 census, the immigration of ethnic Chinese to Australia has increased dramatically. The main source countries of Australia’s ethnic Chinese people have regularly featured among the ‘‘top ten’’ countries of Australian immigration (Coughlan and McNamara, 1997; Castles et al., 1998; Collins, 2000). But the absence of an ethnicity or ancestry question in Australian census data means that it is difficult to measure accurately how big Australia’s Chinese Diaspora is today or to assess precisely their changing socio-economic characteristics. The 2001 census, just completed, will also include an ethnicity/ancestry question.

Chinese entrepreneurs in Australia in the 1990s Chinese Immediately after the Second World War, Chinese immigrants continued their entrepreneurs in earlier presence in the vegetable and fruit retailing business. However, new Australia immigrants, particularly Italians, also moved into this area of business (Collins et al., 1995). The Chinese responded to this challenge with flexibility: many turned their business activities to running cafe´s and restaurants all over the 119 metropolitan and rural areas across the nation. By the mid-1980s, Chinese cafe´s were a feature of the Australian suburban and country town landscape. There were 7,000 cafe´s operated by Chinese in NSW. In the nation’s capital, Canberra, there were 6,080 Chinese cafe´s, 200 in Melbourne and 300 in Sydney. In Adelaide one-eighth of the Chinese population were employed in Chinese cafe´s (Chin, 1988). Census data allow an investigation into different rates of entrepreneurship among different birthplace groups in Australia. Table I lists the entrepreneurship rates for males in the 1986, 1991 and 1996 census for the main countries of origin of Australia’s Chinese immigrants. Table II lists the same data for females. These data show that immigrants born in Taiwan have by far the highest rate of entrepreneurship in Australia, while those born in Hong Kong also have a higher rate of entrepreneurship compared to those born in Australia. But other source countries of Australia’s Chinese immigrants – such as Vietnam, PRC, Indonesia, Malaysia, Singapore – have similar or lower rates of entrepreneurship compared to those born in Australia (Collins et al., 1995).

Category Self-employed Employer Percentage of entrepreneursa

Malaysia and Hong Kong Brunei 9.2 11.0 20.2

Notes: a Entrepreneurs determined by employed to those that are employers Source: Ho and Coughlan (1997, p. 151,

Category Self-employed Employer Percentage of entrepreneurs

Singapore

Taiwan

Table I. Male entrepreneursa in 7.4 8.8 9.4 22.4 Australia, by birthplace 9.1 9.0 8.6 17.6 of the main countries 16.5 17.8 18.0 40.0 of origin of Australia’s Chinese immigrants, adding proportion in labour force that are self1991 national census (% of those in the Table 6.16) labour force)

Malaysia and Hong Kong Brunei 7.2 7.6 14.8

People’s Republic of China

5.0 4.0 9.0

Source: Ho and Coughlan (1997, p. 151, Table 6.16)

People’s Republic of China

Singapore

Taiwan

8.6 6.4 15

6.7 4.3 11

19.0 9.3 28.3

Table II. Female entrepreneurs in Australia, by birthplace of the main countries of origin of Australia’s Chinese immigrants, 1991 national census (% of those in the labour force)

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The important point to note is that rates of entrepreneurship for ethnic Chinese immigrants vary considerably, casting doubt on culturalist explanations (the Chinese are good at business) of ethnic entrepreneurship. Moreover, Table II reminds us of the importance of female ethnic entrepreneurship among ethnic Chinese and other immigrant groups. Females comprise about one in four of Australia’s entrepreneurs, and are growing at a faster rate than male entrepreneurs (Roofey et al., 1996). Business migration and Chinese entrepreneurs in Australia A new path for wealthy ethnic Chinese immigrants to Australia and other western countries like Canada (Wong, 1993; Wong and Netting, 1992) and the USA in recent decades has emerged in the last two decades, following the introduction of a business migration category (Collins et al., 1995, p. 37). Business migrants to Australia arrive as experienced entrepreneurs with large amounts of capital ready to make their mark on the national and international markets. Their trajectory to ethnic enterprise is therefore much different from that of the traditional path of ethnic Chinese from wage labourer to entrepreneur. Introduced in 1976 by the conservative Fraser Government (1975-1983), the Business Migration Program (BMP) aimed to ‘‘provide for the admission of people with expertise and capital to establish worthwhile enterprises in Australia’’ (DIEA, 1980, p. 45). In order to qualify, business migrant applicants had to demonstrate a successful business record, have substantial assets that could be transferred to Australia and intend to settle permanently in Australia. The amount of capital required for business purposes varied from $350,000 for an applicant under 40 years of age to $850,000 for someone aged 58 and over. They had to satisfy immigration officials that they would be able to establish a business in Australia (Borowski, 1992, p. 2). In the decade following the introduction of the BMP over 11,000 business migrants and about 50,000 of their dependent family members arrived in Australia. After 1986, the numbers entering under the BMP increased markedly. The business migration intake grew steadily over this decade, peaking in 1988-1989, when 2,637 principal applicants were granted visas. Intakes then fell dramatically in the 1990s. During the 1980s, Asian countries became increasingly important among Australia’s business migrants. In 1982-1983, 25 per cent of business migrants were Asian; but by 1991-1992 Asians accounted for 93 per cent of the business migrant entrants. Over the period 1982 to 1990, the major source countries for business migrant entrants were Hong Kong (32 per cent), Taiwan (15 per cent), Malaysia (12 per cent), the UK (8 per cent), Indonesia (6 per cent) and Singapore (5 per cent) (The Parliament of the Commonwealth of Australia, 1991, p. 30). In 1990-1991, Hong Kong, China and Taiwan accounted for more than two-thirds of the total business migrant intake (Kee et al., 1993, p. 7). In August 1991 a report found that 45 per cent of business migrants had established businesses by one year after arrival and that 61 per cent had done so after two years, with

less than one-third of these businesses claiming that they were export oriented. Chinese The average employment generated was six persons per business, while half of entrepreneurs in the businesses were established in the services industry (DILGEA, 1991a, b). Australia These ethnic Chinese business migrants have been tagged with the term ‘‘astronauts’’ because they spend most of their time in the air flying between their homes in Australia and Asia on business matters (Pe Pua et al., 1996). 121 Some have questioned the authenticity of these business migrants, accusing them of abusing the system and never intending to settle permanently in Australia in the first place (Ellingsen, 1990). Skeldon (1992) has argued that business migrants from Hong Kong saw the Australian business migration programme as some sort of ‘‘insurance’’ or alternative before or after Hong Kong returned to Chinese control in 1997. A longitudinal survey of Australian immigrants, conducted by the Australian Bureau of Population and Immigration Research (BIPR) in 1992, included a sample of 798 visaed arrivals who were interviewed within six months of their arrival in Australia. Of these, 13.7 per cent had returned to their home temporarily. The bulk of these were ethnic Chinese business migrants from Hong Kong, Taiwan and Malaysia (Hugo, 1994, p. 70). Another study (Pe Pua et al., 1996) found that Hong Kong business migrants mainly operated businesses involving trading (import-export) across a range of goods. For example, one Hong Kong astronaut exported seafood to Hong Kong, while others imported garments and textiles and toys made in China. Other Hong Kong astronauts ran retail outlets, restaurants, manufacturing firms (textiles, clothing, leather, jewellery, toys, electronic parts, electrical appliances) and travel agencies. All of these business migrants were continuing to run their business activities in Hong Kong, China and Taiwan. Most had returned to Hong Kong to run their businesses (Pe-Pua et al., 1996, pp. 43, 47). Recent surveys of Chinese entrepreneurs in Australia There have been a number of important Australian studies that provide insight into Chinese entrepreneurs in Australia. Lever-Tracy et al. (1991) surveyed 104 Chinese and 40 Indian entrepreneurs with businesses in retail trade (including take-away food shops), restaurants, wholesale trade, property and business services and health in Brisbane and Sydney in the late 1980s. Collins and various colleagues conducted three surveys of ethnic entrepreneurs – including Chinese entrepreneurs – in Australia. The Sydney survey of 280 (mainly immigrant) entrepreneurs, including 32 Chinese males and ten Chinese females, in Sydney was conducted in two stages: 1988-1989 and 1991-1992 (Collins et al., 1995). A second survey by Collins et al. – called the 1996 National Survey – covered 307 entrepreneurs (114 self-employed and 193 employers) in Sydney, Melbourne and Perth (Collins et al., 1997). The survey included 37 Chinese entrepreneurs. These surveys of Chinese entrepreneurs in Australia provide a wealth of comparative data about Chinese entrepreneurs from Australia. They enable an insight into the background of these entrepreneurs and the role of the family

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and co-ethnic custom in Chinese enterprises. They also provide information into financial and employment dynamics, an insight into international trading activities and other global Diasporic links. In this section I summarise some of the key features of contemporary Chinese entrepreneurs in Australia that emerge from this Australian research.

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The family plays a major role in most Chinese business enterprises in Australia The 1996 national survey found that the majority of Chinese entrepreneurs – like most entrepreneurs – in Australia are married (80 per cent in immigrant businesses; 68 per cent in non-immigrant businesses). The family was found to be a critical resource for Chinese entrepreneurs in Australia (Collins et al., 1997). In 60 per cent of businesses owned by Chinese women more than three-quarters of employees in the business were family members (Collins, 1998a, pp. 404-5), while family members were prominent in businesses run by Chinese male entrepreneurs. Data from the national survey found that two in three Chinese entrepreneurs reported that they used the family or community networks as sources of employment recruitment, a rate exceeded only by entrepreneurs born in the Middle East (Collins, 1998a, p. 390). This is, of course, linked to trust. The research by Lever-Tracy et al. (1991) also highlighted the importance of the family to Chinese entrepreneurs in Australia. They found that 80 per cent of the Brisbane entrepreneurs surveyed used family labour, including spouses, children and other extended family members. Family members were regarded as being trustworthy and committed to the business. Another aspect of the role of family and community networks for Chinese entrepreneurs in Australia relates to finance. Raising start-up capital is a critical barrier to ethnic entrepreneurship. The family is an important source of finance and business advice. In the Sydney survey, two-thirds of male Chinese entrepreneurs relied mainly on family and friends as a source of finance, as did 80 per cent of female Chinese entrepreneurs. Among Vietnamese-born entrepreneurs community networks played a major role in finance through the rotating credit system or hui, a feature also observed among Chinese and other immigrants in other countries (Collins et al., 1995, pp. 31-2, 159-60). In the national survey, about one in five Chinese male and female entrepreneurs used the family as the main source of finance (Collins, 1998a, p. 351). The Chinese Diaporic community in Australia and overseas is an important source of support for Chinese entrepreneurs in Australia The social networks of ethnic entrepreneurs – in this case the overseas Chinese networks – have been seen by researchers in many countries as a critical part of the entrepreneurial activities of immigrants (Waldinger et al., 1990; Light and Rosenstein, 1995; Light and Gold, 2000). One dimension of the insertion of Chinese entrepreneurs in Australia into Chinese networks relates to the importance of the co-ethnic market – a proxy for the importance of the ethnic enclave. Lever-Tracy et al. (1991, p. 113) found that the extent of co-ethnic custom varied across both cities and ethnic groups. The Chinese small

business community, especially in Sydney, was found to rely more on Chinese Chinese customers than did the Indian small businesses surveyed. The Sydney survey entrepreneurs in also inquired in to the importance of the co-ethnic market. It found that one in Australia three of the immigrant entrepreneurs surveyed stated that more than half of their customers were co-ethnic, but another 40 per cent replied that co-ethnic custom accounted for only 10 per cent of custom. Clearly while some ethnic 123 entrepreneurs in Australia are dependent on the ethnic niche, many others have broken out to serve mainly the mainstream market (Collins et al., 1995, pp. 153-5). In this way, Chinese entrepreneurs in Australia – like many other ethnic entrepreneurs (Collins et al., 1995) – are minimising what Light and Rosenstein (1995, pp. 21-2) call transactions cost, giving ethnic enterprises an economic advantage over firms without such social networks of employees to draw on. Chinese entrepreneurs appear to be successful in Australia Business success is difficult to measure, with profitability one important dimension. All of the Chinese entrepreneurs in the Sydney survey (Collins et al., 1995, pp. 184-8) reported that their business was profitable. No other group of ethnic entrepreneurs made this claim. Business survival is another measure of business success. Chinese-born entrepreneurs were the least likely of all groups of ethnic entrepreneurs surveyed in the national survey to have been in their current business for more than ten years (Collins, 1998a, p. 377). This is because the majority of Chinese in Australia have arrived in the past ten years. Lever-Tracy et al. (1991, p. 113) also concluded that the businesses studied were ‘‘successful, innovative and export oriented’’. The survey found that many had prior business experience and came to Australia with substantial resources. Half had expected to set up a business when they arrived. The study reported that both the Chinese and Indian business owners surveyed had to confront ‘‘a residue of prejudice and discrimination and a battery of obstacles to the recognition of overseas qualifications’’ during the process of applying to emigrate to Australia (Lever-Tracy et al., 1991, p. ix). Another dimension of business activity is new business formation. Two out of every three Chinese entrepreneurs in the national survey had established new business rather than taken over an existing one. This was far greater than other birthplace groups of ethnic entrepreneurs (Collins, 1998a, pp. 385-7). About 90 per cent of Chinese entrepreneurs responded in the national survey that they thought that they were better off as entrepreneurs than working for wages, a figure comparable to other groups of ethnic entrepreneurs surveyed (Collins, 1998a, pp. 362-7). On the other hand, when asked ‘‘If you had your time over again would you migrate to Australia’’, more Chinese male and female entrepreneurs answered in the negative than any other groups of ethnic entrepreneurs (Collins, 1998a, pp. 385-7).

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Import and export activities linked to Diasporic networks appear to be more significant among Chinese entrepreneurs than other immigrant entrepreneurs in Australia today There is evidence of Chinese entrepreneurs engaging in trading activities at a greater rate than other ethnic entrepreneurs in Australia. Stromback and Malhotra (1994) highlighted the entrepreneurial advantages of Asian (mainly Chinese) immigrants because of their ‘‘cultural baggage’’ and motivation. They emphasised the importance of these overseas networks of ethnic entrepreneurs in Australia: ‘‘links with relatives or friends in the country of origin were often used to provide a reliable source of supply, access to a marker, advice about market prospects and to secure credit. In some cases the links had developed into formal arrangements, such as a partnership with a relative’’. Similarly, Lever-Tracey et al. (1991, p. 113) concluded that Chinese and Indian entrepreneurs were on the whole ‘‘successful, innovative and export orientated’’ entrepreneurs who had considerable overseas resources, including financial resources and business networks, which provided an advantage when establishing import/export activities because they provided ‘‘personalised, trust-based networks which extended into the community and beyond, into mainstream society and overseas’’ (Lever-Tracey et al., 1991, p. xi). Two-fifths of Chinese and Indian exporters were primarily go-betweens for Australian sellers and overseas. While such international or global ethnic networks are not confined to ethnic Chinese entrepreneurs, more has been written about Chinese networks than any other ethnic group. Writing about global Chinese networks, Kraar (1994, p. 2) stresses the business advantages of the co-operative overseas Chinese network: Spurred by distinctive business culture that relies on constant scanning for opportunities and an incomparable co-operative Web, they are fast establishing themselves as nothing less than the worlds most vigorous capitalists . . . the best way to get something done [in Asia] is to plug into the overseas Chinese network.

But as Kee (1994, p. 12) argued, the recognition in Australia of the importance of Chinese business networks has only recently been recognised. Kao (quoted in Kee, 1994, p. 11) calls this network the ‘‘Chinese commonwealth’’ and outlines the economic advantages that such a network confers on ethnic Chinese entrepreneurs in countries like Australia: Access to local resources such as information, business and political networks, raw materials, low-cost labour, information, and knowledge about business practices and markets in a variety of environments. This emerging Chinese network is an interconnected yet potentially open system. It provides a new market mechanism for conducting global business. Key elements of this successful network include the blending of Chinese values and Western practices that encourage flexibility, innovation and assimilation of outsiders.

Class mobility For many immigrant entrepreneurs, including the ethnic Chinese, business ownership was a leap in a new direction in Australia – a transformation of class

location – rather than continuity of the class location that they experienced in Chinese their family. As Table III shows, only about one in ten of the Asian (including entrepreneurs in South Asian entrepreneurs) reported in the 1996 national survey that they had Australia come from a family business (middle class or petit bourgeoisie) background, while others were from a working class or peasant background. Business migrants, the new strain of immigrant entrepreneurs, are multi-millionaires 125 before emigration. Paths to entrepreneurship Globalisation impacts on formal and informal immigration processes to shape the many paths to entrepreneurship for ethnic Chinese and other immigrant entrepreneurs in Australia. There are many paths to immigrant entrepreneurship for ethnic Chinese immigrants in Australia today. Some came as refugees, some as family migrants from peasant or unskilled backgrounds, others as educated professionals, others as business migrant millionaires, while others are undocumented immigrants who live in a shadow world. Some come to entrepreneurship through unemployment or retrenchment (Collins, 1998b), while others are escaping the constraints of the glass or accent ceiling (Collins, 1996a). The diversity in paths to entrepreneurship is confirmed from data in the 1996 national survey which showed that nearly one-third of Asian entrepreneurs (mainly ethnic Chinese) surveyed were refugees, while a similar number – about one in three of the entrepreneurs surveyed – arrived under the family reunion programme (see Table IV). These refugee entrepreneurs would have different ethnic and class resources (Light and Rosenstein, 1995; Light Region of birthplace Latin America Europe Middle East Asia ESB/Australia

n

Male

Female

19 68 42 19 121

12.5 6.9 3.6 9.6 2.4

5.9 4.4 0 12.0 3.8

Table III. Proportion of entrepreneurs who had reported a family business background

Source: National Survey

Family Reunion Refugee Refugee

Males Females Males Females

Source: National Survey

European

Asian

Latin American

Middle East

42.9 53.8 14.3 7.7

28.8 36.6 22.5 29.3

45.5 25.0 9.1 37.5

79.3 84.6 0 0

Table IV. NESB entrepreneurs who came to Australia under the family reunion category

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and Gold, 2000, pp. 105-29) than, say, Chinese professionals from Hong Kong, Taiwan, Malaysia or Singapore who arrive in Australia today. Entrepreneurial strategies It is difficult to support the notion that there is an ethnic Chinese business strategy (Waldinger et al., 1990) evident from the Australian experience. There is great diversity between Chinese entrepreneurs of different birthplace, class, religion and cultural group. Class, ethnicity and gender intersect in different ways to shape patterns of Chinese entrepreneurship in Australia, just as they do for other ethnic groups (Collins et al., 1995). One expression of these differences is that different groups of ethnic Chinese in Australia have different kinds of class and ethnic resources. But these resources do not happen in a vacuum. In all cases, ethnic Chinese experiences in Australia are filtered through the (changing) lens of racialisation. But even here the emphasis is on the differences – on racisms, not racism, singular, homogenous, undifferentiated – and on changes to, and contradictions of, the processes of racialisation (Castles, 1996). In all cases, ethnicity, class and gender interact in complex ways to shape the lives of Chinese entrepreneurs in Australia (Collins, 1996a). Gender and entrepreneurship Ethnic Chinese women are becoming increasingly important as entrepreneurs in their own right. This is part of a wider trend evident in Australia: females run one in three Australian business enterprises, while between 40 and 50 per cent of female entrepreneurs in Australia are first or second generation immigrants. Ethnic Chinese women are at the vanguard of the relatively large growth of female entrepreneurship in Australia. Moreover, women play a critical role in the business and family life of most male immigrant entrepreneurs. Chinese female entrepreneurs in Australia require further study and attention. Moreover, most businesses run by male entrepreneurs are in fact family businesses where the wife plays a very important role in the business as well as the family (Collins et al., 1995). To understand Chinese immigrants’ entrepreneurship in Australia we must therefore emphasise the importance of gender and the family. Explaining diverse rates of entrepreneurship among different birthplace groupings of Chinese in Australia Theories of immigrant entrepreneurship must explain diverse, uneven and changing patterns of Chinese entrepreneurship such as those evident in Australia (Collins et al., 1995). In order to do this, it is necessary to inquire much deeper than so-called common ‘‘pro-business’’ cultural traits. A more complex process is required. Following Waldinger et al. (1990) we need to investigate the changing group characteristics of different cohorts of Chinese immigrants over time and how the opportunity structures have changed for different cohorts of Chinese immigrants. We also need to investigate what ethnic resources and

what class resources they have at their disposal in Australia (Light and Chinese Rosenstein, 1995). entrepreneurs in The Australia data presented above suggest that rates of entrepreneurship Australia vary considerably among different groups within the Australian Chinese Diaspora. Some birthplaces with a high ethnic Chinese content have low rates of entrepreneurship (those born in Singapore, Malaysia, Hong Kong), others 127 have rates similar to those born in Australia (those born in the PRC and Vietnam), while still others demonstrate high rates of entrepreneurship (those born in Taiwan). This finding undermines any theory of ethnic entrepreneurship that reduces such a complex phenomenon to some common homogenous Chinese cultural trait of entrepreneurship (Collins et al., 1995, pp. 19-23). Clearly other factors are involved. Different cohorts of ethnic Chinese immigrants in Australia have different pre-migration histories and have possessed different class (including education) and ethnic resources. The 1970s saw the end of the white Australia policy and the beginning of large-scale immigration of ethnic Chinese refugees. They arrived at a time of global restructuring and the demise of the Australian manufacturing industry, particularly the clothing, footwear and textiles industry (Fagan and Webber, 1994). Their class resources were minimal and generally not recognised in Australia. The jobs that they would be expected to take were shrinking. They had the will to move into entrepreneurship, but not the means. The Vietnamese-born have had unemployment rates three to five times the Australian average for over two decades (Collins, 1998b). In other words, the opportunity structures for these unskilled and semi-skilled ethnic Chinese with poor English language skills were not favourably disposed to allowing sufficient start-up capital for a business to be raised. Their problem is not so much one of being trapped in the secondary labour market as it is of getting a job in the shrinking secondary labour market. Blocked mobility plays a role in their relative (lack of) entrepreneurship. On the other hand, those ethnic Chinese who were also under-represented as entrepreneurs – those born in Singapore, Malaysia, Hong Kong – come from immigration cohorts of highly skilled and educated professionals (BIPR, 1994a, b, c). For this cohort of the 1980s and 1990s, the barriers to their entry into the high paid jobs in the primary labour market in Australia have been broken down. In the absence of blocked mobility, these ethnic Chinese entrepreneurs get good corporate jobs and do not need to consider the entrepreneurial alternative – at least not until the glass/accent ceiling (Collins, 1996a) stops their progress up the professional job ladder. Of course, at the same time many ethnic Chinese from these countries have entered Australia as entrepreneurs under the business migration programme. But these ethnic Chinese entrepreneurs in the Australian Diaspora are very different from the marginal entrepreneur in the Chinese/Vietnamese restaurant or small grocery shop. They come with cash, business experience and, at least formally, a commitment to set up a business in Australia and create jobs. Many ethnic Chinese professionals – particularly those who get Australian medical, dentistry, law

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and pharmacy degrees – are also entrepreneurs in the sense that they hire employees for their professional business. But this is a very different path to entrepreneurship than Indo-Chinese refugees took in the mid-1970s. In other words, ethnicity, class and gender combine in different ways for different cohorts of ethnic Chinese arriving in Australia, sometimes blocking wage-labour advancement, sometimes opening up good wage-labour jobs. Group characteristics of ethnic Chinese change over time as Australian immigration policy changes. Moreover, changing patterns of racialisation shape the opportunities for Chinese immigrants once in Australia. This then changes the class and ethnic resources that they could draw on if a move to establish a business enterprise were considered. In other words, changing patterns of globalisation and radicalisation and changing decisions by the Australian state shape just who among the world’s large ethnic Chinese population gets accepted into Australia, and what happens to them when the do get selected. These factors explain more about the characteristics of the ethnic Chinese entrepreneurial experience in the Australian Diaspora than any reified notion of Chinese ‘‘culture’’ does, although ethnic resources continue to be a significant part of the story of Chinese entrepreneurship in contemporary Australian society. Conclusion It is clear that the experience of the Chinese entrepreneur in Australia is a (changing) racialised experience. The history of Australian Chinese immigrant entrepreneurs is shaped by racist immigration policies and racist policies and practices at all levels of Australian society. In this respect, the Australian story of Chinese entrepreneurs in the Australian Diaspora is very similar to that of Chinese entrepreneurs in Canada (Li, 1988, 1992; Collins and Henry, 1994) and the USA (Li, 1976; Zhou, 1992). It is also evident that the state has also played a critical role in shaping the factors that lay behind Chinese entrepreneurship in many ways. Changes to Australian immigration policy, citizenship policy and settlement policy over the past century have influenced the size and character of Chinese immigration to Australia over the past century. The racist immigration policy of exclusion and the discriminatory laws and practices shaped the character of Chinese immigration to Australia in the first threequarters of the twentieth century. But the contradictions of this racist policy began to emerge, principally because such a policy constrained the internationalisation of the Australian economy in general and its enmeshment with the Asian region in particular (Collins, 1996b). For the last quarter of the twentieth century Australia turned to a non-discriminatory immigration policy and to a settlement policy of multiculturalism. This in turn has impacted on the size and character of new Chinese immigration to Australia, and on the opportunity structures they face in the labour market and in the Australian community. But the state shapes the contours impacting on Chinese entrepreneurship in more indirect ways. Australian governments of both Labour and Conservative

persuasions in the past two decades have enthusiastically embraced economic Chinese rationalism and globalisation. Deregulation of the financial system, the entrepreneurs in exchange rate and many sections of the economy resulted. These policies have Australia led to fundamental changes to the Australian economy, particularly the decline of manufacturing and the growth of finance, telecommunications and media, expecially in global cities such as Sydney (Collins, 2001). This in turn has led to 129 changes in immigration policy, which has been fine-tuned to reap economic benefits. As a result today’s Chinese immigrants in Australia are very different from those of a century ago, or even two decades ago. A number of ethnic Chinese in Australia, as in other countries like the USA (Saxenian, 1999), are moving into professional and managerial jobs, including those in the telecommunication, personal computer, finance, business services and Internet industries. These new Chinese immigrants are very different from the male sojourners of a century and a half ago. These new Chinese immigrants have class resources that enable them to access well-paid jobs in the primary labour market. They do not face the overt discrimination of their forebears. If they do set up businesses, they are likely to be in professional areas such as finance and IT and unlikely to be in restaurants. Their ethnic resources may help them to find a job, but are relatively less important. At the same time an increasing minority of Chinese immigrants have arrived in Australia as business migrants selected because of their entrepreneurial ability. Clearly the capital inflow, jobs and export potential that are associated with Chinese business migrants are sufficient economic benefit to outweigh older concerns of racial exclusion. But not all ethnic Chinese in Australia today are highly qualified professionals. Some ethic Chinese still arrive as refugees, others enter as undocumented workers. For these Chinese immigrants in Australia today a business enterprise drawing heavily on ethnic rather than class resources in areas such as restaurants or retailing is still an attractive alternative. These ethnic Chinese entrepreneurs in Australia experience many of the features common to immigrant entrepreneurship universally, particularly the importance of family and friendship networks for finance, employment and trading contacts. It is clear that the paths of ethnic Chinese immigrants into entrepreneurship in Australia are much more diverse today than in the past. Some still attempt the (increasingly difficult) path from unskilled wage labourer to small shop or restaurant owner. Other Chinese immigrants are accessing new business opportunities opening up for entrepreneurs to serve the needs of the time-poor/ cash-rich high flyers in our global cities (Sassen, 1994). Ethnic resources and family resources will be critical to any such entrepreneurial success. Other Chinese immigrants find more attractive opportunities in corporate offices, while others do the long years of university apprenticeship before becoming a self-employed doctor, dentist, lawyer or accountant. Chineseness is still an important factor in understanding Chinese entrepreneurs in Australia, but in an uneven and changing way.

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There is of course a spatial dimension to Chinese entrepreneurship, particularly in retailing. Chinatowns, a feature of most of Australia’s capital cities, are important to the social life of the Chinese community. Chinese gather for social gatherings, weddings and birthdays, visit regularly to buy Chinese newspapers, videos, food and books, and visit medical services and the cinema. Sydney’s Chinatown, for example, dates from over a century ago, when most Chinese lived there. In the 1980s, Sydney’s Chinatown was redeveloped to include large shopping malls and landscaping. It was linked to the new Darling Harbour development via the Chinese Gardens. Hong Kong Chinese capital financed much of this development. Today Chinatowns are centres of Chinese commerce and retailing, but not Chinese settlement. Sydney’s Chinese immigrants settle in different urban precincts correlated more with social class than ethnicity. Refugees and poorer Chinese settle in Sydney’s western suburbs where new Chinatowns have emerged, such as the one in Cabramatta with three large shopping malls and numerous small businesses, many of them owned by Chinese. Chinese entrepreneurs in Australia have contributed considerably to the making of multicultural Australia. This contribution dates back more than a century and a half. Chinese entrepreneurs have created considerable financial and social capital in the Chinatowns of the big Australian metropolises and in the main streets of Australian suburbs and rural towns. They have had to move into entrepreneurship in the face of, and often because of, racist hostility at the institutional and personal level while living in Australian cities and towns. Despite these difficult odds, many Chinese entrepreneurs succeeded admirably to create examples, jobs and family and community leadership. They were also the vanguard of encroaching Australian cultural diversity as Chinese restaurants sprang up through the suburbs and country towns to provide a culinary diversity in food that did not exist at that time. Many Chinese entrepreneurs have subsequently become community leaders in Australia, working hard for the rights of their people and becoming a welcoming conduit for those ethnic Chinese newly arrived in the Australian Diaspora. A few have become very wealthy owners of transglobal businesses, others astronauts, but most have remained in the small business sector, creating jobs and exploring business opportunities within the overseas Chinese networks and wider afield. References Bonacich, E. and Modell, J. (1980), The Economic Basis of Ethnic Solidarity: Small Business in the Japanese American Community, University of California Press, Berkeley, Los Angeles, CA and London. Bottomley, G., de Lepervanche, M. and Martin, J. (1991), Intersexions: Gender/Class/Culture/ Ethnicity, Allen & Unwin, Sydney. Borowski, A. (1992), ‘‘Business migration to Australia’’, paper to Conference on Immigration and Refugee Policy: The Australian and Canadian Experiences, York University, Toronto, Canada, 2-5 May, pp. 1-11. BIPR (Bureau of Immigration and Population Research) (1994a), Community Profiles 1991 Census: Vietnam Born, Australian Government Publishing Service, Canberra.

BIPR (Bureau of Immigration and Population Research) (1994b), Community Profiles 1991 Census: Singapore Born, Australian Government Publishing Service, Canberra. BIPR (Bureau of Immigration and Population Research) (1994c), Community Profiles 1991 Census: Malaysia Born, Australian Government Publishing Service, Canberra. Burnley, I. (1986), ‘‘Immigration: the post-war transformation of Sydney and Melbourne’’, in Davidson, J. (Ed.), The Sydney-Melbourne Book, Allen & Unwin, Sydney. Burnley, I. (1995), ‘‘The geography of ethnic communities’’, in Fitzgerald, S. and Wotherspoon, G. (Eds), Minorities: Cultural Diversity in Sydney, State Library of New South Wales Press, Sydney, pp. 174-91. Castles, S. (1996), ‘‘The racisms of globalisation’’, in Vasta, E. and Castles, S. (Eds), The Teeth are Smiling: The Persistence of Racism in Multicultural Australia, Allen & Unwin, Sydney, pp. 17-45. Castles, S., Foster, W., Iredale, R. and Withers, G. (1998), Australia and Immigration: A Partnership: A Review of Research and Issues, Allen & Unwin with the Housing Industry Association Ltd, St Leonards. Chin, K.H. (1988), ‘‘Chinese in modern Australia’’, in Jupp, J. (Ed.), The Australian People: An Encyclopedia of the Nation, Its People and Their Origins, Angus and Robertson, Sydney, pp. 317-23. Choi, C.Y. (1975), Chinese Migration and Settlement in Australia, University of Sydney Press, Sydney. Collins, J. (1991), Migrant Hands in a Distant Land: Australia’s Post-war Immigration, 2nd ed., Pluto Press, Sydney. Collins, J. (1996a), ‘‘Vocational education and training and the accent ceiling’’, Education Links, Vol. 51, Summer, pp. 20-3. Collins, J. (1996b), ‘‘The changing political economy of Australian racism’’, in Castles, S. and Vasta, E. (Eds), The Teeth are Smiling: The Persistence of Racism in Multicultural Australia, Allen & Unwin, Sydney, pp. 73-96. Collins, J. (1998a), ‘‘Cosmopolitan capitalism: ethnicity, gender and Australian entrepreneurs’’, unpublished PhD thesis, University of Wollongong. Collins, J. (1998b), ‘‘Immigrant unemployment and ethnic small business in Australia’’, in Carson, E., Jamrozic, A. and Winefield, T. (Eds), Unemployment: Economic Promise and Political Will, Australian Academic Press, Brisbane, pp. 133-47. Collins, J. (2000), ‘‘Immigration and immigrants: ethnic inequality and social cohesion’’, in Boreham, P., Stokes, G. and Hall, R. (Eds), The Politics of Australian Society: Political Issues for the New Century, Longman, Sydney, pp. 302-16. Collins, J. (2001), ‘‘Globalisation, deregulation and the changing Australian labour market’’, in Bertone, S. and Casey, H. (Eds), Migrants in the New Economy, Workplace Studies Centre, Victoria University, Melbourne, pp. 13-45. Collins, J. and Castillo, A. (1998), Cosmopolitan Sydney: Exploring the World in One City, Pluto Press, Sydney. Collins, J. and Henry, F. (1994), ‘‘Racism, ethnicity and immigration in Canada and Australia’’, in Adelman, H. et al. (Eds), Immigration and Refugee Policy: Australia and Canada Compared Vol. II, Melbourne University Press, Melbourne, pp. 515-48. Collins, J., Gibson, K., Alcorso, C., Tait, D. and Castles, S. (1995), A Shop Full of Dreams: Ethnic Small Business in Australia, Pluto Press, Sydney and London. Collins, J., Sim, C.-L., Dhungel, B., Zabbal, N. and Noel, G. (1997), Training for Ethnic Small Business, University of Technology Sydney (UTS), Sydney.

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Collins, J., Mondello, L., Breheney, J. and Childs, T. (forthcoming), Cosmopolitan Melbourne: Exploring the World in One City, Expresso Press, Sydney. Coughlan, J.E. and McNamara, D.J. (Eds) (1997), Asians in Australia: Patterns of Migration and Settlement, Macmillan, Melbourne. Cronin, K. (1975), ‘‘The yellow agony’’, in Evans, R., Saunders, K. and Cronin, K. (Eds), Exclusion, Exploitation and Extermination, ANZ Books, Sydney. de Lepervanche, M. and Bottomley, G. (Eds) (1988), The Cultural Construction of Race, Meglamedia, Sydney. DIEA (Department of Immigration and Ethnic Affairs) (1980), Review of Activities to 30 June 1980, Australian Government Publishing Service, Canberra. DILEGA (Department of Immigration, Local Government and Ethnic Affairs) (1991a), Program Performance Statements 1991-1992: Immigration, Local Government and Ethnic Affairs Portfolio, Budget Related Paper 8.9, Canberra. DILEGA (Department of Immigration, Local Government and Ethnic Affairs) (1991b), ‘‘Trends in the BMP Monitoring Survey as at 30 June 1991’’, Business Skills Section, Canberra. Ellingsen, P. (1990), ‘‘Hong Kong rich buy way to foreign passports’’, The Age, 18 July. Fagan, B. and Webber, M. (1994), Global Restructuring: The Australian Experience, Oxford University Press, New York, NY. Fitzgerald, S. (1997), Red Tape, Gold Scissors, State Library of NSW Press, Sydney. Glezer, L. (1988), ‘‘Business and commerce’’, in Jupp, J. (Ed.), The Australian People: An Encyclopedia of the Nation, Its People and Their Origins, Angus and Robertson, Sydney, pp. 860-4. Ho, C. and Coughlan, J.E. (1997), ‘The Chinese in Australia: immigrants from the People’s Republic of China, Malaysia, Singapore, Taiwan, Hong Kong and Macau’’, in Coughlan, J.E. and McNamara, D.J. (Eds), Asians in Australia: Patterns of Migration and Settlement, Macmillan, Melbourne, pp. 120-70. Hugo, G. (1994), ‘‘Demographic and spatial aspects of immigration’’, in Wooden, M., Holton, R., Hugo, G. and Sloan, J. (Eds), Australian Immigration: A Survey of the Issues, 2nd ed., Australian Government Publishing Service, Canberra, pp. 30-110. Kee, P. (1994), ‘‘Unravelling the global Chinese business networks’’, BIPR Bulletin, No. 11, April, pp. 9-12. Kee, P. et al. (1993), ‘‘People movements between Australia and Asian-Pacific national: trends, issues and prospects’’, paper to the Conference on Asia-Pacific Migration Affecting Australia, Darwin, 14-17 September. Kraar, L. (1994), ‘‘The overseas Chinese: lessons from the world’s most dynamic capitalists’’, Fortune, 14 November, pp. 2-12. Lever, T.C., Ip, D., Kitay, J., Phillips, I. and Tracy, N. (1991), Asian Entrepreneurs in Australia: Ethnic Small Business in the Chinese and Indian Communities in Brisbane and Sydney, Australian Government Publishing Service, Canberra. Light, I. and Rosenstein, C. (1995), Race, Ethnicity and Entrepreneurship in Urban America, Aldine de Gruyter, New York, NY. Light, I. and Gold, S.J. (2000), Ethnic Economies, Academic Press, San Deigo, CA. Li, P.S. (1976), ‘‘Ethnic businesses among Chinese in the US’’, The Journal of Ethnic Studies, Vol. 4 No. 3, pp. 35-41. Li, P.S. (1988), The Chinese in Canada, Oxford University Press, Toronto. Li, P.S. (1992), ‘‘Ethnic enterprise in transition: Chinese business in Richmond, BC, 1980-1990’’, Canadian Ethnic Studies, Vol. 24. pp. 120-38.

McQueen, H. (1970), A New Britannia, Penguin, Ringwood. Markus, A. (1979), Fear and Hatred: Purifying Australia and California 1850-1901, Hale & Iremonger, Sydney. Markus, A. (1994), Australia’s Race Relations 1878-1993, Allen & Unwin, Sydney. Miles, R. (1982), Racism and Migrant Labour, Routledge & Kegan Paul, London. Pe-Pua, R., Mitchell, C., Iredale, R. and Castles, S. (1996), Astronaut Families and Parachute Children: Hong Kong Immigrants in Australia, Bureau of Immigration, Multicultural and Population Research, Australian Government Publishing Service, Canberra. Price, C. (1966), Australian Immigration: A Bibliography and Digest, No. 4, ANU Press, Canberra. Price, C. (1974), The Great White Walls are Built: Restrictive Immigration to North America and Australasia 1836-1888, Australian National University Press, Canberra. Price, C. (1988), ‘‘The ethnic character of the Australian population’’, in Jupp, J. (Ed.), The Australian People: An Encyclopedia of the Nation, Its People and Their Origins, Angus and Robertson, Sydney, pp. 119-28. Roofey, B., Stranger, A., Forsaith, D., McInnes, E., Petrone, E., Symes, C. and Xydias, M. (1996), Women in Small Business: A Review of Research, Department of Industry Science and Tourism, Australian Government Publishing Service, Canberra. Sassen, S. (1994), Cities in a World Economy, Pine Forge Press, London, New Delhi. Saxenian, A.L. (1999), Silicon Valley’s New Immigrant Entrepreneurs, Public Policy Institute of California, San Francisco, CA. Skeldon, R. (1992), ‘‘International migration within and from the East and Southeast Asian region: a review essay’’, Asian and Pacific Migration Journal, Vol. 1 No. 1, pp. 19-63. Stromback, T. and Malhotra, R. (1994), Socioeconomic Linkages of South Asian Immigrants with their Country of Origin, BIPR and Australian Government Publishing Service, Canberra. The Parliament of the Commonwealth of Australia (1991), Business Migration Program. Report 310, Australian Government Publishing Service, Canberra. Thomas, M. (1997), ‘‘The Vietnamese in Australia’’, in Coughlan, J.E. and McNamara, D.J. (Eds) (1997), Asians in Australia: Patterns of Migration and Settlement, Macmillan, Melbourne, pp. 274-95. Waldinger, R., Aldrich, H., Ward, R. and Associates (1990), Ethnic Entrepreneurs – Immigrant Business in Industrial Societies, Sage, Newbury Park, CA, London, New Delhi. Wang, S. (1988), ‘‘Chinese immigration 1840s-1890s’’, in Jupp, J. (Ed.), The Australian People: An Encyclopedia of the Nation, Its People and Their Origins, Angus and Robertson, Sydney, pp. 298-304. Wong, L.L. (1993), ‘‘Immigration as control accumulation: the impact of business immigration to Canada’’, International Migration, Quarterly Review, Vol. XXXI No. 1, pp. 171-90. Wong, L. and Netting, N. (1992), ‘‘Business immigration to Canada: social impact and racism’’, in Satzewich, V. (Ed.), Deconstructing a Nation: Immigration, Multiculturalism & Racism in ‘90s Canada, Fenwood Publishing, Halifax, Nova Scotia. Viviani, N. (1984), The Long Journey: Vietnamese Migration and Settlement in Australia, Melbourne University Press, Carlton. Yarwood, A.T. (1968), Attitudes to Non-European Immigration, Cassell, Stanmore. Yuan, C.M. (1988), ‘‘Chinese in white Australia 1901-1950’’, in Jupp, J. (Ed.), The Australian People: An Encyclopedia of the Nation, its People and Their Origins, Angus and Robertson, Sydney, pp. 304-7. Zhou, M. (1992), Chinatown: The Socioeconomic Potential of an Urban Enclave, Temple University Press, Philadelphia, PA.

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From four-course Peking duck to take-away Singapore rice An inquiry into the dynamics of the ethnic Chinese catering business in Germany Maggi W.H. Leung Department of Geography, University of Bremen, Germany Keywords Restaurants, Germany, Ethnic groups, Immigrants Abstract Draws on the concept of ‘‘mixed embeddedness’’ to challenge the popular culturalistic view that Chinese migrants enter the catering business simply because they are Chinese. Based on qualitative interview results and observations from fieldwork conducted in German cities, illustrates first the dynamic nature of the Chinese restaurant trade. Proceeds to explore how important factors such as Chinese migrants’ access to alternative employment, the development of in- and out-migration policies in Germany and East Asia, the changing consumer demand and market conditions, as well as availability of set-up capital, shape the volume and forms of Chinese restaurant trade, the kinds of food served, hiring practices and other business strategies.

Introduction As I began my dissertation fieldwork on the ethnic Chinese migrants in Germany, I contacted the Federal Statistical Office (Statistisches Bundesamt) for available data on this relatively small migrant group. My request was promptly answered with a few tables of very basic demographic data on migrants from the People’s Republic of China (hereafter, China) and Taiwan. Much more interesting was what was printed on the covering letter – sincere advice from the officer that I should inquire for further information from the German Hotel and Restaurant Association (Deutscher Hotel- und Gaststa¨ttenverband), as most of the Chinese migrants are, as he perceived, selfemployed in the catering sector. This experience underlines how Chinese migrants are commonly identified in Germany and in many other places in the world. Chinese restaurants, Imbiß (fast food and take-away) or grocery stores are immediate mental associations that come not only to German minds when the word ‘‘Chinese’’ is heard. Many Chinese also share this assumption. Some researchers (e.g. Yao, 1988) and more often community representatives (e.g. the Chairman of the Federation of Chinese Organisation in Europe and representatives of ethnic Chinese associations in different German cities)

International Journal of Entrepreneurial Behaviour & Research, Vol. 8 No. 1/2, 2002, pp. 134-147. # MCB UP Limited, 1355-2554 DOI 10.1108/13552550210423769

This paper presents findings from the author’s ongoing doctoral research funded by the German Academic Exchange Service. The author is also indebted to informants for sharing their valuable time, experiences and opinions with her. She also appreciates the helpful comments from the editors of this special issue on earlier drafts of this paper. This article is part of a special issue of papers entitled ‘‘The economic context, embeddedness and immigrant entrepreneurs’’ edited by Jan Rath, Robert Kloosterman and Eran Razin.

estimate the number and distribution of ethnic Chinese living in Germany Chinese catering based on the number of Chinese restaurants established in different regions. business in Owing to definition and registration complexity, the exact number of Chinese Germany catering businesses is not available. While the Chairman of the Federation of Chinese Organisation in Europe estimates that there are 13,000 to 14,000 such businesses in Germany, about 3,000 were listed in a business directory Schober 135 Firmenadressen in 2001. This number is somewhat in line with the approximately 4,300 restaurants indexed in the Chinese business directory, China-Branchenbuch (2001). These establishments can be categorised into three main types: restaurants, bistro as well as fast food and takeaways (Imbiß). Chinese restaurant businesses are found in all parts of Germany but concentrations are located in larger urban centres such as Berlin, Hamburg, Frankfurt am Main, Mu¨nchen, Bonn, Ko¨ln and Du¨sseldorf. In this paper, I aim to take a more critical and comprehensive look into the dynamics of this Chinese migrant business sector. By ‘‘critical’’ I mean to challenge a common theme in the Anglo-American as well as German academic discourse and public impression that seemingly distinctive internal characteristics of an ethnic group determine the type of businesses in which they are engaged and the way in which these businesses are performed. Drawing on insights from the ‘‘mixed embeddedness’’ concept (Kloosterman et al., 1999) which emphasises the crucial interplay between the social, economic and institutional contexts in the analysis of migrant entrepreneurship, I hope to depart from such a deterministic view of migrant business as merely an ethnic product. Rather than focusing only on the cultural aspect, this paper draws attention to the importance of other relevant structural factors. To this end, I shall proceed first with an overview of the changing demographics of the Chinese restaurant business sector. This sets the stage for my analysis of four important factors that shape the characteristics of the catering businesses. Aspects considered here are: (1) Chinese migrants’ access to better employment alternatives; (2) the in- and out-migration policies in Germany and China; (3) the changing economic and market conditions; and (4) the availability of capital to potential entrepreneurs. My analysis here does not intend to provide a complete list of factors that interact to condition the nature of the Chinese catering trade. By pointing out a few of them, I attempt to illustrate how culturalistic assumptions fail to consider some other crucial aspects of the complex phenomenon. This work is based on my current doctoral research, a broader study of the ethnic Chinese migrant communities in Germany. Here, I shall present observations and analyses drawing on my communication – mainly through semi-structured interviews (conducted in Cantonese or Mandarin Chinese, on average lasting one to two hours per meeting) – with owners or workers of ethnic Chinese restaurants in a number of urban centres. Qualitative, semi-

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structured interviews supported with participant observations, in contrast with conventional close-ended surveys, allowed me to learn about factors and concerns of importance to my informants’ business decisions which were not obvious to me as we commenced our dialogue. By letting my informants co-steer the conversation, I can better contexualise and make sense of their seemingly ‘‘pure economic’’ or ‘‘just ethnic’’ decisions. Is running a restaurant really a Chinese thing to do? In Germany, the catering trade is quantitatively and historically the most important sector among the various businesses in which Chinese migrants are engaged, like the case in many other overseas communities[1]. The strong presence of the Chinese in the restaurant and take-away food sectors might let observers slip into the belief that a certain predisposition of the Chinese culture determines their participation in such economic sectors. As a matter of fact, such a cultural approach has long been a well-subscribed theoretical basis in studies of ethnic or migrant businesses. Watson (1977), for instance, in his research on the Chinese catering trade in Britain, underlines that the Chinese are in some ways unique or at least advantaged because of their cultural values and family structures that are conducive to successful entrepreneurship. Light’s (1972) earlier work is another example that at times over-emphasises the significance of Chinese culture in explaining the performance of their business. According to such cultural-determinist views, Chinese people are endowed with certain ethnic-specific resources and the Chinese entrepreneurs are able to mobilise such cultural resources. While it could be argued that Chinese people are armed with certain advantages (e.g. being expected to be able to sell good, ‘‘authentic’’ Chinese food) in businesses like the restaurant trade, a mere focus on the cultural aspect that ignores other important politicaleconomic factors is much less than comprehensive. Is there something in the Chinese blood that explains their engagement in the catering business? That running a restaurant is hard work is a well-known fact. If the Chinese were somehow culturally suited to enter this field, they would have to be determined to prefer hard work at least – a thought that sounds rather absurd. To go beyond thinking that the Chinese were culturally moulded to become restaurateurs, it is fruitful to investigate the alternatives available to these migrants in the formal labour market. That is, if they have a chance, would they enter this business that is infamous for much hard work? Another often stated ‘‘ethnic resource’’ among Chinese business people is the common co-operation and participation of family members in ethnic enterprises (Waldinger et al., 1990). Indeed many youngsters of restaurant family background ‘‘help out’’ over weekends and during school holidays. The ‘‘helping out’’ by retired cooks and housekeepers is essential to the survival of some, particularly small-scale, establishments. Instead of simply calling this ‘‘readiness to help’’ among family members and friends an ‘‘ethnic’’ resource, it is as important to understand it taking other determinants into account. While Chinese people often feel culturally compelled to agree when asked for help

from family and close friends, it is also necessary to situate this kind of ‘‘help’’ Chinese catering in the personnel management of these restaurants, which in turn reflects business in market conditions. Another issue that I shall look into in this paper is the Germany practice of capital pooling among co-ethnics, again one of the well-known ‘‘ethnic resources’’ among migrant entrepreneurs. I suggest, however, that the practice should be contextualised in the wider political-economic context, that 137 is, beyond being characterised as an ethnic benevolence. In order to demonstrate the need to take into account factors that shape an entrepreneurship beyond the ethnic-cultural ones, I shall draw insights from the ‘‘mixed embeddedness’’ perspective first advocated by Kloosterman et al. (1999). This broader framework emphasises the need to pay attention to the social, economic and institutional contexts in understanding migrant businesses. The authors argue that the rate of participation in entrepreneurship of a particular migrant group is a result of the interplay between socioeconomic and ethno-social characteristics of the particular group and the opportunity structure – a function of the state of technology, costs of production, nature of the demand for the products or service as well as the institutional framework (Kloosterman et al., 1999, p. 253). A careful consideration of the different aspects helps make sense of the complex phenomenon studied. Before I move on to provide more detailed analyses, a brief overview of the historical development of the restaurant trade is in order. The changing demographics of the Chinese restaurant community Officially, by the end of 1999 almost 43,000 Chinese from China and over 5,300 from Taiwan lived in Germany (Statistisches Bundesamt, 2000). Scholars have estimated that there are about 100,000 ethnic Chinese living, including Chinese people from national origins other than China and Taiwan, such as Hong Kong, Singapore, Malaysia, Vietnam, Indonesia, as well as undocumented migrants (Ma, forthcoming; Pang, 2001; Pieke, 2000). The Federation of Chinese Organisations in Europe estimates that there are about 150,000 ethnic Chinese living in Germany (telephone interview, 31 October 1999). Chinese restaurant business emerged in the late nineteenth and early twentieth century when Chinese, mainly former seamen on European shipping lines from the Hong Kong and Guangdong province, settled down and established small businesses in cities such as Hamburg, Bremen and Berlin. In addition to the seafarers, peddlers and street performers accounted for some of the early Chinese restaurateurs. After the Second World War, a larger number of migrants from the New Territories[2] in Hong Kong and to a lesser extent from Malaysia and Singapore arrived in Germany, mostly by way of Britain. The increase of migrants from Hong Kong served as a source of labour for the booming restaurant trade in Britain, The Netherlands, Germany, France, Belgium, and to lesser extent the Scandinavian countries and Switzerland. It is perhaps important to note that most of these men who made up the backbone of the Chinese catering trade in Europe had not been involved in the sector before

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migration. Most of them were farmers who had received little formal education or occupational training. In the 1970s, a larger flow of ethnic Chines migrants from Southeast Asian countries such as Indonesia, Malaysia and Vietnam arrived in Germany and Europe at large, mainly due to the anti-Chinese sentiments in their home countries. While those who were given refugee status, such as the boat people from Vietnam, were allocated work and residence, others had to depend on themselves to gain a living. Entering the restaurant business was one of the obvious career paths among many of them. Rapid economic growth in East Asian economies, especially those of Hong Kong, Taiwan, Singapore and Malaysia in the 1970s and 1980s, and the longterm economic downturn in western Europe since the late 1980s have changed the wage differential that used to exist between the two regions. This accounts to a large extent for the reduction of migration from these ‘‘Asian tigers’’ to Europe, while more and more migrants from China try their fortune overseas as the Chinese political-economy shares increasingly intense linkages to the global economy. Ever since the late 1970s, there has been an increase in migration among Chinese nationals, both internally and internationally. Mainland Chinese make up nowadays the bulk of new ethnic Chinese migrants in Germany. This change has also been reflected in the make-up of the workers as well as restaurant owners in the catering sector. An increasing number of these new Chinese immigrants leave China as students and settle down overseas after their education. On the other hand, many of them depart as labour migrants, among whom many come from the northern Fujian and southern Zhejiang provinces. While many of these workers, with an increasing number of females, came to Germany through official temporary labour contracts[3], some of my interviewees have suggested that many of them have left China to Europe via channels organised by human traffickers – a sign that reflects the increasing internationalisation of the Chinese migration system (Pieke, 2000; interviews with various restaurateurs)[4]. The changes in the social demographic profile of the restaurateurs reflect the development of broader political and economic conditions both in the Asian and European contexts. Consequently, the social background of the migrants has an impact on, among other things, the hiring practices, management strategies and kinds of food served in various restaurants. After having provided the background of the development of the Chinese catering trade, I shall turn to focus on the nature of the business in the present. First, let us revisit the question ‘‘Is running a restaurant really Chinese?’’ by exploring why many Chinese migrants ended up being restaurateurs. Limited access to better employment alternatives Similar to the previous findings on migrants’ motivations to become selfemployed, my informants have generally set up their businesses for two reasons. On the one hand, some consider the autonomy and independence of being one’s own boss as important incentives, while others cited the lack of

opportunities in getting a satisfactory job that offers prospects in the German Chinese catering labour market as the main factor. Even though, as I have earlier mentioned, it is business in common to see children helping out in family businesses, my personal Germany communication with older generation migrants and their children, as well as more educated young migrants, reveals that as long as better alternatives exist, the catering business is not considered as a desirable occupation. Mr and Mrs 139 Liu who migrated from Hong Kong in the 1960s, like many parents, are content that all their children have obtained university degrees and do not feel sorry that they finally had to pass their last restaurant on to non-family members[5]. Mrs Liu further commented that ‘‘only those kids who are not motivated do not make it to university’’ and might have to then stay in the catering sector (interview in Hamburg, 11 January 2000). A university degree is, however, not always a ticket to leave or not to enter the catering business. During our interview (3 December 1999 in Hamburg) Li Kai (in his 40s), the owner of a travel agency in Hamburg, points out that as the economic connections between China and Europe intensify, the demand for educated Chinese people, especially those who have studied in Germany, has increased. Nonetheless, the number of jobs open to the many Chinese students is limited due to the generally high unemployment rate. Running one’s own business, as he does, is an exit. While Chinese migrant business has diversified over the past decades, opening a Chinese restaurant continues to be one of the few obvious ways to earn a living among many of the young Chinese who prefer to stay in Germany. As compared to second generation Chinese migrants, newcomers more often face difficulty in finding a satisfying job. Generally, fluency in the German language and knowledge of the ‘‘German way of doing things’’ are key factors that distinguish newcomers from second generation Chinese migrants in the labour market. For many newcomers in the business, a restaurant business is the key to livelihood and economic independence, but not necessarily the dream, especially among those who have received other kinds of occupational training. Impact of migration policies on Chinese catering business In the world of increasing inter-connections, the presence of migrants and migrant businesses has become something that is taken for granted. The development of migrant businesses is, as a matter of fact, contingent to a whole array of economic, political and social conditions. To state the obvious, perhaps, the common appearance of Turkish kebab shops, Italian ice cream parlours and pizzerias or Chinese Imbiß and restaurants would not have taken place if Germany never opened its gate for these de facto migrants or did not allow them to set up these shops. The policies regulating self-employment among non-nationals in Austria, for example, are even more restrictive than in Germany, which accounts for the very low level of migrant entrepreneurship as compared to other western European countries (Haberfellner, 2000). Like many other countries in Europe and North America, Germany has also modified its immigration policies in order to motivate or avoid in-migration.

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These efforts include the well-known West German ‘‘guest-worker’’ recruitment programme running from the 1950s to the 1970s, the East German contract worker system carried out in the 1970s and 1980s, as well as the recent green card initiative to attract the highly demanded information technology experts. The case of a short-term state action to recruit Taiwanese cooks a few decades ago is, however, a smaller scale and less remembered case, mainly motivated by political rather than economic interests. In the mid-1960s, the West German state expressed its alliance with non-communist Taiwan in the form of a skilled worker recruitment scheme. Under the policy, 5,000 cooks from Taiwan were invited to work in West Germany as a friendship gesture[6]. According to the agreement, every one of these 5,000 cooks was allowed to set up a restaurant and invite five other cooks in the subsequent five years after their arrival. This modification of the immigration policies during the Cold War period greatly affected the pattern of Chinese restaurant trade in West Germany. In the course of a few years, the number of Taiwanese migrants who came through this recruitment scheme rose to tens of thousands (Kaminer, 2000). This particular organised effort of the West German state to invite Chinese culinary experts, in addition to the relatively high number of Hong Kong Chinese arriving, established the presence of the Chinese restaurant trade in the 1960s and 1970s. Favourable conditions for non-EU foreign labour and entrepreneurs to enter Germany have ceased since the 1980s when the economy started to slow down and unemployment worsened. Current regulations for labour recruitment in restaurants are restrictive. In 1997, the Chinese and German states reached an agreement to control the recruitment of cooks from overseas – a unique bi-lateral arrangement met in this economic sector. Depending on its size, each restaurant is eligible to engage one or two cook(s) with proof of qualification, including German language proficiency. In order to prevent these cooks from staying long term in Germany, the work permit is limited to three years with no possibility of extension. After they leave Germany, they have to first wait for three years before they are eligible to apply for the work permit again. Many of my interviewees have expressed their frustration about this labour recruitment regulation. Instead of the preferred practice, which was legal and common before 1997, that restaurants recruit cooks through their own social networks in China, hiring has to be conducted now through one of the 25 state agencies in China which are supposed to provide training and perform assessment. Many of my informants considered these agencies as de facto licenses for the officials to make profits. Cooks who participate have to pay a relatively large sum to these agencies – a monthly fee of 150DM social insurance contributions (for the provision of or participation in training programmes, and the administrative fees of the Chinese authorities) during their contract period in Germany. In a major Chinese community newspaper, journalist Peng (2001) recently reported that in one case a cook was requested to pay RMB 30,000 (approximately 8,500DM) for an appointment. In addition, extra fees are levied for the issue of a passport, visa, language course and skill assessment. Before the advent of this recruitment system, employers in Germany were able to hire a cook in 25 days.

Now the process takes at least three to five months and sometimes as long as Chinese catering one year. Some employers also have disappointing experiences, in that the business in ‘‘cooks’’ sent to Germany apparently had bought their certificates from corrupt Germany officials and arrived without any cooking experience. The serious difficulty in finding qualified cooks was cited as the major problem among all of my informants. 141 Chris Lam, a restaurant owner from Hong Kong, changed to employing Chinese workers who are already in Germany, especially those who are refugees with work permits. This hiring practice is also not always practicable, at least not legally, as the German state has stopped issuing work permits to asylum seekers who arrived after May 1997. The restrictive employment regulation and state reluctance in issuing work permits to asylum seekers, coupled with its stringent enforcement mechanism (in addition to, of course, the entrepreneurs’ all-time goal of cutting costs) imposes much stress on restaurant owners. William Chen (in his 40s), a restaurant owner from Taiwan, said bitterly (interview in Frankfurt, 15 May 2001): I think it is a conspiracy of the government here. They do not issue working permits to new asylum seekers, and at the same time, they make it so difficult to hire someone from overseas. For example, the cooks are only allowed to stay here for three years. Of course the cooks would choose to go elsewhere [like to the United States] if they have the option. So we are in a vicious cycle. No one has permits to work and so you have to hire those without papers. And then the police come and check and if they find out, you have to pay a fine. No worries, just pay your fine and you can re-open your restaurants. They only want your money. We also pay tax, right? So they earn double from us.

Facing the difficulty in hiring trained employees, some of the older generation have closed their other restaurants, kept one with mere family workforce and prepare for retirement. Mr and Mrs Liu are an example. Mr Liu recalls how the nature of his business has evolved over the last decades (interview in Hamburg, 11 January 2000): When we first came [in the 1960s], there were so few Chinese restaurants. No competition. We hired ten people and did not have to work. And we could, you might not believe it, choose our customers. If they came in and ordered just two soups, we would not even do their business. Now it’s very hard. Towards the end, we kept one shop. I had to cook and my wife had to serve. Just two of us. We could not hire anyone. Competition had become really bad. Some people would sell their stuff so cheaply, sometimes below cost. Bad business. So we retired.

Mr Liu’s quote highlights the importance of family labour in these small-scale migrant businesses. Children are expected to ‘‘help out’’ over weekends and during holidays. Retired cooks are asked often to ‘‘help out’’ when there is a shortage of labour. Many women also call their work in family restaurants ‘‘helping out’’ as many of them, especially mothers, could ‘‘only’’ work part time due to their family responsibilities, their labour is usually considered less than formal. (The Chinese catering sector remains a highly gendered economic arena. Almost all cooks are men. Women usually work at the bars or as waitresses, earning about two-thirds of what a male cook would earn for the same working hours.) My interviews with ‘‘helpers’’ of these restaurants

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reflected that such informal work, which is usually exchanged for low remuneration, monetary or otherwise, is often considered as ‘‘a moral burden’’. True, one might argue that there is something ‘‘Chinese’’ about the sense of duty to help. But as important for consideration is, I maintain, the impact of the wider economic context, such as the increasingly stiff competition which encourages cutting costs and the scarce availability of qualified cooks in calling for such practice of informal employment. Impact of changing market conditions and consumer preferences In addition to the complication and high cost in hiring qualified workers, the changing market conditions and consumer preferences have also encouraged entrepreneurs to modify their business strategies. Wong Tai Ming (in his 40s) decided a few years ago to open an Imbiß instead of a restaurant which he used to manage as an employee. He told me his rationale (interview in Frankfurt, 16 April 2000): We sell a lunch box for 7-8DM, and from that maybe 1 DM would be the ingredient cost, plus rent and work force. But after deducting everything, you can still make a good profit. And for this kind of guai-lo (foreigner)-cheating Chinese food you don’t need to hire a cook. Anybody can do that. Some rice, some veges, some meat and a bit of soy sauce. If you compare the net profit one gets from an Imbiß and a restaurant, the difference is small. And for Imbiß, you can always find someone to take over the business if you make a loss and want to quit. But a big restaurant would be more difficult. It is not easy to find somebody to take over.

Characteristics of the business have changed to a large extent in the last few decades. The number of Chinese catering businesses has bloomed. Owing to the increasing number of Chinese migrants, scarce availability of and high cost in hiring professional cooks, high competitiveness in the market and the altering idea of what Chinese food should look and taste like in customers’ minds, new ventures mostly take the form of small-scale fast food stores with simple menus, serving what Wong calls ‘‘guai-lo (foreigner)-cheating Chinese food’’. This ‘‘down grading’’ of normal Chinese food from a menu with multiple courses in fancy decorated restaurants to take-away Singapore rice in a box should be understood in the context of the general ‘‘McDonaldsisation’’ of the food sector. Ever since the arrival of the first McDonald’s in Germany in the early 1970s, the idea of fast food has developed rapidly. The increasing popularity of the image of and taste for fast food, together with the higher female participation in the paid labour market, the general extension of working hours and the rising number of migrants (mainly the ‘‘guest workers’’) being laid off from their factory work (and thus being motivated or forced to be self-employed) all contribute to the burgeoning of the fast food sector in Germany. Do¨ner shops and Chinese Imbiß have become expected items of any urban landscape. I am by no means suggesting that all Chinese restaurants have no choice but to sell the chop suey kind of fast food. There are certainly new and old ventures which serve menus with ‘‘authentic’’ and gourmet Chinese cuisine. The trend of making quick money with quick-to-make food is, however, noticeable.

The need to re-create Chinese food is more apparent in areas where a large Chinese catering Chinese clientele is absent. In Germany, while a higher concentration of Chinese business in population is found in big urban areas like Berlin, Hamburg, Frankfurt and Germany Mu¨nchen, a compact spatial concentration in the form of a Chinatown similar to the ones in London or Amsterdam is not found. Under such economicgeographical conditions, many entrepreneurs register a great need to adjust 143 their food to the taste and imagination of non-Chinese clients. Chop suey, fortune cookies and serving dishes with thick sauces are just a few common examples of how Chinese cooking has been modified to suit the taste buds of non-Chinese customers. Not all restaurateurs are content to only serve such Germanised Chinese food. In fact, as the interest for things ‘‘Oriental’’ – ranging from sushi, spring rolls to Buddha pearls and feng shui – attracts more attention in the consumer world, there has also been a call for more ‘‘genuine’’ Chinese food, especially in more cosmopolitan areas like Frankfurt and Berlin. Nonetheless, this trend has not transformed the market to be acceptable to all things ‘‘exotically’’ Chinese. Efforts to go beyond serving chop suey sometimes prove not to be worthwhile. Chris Lam narrates one of his disappointing experiences (interview in Frankfurt, 27 March 2000): I remember once I added some Chinese mushrooms [a delicacy compared to what is normally served] in a dish and the customers asked us to take them out. They would rather stick to their sweet and sour chicken or chop suey. You have to make what they want to eat.

In order to satisfy the general clientele and guarantee a level of profit, serving ‘‘authentic’’ Chinese food ceases to be a first priority in some circumstances. To a certain degree, the Chinese catering business should less be understood as something wholly belonging to the Chinese culture (as if a Chinese culture indeed existed). Rather, it ought to be seen as a cultural co-production between those who serve and those who consume. Availability of capital and nature of catering business In addition to the relative ease of hiring suitable workers and reduced risk in the turbulent market, Imbiß and bistro restaurants are increasingly popular among Chinese entrepreneurs also because of the difficulty in raising a large sum of start-up capital. Obtaining bank loans for a small- to medium-scale food venture is very difficult in Germany, thus leaving family savings and private loans from friends as the main and most reliable source for venture capital. Capital pooling among co-ethnics for business set-ups, another ‘‘ethnic resource’’ often mentioned in the literature now has become less important now. A few of my informants confirmed that such money pools among co-ethincs exist, but not to such an extent as in the 1970s and 1980s. The lending of money to co-ethnics, however, should not be interpreted only as a special ethnic benevolent quality. In addition to helping out co-ethnics, some of the money cycled in the community in the heyday of these ‘‘credit systems’’ was, according to a few of my informants, ‘‘black money’’ earned from smuggling and drug dealing which was then more common. While some established restaurants or

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other businesses themselves for money laundering purposes, lending money to co-ethnics was also another common way to ‘‘get rid of the money’’. Repeatedly, I have been told by different restaurant owners that the business has been ‘‘cleaned up’’ by more stringent control since the 1990s. The drastic decrease in vice activities performed under the cover of catering business as well as the general economic downturn in the European economy have together led to a fall of the ‘‘free floating money’’ available in the community. Money pools have consequently become less important as a source of capital for newcomers into the business sector. The difficulty of raising a large amount of capital, coupled with the increasingly competitive business environment, favour small Imbiß or bistros among newcomers to test out the market while taking minimal risk. According to my informants, setting up an Imbiß would cost around 20,000 to 30,000DM, and opening up a fancy dim sum restaurant business in Frankfurt would cost about 300,000DM. Working hard with little or no entertainment and saving up money is the way most of the newcomers manage to become their own boss. Some of them manage quite quickly, Chris Lam calculated for me quickly: If you work in a restaurant, earning about 3,000DM per month[7]. In a year or so, if you only work and sleep [as a rule, employers provide room and board to their workers], then you can save up for am Imbiß already! All those who have worked for me now have their own business. That is how it goes.

Becoming one’s boss is the goal of many of the new migrants, and opening a small-scale Imbiß restaurant remains the highway to realise their plans. Conclusion Drawing on insights from the mixed embeddedness approach, this paper examines the dynamics of the restaurant trade in Germany, challenging the static image shared in many outsiders’ eyes. Arguing against the conventionally popular culturalistic view, I have illustrated that entering the catering business is not simply a ‘‘Chinese thing to do’’. Similarly, there is also no intrinsic way of running a restaurant as a Chinese person. Any entrepreneurship is mediated by an array of factors, of which the owner’s ethnicity is but one. Affected by changing immigration policies, economic development processes in different parts of Asia, various groups of ethnic Chinese have arrived in Germany and ventured into the restaurant business. While some have arrived in Germany aiming to establish a new life through the food business, some have entered and stayed in the sector semi-reluctantly. With diverse migration histories, these entrepreneurs are armed with different combinations of social and economic capital which in turn shapes their business plans and experiences. The presence of Chinese migrants in Germany is not a historical coincidence. As I have illustrated, the dynamic migration flow of ethnic Chinese from different Asian countries and neighbouring European countries ought to be understood as part and parcel of an international migration system. The social demographics of the migrants and their movements are shaped by the

changing in- and out-migration policies as well as political-economy Chinese catering environments in Europe and Asia. Once in Germany, their access to alternative business in employment, set-up capital, suitable labour and, last but not least, the Germany customers’ imaginations of what Chinese food is like all play a role interactively to mould the development of a migrant business in general and the business decisions of any particular entrepreneur. A serious understanding 145 of the nature of Chinese catering requires putting these pieces of the puzzle together and rejects essentialist assumptions which only focus on a particular aspect like the cultural deterministic arguments. In other words, only by considering the mixed embeddedness of each particular business in a particular context can we pursue a more critical and comprehensive analysis of the dynamic phenomenon of migrant entrepreneurship. Notes 1. As the economic and social capital (language ability, network capacity in the increasingly connected global economy) of more Chinese migrants improves, the range of Chinese enterprises has also diversified. I have written elsewhere about the less typical and newer Chinese ethnic businesses in the German context; for example, the computer wholesale and retail business (Leung, 2001a), as well as the rising number of Chinese travel agencies (Leung, 2001b). 2. The naming of the area North of Kowloon as the ‘‘New Territories’’ reflects only the process of colonisation. The region was by no means newly discovered. As the third stage of the colonisation, the New Territories were leased to the British in 1898 for 99 years under the Convention of Peking. 3. China continues to be a source of contract workers both through official and unofficial channels. From Anxi county in Fujian province, for instance, 1,000 contract workers went to the United States, Singapore and elsewhere between 1985 and 1990 (Pan, 1999). In 1986, a work-study training programme, which was never fully implemented due to the reunification of the German states, was also negotiated between the German Democratic Republic and China through which 90,000 Chinese workers were to go to East Germany for training (Gu¨tinger, 1998). 4. The above sections draw on the narration and discussion of Bowles (1992), Eberstein (1988), Gu¨tinger (1998), Kno¨del (1995), Pan (1999), Pang (2001), Parker (1998), Pieke and Benton (1998), Ru¨bner (1997), Thunø (1999), Yao (1988) and Yu¨-Dembski (1987). 5. All informants are given pseudonyms. 6. In addition, there was also another scheme which invited a number of Taiwanese nurses to work in German hospitals (Yao, 1988). 7. A monthly salary of 3,000DM seems to be above average. According to other informants, a cook in a small restaurant or bistro generally earns between 2,000DM to 2,500DM a month. A recent advertisement in the community newspaper even claims to arrange cooks from China for a monthly salary as little as 800 to 1,000DM. References Bowles, E. (1992), ‘‘The Chinese of Hamburg, Germany: migration and community’’, MA thesis, University of Hawaii. Chinesische Handeszeitung (2001), China-Branchenbuch: Arbeit, Studium, Leben in Deutschland, Chinesische Handeszeitung, Frankfurt.

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Eberstein, B. (1988), Hamburg – China. Geschichte einer Partnerschaft, Christian Verlag, Hamburg. Gu¨tinger, E. (1998), ‘‘A sketch of the Chinese community in Germany: past and present’’, in Benton, G. and Pieke, F. (Eds), The Chinese in Europe, Macmillan, London, pp. 197-208. Haberfellner, R. (2000), Immigrant entrepreneurs in Vienna, paper presented at the Fifth International Conference of the Migcities Network, ‘‘Ethnic neighbour hoods in European cities: entrepreneurship, employment and social order’’, Cologne, 6-9 April. Kaminer, W. (2000), ‘‘Chinesischer Kalender’’, Tageszeitung, 1 August, p. 19. Kloosterman, R., van der Leun, J. and Rath, J. (1999), ‘‘Mixed embeddedness: (in)formal economic activities and immigrant businesses in The Netherlands’’, International Journal of Urban and Regional Research, Vol. 23 No. 2, pp. 252-65. Kno¨del, S. (1995), ‘‘Die chinesische Minderheit’’, in Schmalz-Jacobsen, C. and Hansen, G. (Eds), Ethnische Minderheiten in der Bundesrepublik Deutschland – Ein Lexikon, Beok Verlag, Mu¨nchen, pp. 119-34. Leung, M.W.H. (2001a), ‘‘Get IT going: new ethnic Chinese business. The case of Taiwaneseowned computer firms in Hamburg’’, Journal of Ethnic and Migration Studies, Vol. 27 No. 2, pp. 277-94. Leung, M.W.H. (2001b), ‘‘Placing ‘new’ ethnic businesses: cases of Chinese-owned travel agencies and computer firms in Germany’’, paper presented at ESF Workshop, ‘‘Asian Immigrations and Entrepreneurs in the European Community’’, Nijmegen, 9-11 May. Light, I. (1972), Ethnic Enterprise in America: Business and Welfare among Chinese, Japanese, and Blacks, University of California Press, Berkeley, CA. Ma, L. (forthcoming), ‘‘Space, place and transnationalism: the Chinese Diaspora as geographic system’’, in Ma, L. and Cartier, C. (Eds), Geographic Perspectives on the Chinese Diaspora: Space, Place, Mobility and Identity, Rowman and Littlefield, Boulder, CO. Pan, L. (Ed.) (1999), The Encyclopedia of the Chinese Overseas, Curzon Press, Surrey. Pang, C.L. (2001), ‘‘Ethnic versus creolised/cosmopolitan food. The case of Chinese restaurant ventures in Antwerp’’, paper presented at ESF Workshop ‘‘Asian Immigrations and Entrepreneurs in the European Community’’, Nijmegen, 9-11 May, 2001. Peng, X. (2001), ‘‘Zhongguo dangju di maiguo xieding shi guonei zhuanzhi yu fubai zai haiwai di yanshen’’, Die Zeitung der chinesischen Studenten und Wissenschaftler in Deutschland, August, p. 20. Parker, D. (1998), ‘‘Chinese people in Britain: histories, futures and identities’’, in Benton, G. and Pieke, F. (Eds), The Chinese in Europe, Macmillan, Basingstoke, pp. 67-95. Pieke, F. (2000), Recent Trends in Chinese Migration to Europe: Fujianese Migration in Perspective, International Organization of Migration, Geneva. Pieke, F. and Benton, G. (1998), ‘‘The Chinese in The Netherlands’’, in Benton, G. and Pieke, F. (Eds), The Chinese in Europe, Macmillan, Basingstoke, pp. 125-67. Ru¨bner, H. (1997), ‘‘Lebens-, Arbeits- und gewerkschaftliche Organisationsbedingungen chinesischer Seeleute in der deutschen Handelsflotte: Der maritime Aspekt der Ausla¨nderbescha¨ftigung vom Kaiserreich bis in den NS-Staat’’, Internationale wissenschaftliche Korrespondenz zur Geschichte der deutschen Arbeiterbewegung, Vol. 33, pp. 1-41. Schober Direct Marketing (2001), Schober Frimenadressen. Statistisches Bundesamt (2000), Statistisches Jahrbuch fu¨r die Bundesrepublik Deutschland, Statistisches Bundesamt, Wiesbaden.

Thunø, M. (1999), ‘‘Moving stones from China to Europe: the dynamics of emigration from Zhejiang to Europe’’, in Pieke, F. and Mallee, H. (Eds), Internal and International Migration: Chinese Perspectives, Curzon Press, Surrey, pp. 159-80. Waldinger, R., Aldrich, H. and Ward, R. (1990), Ethnic Entrepreneurs: Immigrant Business in Industrial Societies, Sage Publications, London. Watson, J.L. (1977), ‘‘The Chinese: Hong Kong villagers in the British catering trade’’, in Watson, J.L. (Ed.), Between Two Cultures, Migrants and Minorities in Britain, Blackwell, Oxford, pp. 191-213. Yao, S. (1988), Hsi-te, Ao-ti-li, Jui-shih Hua Chiao Kai Kuang, Cheng Chung Bookstore, Taipei. Yu¨-Dembski, D. (1987), ‘‘‘China in Berlin’’, 1918-1933 – Von chinesischen Alltag und deutscher Chinabegeisterung’’, in Kuo, H.Y. (Ed.), ‘‘Berlin und China’’ Dreihundert Jahre wechselvolle Beziehungen, Colloquium Verlag, Berlin, pp. 117-30.

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Ching Lin Pang Raxen Network Centre for Equal Opportunities and Opposition to Racism, Wetstraat, Brussels, Belgium Keywords Entrepreneurialism, Ethnic groups, Immigrants, Restaurants, Belgium Abstract Maps and analyzes the development of ethnic Chinese food in the city of Antwerp through the ethnography of both Chinese immigrant entrepreneurs and their customers. Most existing studies draw our attention to group characteristics in explaining Chinese immigrant small businesses, predominantly clustered in the catering sector. Some studies examining Chinese immigrants and the development of the catering sector adopt a mixed model of group characteristics and opportunity structures in the broader society. Looks into a hitherto unexplored terrain, namely the relation between the white customer and the immigrant entrepreneur. Such an in-depth analysis ‘‘from within’’ instructs us about the dynamics of the immigrant/ethnic restaurant business. From the perspective of the immigrant entrepreneur, immigrant/ethnic restaurants provide in many instances an avenue to social mobility, thereby overcoming the general constraints facing immigrants such as insufficient financial capital, low educational levels, linguistic handicap, etc. The economic advancement is the success side, whereas the success has a series of social costs. The social exchange is fraught with ambivalence, which in its most extreme manifestation may turn into what Frank Chin calls ‘‘food pornography’’. The two dimensions both present in Chinese immigrant restaurant ventures for they provide opportunities with a series of social costs.

International Journal of Entrepreneurial Behaviour & Research, Vol. 8 No. 1/2, 2002, pp. 148-161. # MCB UP Limited, 1355-2554 DOI 10.1108/13552550210423778

Introduction Chinese immigrant/ethnic restaurants are ubiquitous in most western cities and indeed even in developing countries. The scope of this article is, however, limited to the emergence of the Chinese restaurants in Belgium and more specifically in Antwerp. In contrast to other disadvantaged immigrant groups in western advanced economies, the Chinese remain a silent and invisible community, while engaging successfully in the catering sector. In the same breath one needs to bring into the picture the precarious image of Chinese immigrant food and the unequal power relationship with their customers, casting a shadow on this ‘‘success story’’. So far, studies on the Chinese catering business seem to be an exception rather than a rule. The paucity of studies might be attributed to a latent disdain for the localized Chinese immigrant food, which developed out of serving primarily non-Chinese clients (Smart et al., 1999). In the general literature on Chinese culture and Chinese entrepreneurship, of which catering business constitutes one of the more salient activities, group characteristics such as solidarity (Portes and Zhou, 1991), ‘‘utilitarianistic This article is part of a special issue of papers entitled ‘‘The econmic context, embeddedness and immigrant entrepreneurs’’ edited by Jan Rath, Robert Kloosterman and Eran Razin.

familism’’ (Lau, 1981), and family and lineage ties (Watson, 1975) have been Chinese restaurant thoroughly discussed. Studies exclusively focusing on Chinese restaurants and ventures in takeaways in Europe seek to analyze the growth and decline of the sector (Van Antwerp der sijde, 1983; Pieke, 1988; Rijkschroeff, 1998; Zhang, 1999), combining an explanatory model of group characteristics and opportunities in the host society, followed by a discussion on the social position of the Chinese as an 149 immigrant group in the broader, multi-ethnic society. Other studies alert us to racist attitudes of white customers towards Chinese restaurateurs (Parker, 1994; Song, 1997a, b). This article aspires to explore the paradoxical relationship between the immigrant entrepreneur and his/her white customer, oscillating between conflict/mutual misunderstanding and opportunity/mutual respect. Such an analysis ‘‘from within’’ allows us to understand better the development of the Chinese catering trade much more than looking at the number of restaurants and other quantifiable data would allow, if available and reliable. Since statistical data on Chinese restaurants in Belgium are not readily available, the analysis of the development is largely based on interviews with Chinese restaurateurs and their customers. In total, 22 Chinese and 20 Belgians were interviewed. A total of eight respondents belong to the first, 11 to the intermediate and three to the second generation. Through their voices more insights can be gained concerning the emergence, success and the main issues at stake of the catering sector. In order to do so, it is first important to contextualize Chinese migration to Belgium in the larger European setting. Among the Chinese in Diaspora the share of overseas Chinese residing in Europe is relatively small. According to recent estimates (Li, 2000) 2.8 million Chinese or 2.8 per cent of the total live in Europe. Their concentration in the catering sector seems to be the prevalent professional activity in most European countries, especially in the post-Second World War period. At present, they are still clustered in this sector. Then, the development of the Chinese restaurants will be discussed, leading to the social mobility of a large number of Chinese restaurateurs. This part analyzes the business strategies of the Chinese and the changes they adopt in response to changing lifestyles and tastes of the white customer. This endeavour has been to a large extent successful. This rather optimistic account is complemented with a more critical analysis of the ambivalent power relationship between the Chinese restaurateur and his white customer, where both are engaged in mutual sterotyping, or to borrow Frank Chin’s (Wong, 1993, p. 55) phrase, ‘‘Does she/he have to engage in ‘food pornography’?’’ Frank Chin, a cultural studies scientist highly critical of the essentialization of ‘‘Asianness’’ in western society, coined this term to underline the inferior position of immigrants, who are only accepted in the white society if they provide the white majority with ‘‘exotic’’ food and pleasure. What seems at first sight to be a social mobility through the ethnic food business is in fact, for him, a hidden form of oppression and intolerance to accept immigrants as full citizens. The core question of whether the Chinese restaurant sector represents a genuine business opportunity,

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generating social mobility for the immigrant group or rather a hidden form of racial discrimination, where an entire immigrant community is condemned to the ungrateful task of filling the insatiable cosmopolitan belly of the (post)modern urbanite, will be discussed below Mitigation background The number of Chinese in Europe is negligible within the Chinese Diaspora population worldwide. It accounts only for 2.9 per cent of the total. In Europe, the countries with significant Chinese groups are the UK (250,000), France (228,500), The Netherlands (132,000), Germany (100,000), Austria (41,000), Spain (35,000), Belgium (23,000) and Switzerland (13,900) (Li, 2000). From the perspective of the host society, the ethnic Chinese in Europe account for only 0.21 per cent of the total European population. Generally speaking, Chinese migration to Europe set off in the second half of the nineteenth century and at the onset of the twentieth century. The first wave consisted of young Chinese males from the coastal provinces of China, who worked aboard ocean steamers. The ship owners were enthusiastic about their industry and docility. European sailors loathed them because of the menace they posed to their own position. This hostility was reinforced since ship owners brought the Chinese in as strike breakers, as in the case of The Netherlands (Wubben, 1986). Many jumped ship in different European port cities including East London, Liverpool, Hamburg, Bremen, Rotterdam, Amsterdam, Antwerp, etc. and set up restaurants and laundries. The first Chinese in Antwerp and other cities were sailors. They originated mostly from the coastal provinces of Guangdong and Zhejiang. Thus prior to the Second World War, most Chinese were seamen, contract workers and ambulant peddlers, cooks, laborers and laundry workers. These temporary workers in fact replicated the pattern of the Chinese coolie trade or indentured labor migration in Southeast Asia and North America in the second half of the nineteenth century. Very few traces of this period have remained intact. However, they did pave the way for the chain migration in the post-Second World War period. The new migrants, members of the corporation lineages in the New Territories (Goody, 1990, p. 60), who claimed to have lived on the ancestral grounds for many centuries, found their way to Great Britain (Watson, 1975; Baker, 1994), The Netherlands (Pieke and Benton, 1998), Germany, France and Belgium (Pang, 1993) and, to a lesser extent, to the Scandinavian countries and Switzerland. Traditionally, this rural region was divided in mono-lineage villages, holding corporate property (Wesley-Smith, 1980, p. 65). The push factors in the home country, namely the New Territories in Hong Kong, center on economic and political issues. In the host society immigration policy was relaxed. Until 1974, foreigners could enter Belgium on a tourist passport, after which a medical examination was required to obtain the necessary documents (Kesteloot and Cortie, 1998). Chinese men, taking advantage of this situation, mostly started as kitchen help on arrival. After having worked for a few years, his wife and children joined him. When they had saved enough money they opened their

own restaurant, often with the financial and moral help of family or fellow Chinese restaurant lineage members. The concentration of the Chinese in Belgium in the catering ventures in business is by no means an isolated phenomenon. The group of Taiwanese and Antwerp the twice migrants, including the Chinese from Indonesia, the ethnic Chinese who arrive as the first Indo Chinese refugees in the mid-1980s, is relatively small (Pang, 1993, 1999). In 1981 the total number of Taiwanese was 609, and 151 decreased to 575 in 1990. They, too demonstrate an outspoken preference for the catering business. In the late 1970s and 1980s many settled Chinese from other European countries – from Great Britain and The Netherlands – decided to move on and some chose Belgium as a second immigration haven in their continuous search for good fortune. In the second half of the 1980s and the 1990s, many Mainland Chinese have remained in Belgium after the completion of their university studies. Owing to the tight labor market and their fragmented knowledge of the local language, quite a few sought their refuge in this sector. In recent years, undocumented migration from Fujian has also produced Chinese migrants in Belgium, working illegally in Chinese restaurants. The number is relatively insignificant in comparison to Great Britain and The Netherlands, where a sharp increase of Chinese asylum seekers has been registered in recent years. Moreover, most of the illegal Chinese who are being arrested in Belgium are in fact transit migrants (IOM, 2001). The success side: development of ethnic restaurants and economic advancement General Figures of the number of Chinese restaurants are not available. Unlike in The Netherlands, where every restaurant needs to register at the Chamber of Commerce, this is not the case in Belgium. The Netherlands counted almost 2,000 Chinese restaurants in 1995, whereas there were only 225 establishments in 1965 (Rijkschroeff, 1998). In 1994 I counted 235 restaurants in Antwerp, which makes up 28 per cent of the total 829 counted Chinese restaurants across the country. These figures are crude estimates, based on the listings in the Yellow Pages of the different provinces in 1994. First generation and small-scale restaurants Owing to the lack of schooling and access to sufficient capital, most immigrant business people tend to concentrate their activities in market segments with small-scale production, low in added value and labor intensive. These characteristics seem to fit the first generation of Chinese restaurant owners very well. Most first generation Chinese set up a modest restaurant with the assistance of fellow Chinese or fellow lineage members. The capital for starting a business was relatively low. In the beginning of the 1970s it amounted to about 500,000 Belgian francs (E12.500). Apart from the financial side, they could also count on the transfer of skills in how to run a restaurant within their own social network. Prior to the opening of a restaurant, Chinese male immigrants underwent an apprenticeship with fellow Chinese restaurateurs.

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Second, his former boss, family or fellow lineage members provided him with a menu card. A historical reading of these menu cards reveals the particularities of Chinese immigrant cuisine in Belgium and in The Netherlands. Menus dating from this period are marked by their exhaustiveness. This is to say that many dishes with minimal differences were offered. Third, all dishes were numbered since the Chinese cooks could not read Dutch or English and the waiters, mostly native Belgians, could not write Chinese. The particular link between Chinese food in The Netherlands and Belgium was mediated through the import of the Indonesian-Chinese restaurants’ menus from The Netherlands to Belgium. In The Netherlands a fusion between Chinese and Indian (Indonesian) food took place (Rijkschroeff, 1998, pp. 61-2). This explains why, on the menus we can find Indonesian terms denoting Chinese dishes. Moreover, the concept of ‘‘rice table’’ (rijsttafel) is of Indonesian origin, which itself is a creolisation of Indonesian, Portuguese and Dutch elements (Cwiertka, 1999). Rijkschroeff (1998, p. 62) informs us that: . . . the arrival of Indian (Indonesian) Dutch and repatriates resulted in the fusion of the two mentioned cuisines. Therefore dishes like sate´, gado gado, kroepoek or nasi goreng are included in the menu card of many Chinese restaurants. For instance the word ‘‘nasi’’ is originally an Indonesian word meaning cooked white rice. In the Chinese-Indonesian cuisine, it has assumed the meaning of fried rice.

The decoration of these restaurants was intended to underline the Chinese character of these restaurants, including Chinese black-lacquered lanterns, the ubiquitous dragon/phoenix representation, Chinese vases, etc. The names of these restaurants also had a distinctive Chinese character like Wah Kel (Huaqiao), China West (Zhongxi), Hong Kong (Xianggang). From the onset, wine and beer were served. This is perhaps a distinctive feature of Chinese restaurants in Belgium and in France, although more study is needed in order to support this view. Kitchen personnel were limited to a handful of cooks, while the remainder of the work was carried out by the parents, their children and other family members. The performance of family labor by children, or ‘‘helping out’’ (bangshou) (Song, 1997a, b), was essential to the development of Chinese immigrant entrepreneurship. This is not an isolated Chinese phenomenon. Literature on ethnic businesses, run by immigrant families, has marked out family labor as one of the ‘‘ethnic resources’’ (Waldinger et al., 1990; Light and Gold, 2000) within the political and institutional context (Kloosterman and Rath, 2000; Rath, 2000). Engagement in family labor might benefit the family business but it affects, among other things, the school performance of the children. Many of the older siblings discontinued schooling because they had to work in the family business. Many intermediate generation youngsters dropped out of school. The practice of the implicit ‘‘family work contract’’ (Song, 1997b) generates an intra-generational divide between older and younger siblings within one family in terms of identity and affiliation (Pang, 1998; Song, 1997a). The reason behind the success of the Chinese restaurants has often been all too easily attributed to ‘‘hard working Chinese’’ and their children, who offered food at very affordable prices; a fast and

no-nonsense service, characterized by a depersonalized but efficient ‘‘digitized’’ Chinese restaurant ordering system. ventures in The restaurant owners involved like to stress these points of relative Antwerp advantage vis-a`-vis other competitors in the catering business. However, changes in the larger society need to be taken into account, too. As Hooghe (1995) argued, radical and irreversible changes in Belgium have taken place in 153 the post-war period. Class differences have become blurred. A man in his mid30s, a cook by profession, started to eat Chinese food with his parents at the age of nine. His parents were working-class people. They were not rich enough to dine out in fancy restaurants. However, the Chinese restaurants offered an attractive alternative: We went to W.K. I believe it was one of the first Chinese restaurants in Antwerp. My parents took me along . . . Chinese restaurants were affordable for my parents. These rapid social and cultural changes in the host society seem to be reflected in the steep growth of the number of the Chinese restaurants and the solid position of Chinese immigrant cuisine in the general catering business and in the daily diet of the dominant group.

The intermediate generation, the upgrading process and proliferation of Chinese restaurants and Chinese food Changes in the Chinese food sector took place in the mid-1980s. Whereas business took off in the decade of the 1970s, stagnation marked the first half of the 1980s until the latter part of the decade. In order to reverse the recession, the Chinese adopted different strategies: first, new dishes like dim sum (dianxin), new ingredients including scallions, ginger, black beans, etc. and new ways of cooking like steaming in order to prove the ‘‘authenticity’’ of their food. As for beverage, expensive wines were added to the wine list. Some of the new generation Chinese restaurant owners, often the older siblings of the intermediate generation, started to consume more wine themselves while visiting other restaurants serving French, Italian, Thai and Japanese food. Renovation of the interior in terms of upgrading and expansion was another option to remain in business. For instance, the capital for setting up a successful Chinese restaurant in a suburb in 1987 amounted to around 5 million Belgian francs (E125.000), excluding the property price. This figure includes the decoration, the installment of equipment and other objects in the kitchen and the restaurant. These restaurant owners are generally sons, and rarely daughters of immigrant Chinese, who inherited the restaurant from their parents or who started a new one with the financial, moral and/or practical support of their parents. Since they were more integrated in the host society than their parents, they have easier access to information, management skills, market demands and changes in lifestyle than the first generation. They tend to use more automated equipment such as professional dishwashers, refrigerators, and computers for accounting, ordering, and other purposes. There was also a tendency to give friendly but formal service to customers in similar ways as in some highbrow French and Italian restaurants. The upgrading tendency has also affected the prices of Chinese food, which have risen. In other words, Chinese food did no

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longer stand for cheap food and huge portions. In the period 1987-1992 business figures in this sector have increased significantly. Parallel to the upgrading process, the number of Chinese take-aways has taken off. This formula was introduced by the British Chinese, who began to arrive in the late 1970s and the 1980s, and aptly adopted by late entrants in the Chinese catering business. It requires less investment in terms of human resources and financial means. These take-aways did not only emerge in the major cities but also in small towns and more remote areas. The proliferation, the increasing popularity of Chinese immigrant food and its incorporation into the daily diet of the average Belgian explain why mainstream supermarkets and Belgian restaurants, cafe´s and pubs offer Chinese immigrant food as ‘‘plat du jour’’. In recent years, the interest for the ‘‘Orient’’ or all things ‘‘Asian’’ has been very prominent in all realms of life, including lifestyle, and not merely in the food sector. In the global culinary world cooks of Chinese descent but living in the West, like Ken Hom and Nancy Lam, have reached celebrity status. Ken Hom is Asian American and a prominent food and restaurant consultant. His BBC television series (including Ken Hom’s Hot Wok) has made him one of the best-known authorities on Chinese food. Recently, he has moved on to Thai food. Nancy Lam is host of an Asian cooking program on UK’s Channel 5, also called The First Oriental Spice on television. The hype around Asian food does not only revolve around eating Asian food, but also implies the usage of the right utensils needed for the preparation of Asian dishes. Asian utensils are now readily available in trendy kitchen shops, including the wok, bamboo steamers, chopsticks, bowls (for rice, soup and all kinds of noodles), Japanese knives, etc., and increasingly so in mass market chain stores. This ‘‘exotic’’ image of the East has been nurtured by popular Asian movies dwelling on food, identity and family relations such as Ang Lee’s movie Man, Woman, Eat, Drink. Recently, restaurants offering Asian food have emerged in different city centers across the country. Owners of these restaurants are native Belgians, while the staff consists of Asians such as Cantonese Chinese cooks or adopted Belgians of Korean origin. Through the Asian food, the staff of Asian ethnic background and the interior, these restaurants succeed in evoking an Asian mood. Very few Chinese restaurants are active in this new opportunity presented by newly emerged post-industrial symbolic economy. When I asked intermediate generation Chinese about these new opportunities in the newly emerging segment of fusion food, voices range from skepticism to uncertainty: I don’t believe in this new formula. It’s a fashion. This will pass. These young people, who go to these new places, they don’t have much money to consume. They eat a bowl of noodle and have a beer. They don’t drink ape´ritif, wine and liquor like in a restaurant. We make the most money out of the drinks. No, my husband wants to make the restaurant bigger with more window seats (LH). My sommelier advises me to make my menu shorter in bistro style. Next year my old waiter will retire. My son will then work full-time. Then he has to come up with new ideas. After all he has studied in a hotel school and he’s young so he should know what people want (TP).

Some believe in the new concept but hesitate to take action for a variety of Chinese restaurant reasons: ventures in I think this new style is good and I can do it. But then we have to move to the center of the city. In that case we don’t know what to do with our restaurant. The property and the business are ours. Of course we can sell everything. But who would want to buy a Chinese restaurant now? (YY). A small restaurant with a limited menu choice in a trendy neighborhood must work (NW).

Others think that through the ubiquity of Chinese restaurants and the acquired position of Chinese immigrant cuisine in the mainstream food culture, business will remain relatively stable. The recent fusion food hype is a novelty, which will not lead to the extinction of Chinese immigrant cuisine, given the entrenchment in the daily diet habits of the dominant group. Overall, Chinese immigrant cuisine was accepted by a wide group of white people after a hesitant start. The fact that a very large share of the total Chinese population, including both first and intermediate generation, is engaged in this sector testifies the success of ‘‘exotic immigrant’’ food. When the first Chinese restaurants emerged, set up by immigrant Chinese, the cultural stereotypes of the Chinese and more generally the ‘‘Orient’’ were hyperbolically enlarged. The restaurant business offers the Chinese, both first and succeeding generations, a means of survival and in most cases a means of social mobility. Some are, of course, more successful than others, but the general picture is that of financial advancement for the Chinese as a group. Social exchange: ambivalence and ‘‘food pornography’’ Ambivalent relationship In order to nuance the success side of the Chinese restaurant sector, the negative stereotyping and ‘‘food pornography’’ will be discussed in this part. When I interviewed the first native Belgians eating Chinese food, they often raised the point of the ‘‘foreign, but not too foreign’’ aspect of Chinese food. The high level of adaptation of ethnic food is to a high degree determined by the consumers. A retired electrician, Mr A, clearly stated this reason for starting to eat Chinese since 1949: My father is Dutch and my mother is Walloon (southern part of Belgium). As for me, I’m born and raised in Antwerp. My parents always ate the same things like meatballs with tomato sauce. It was not bad but I wanted a change. I don’t only eat Chinese but I also like Mexican, Indonesian, and other ethnic food.

The man, whose parents were of working class background, also remembered the concern his mother had when the family started to dine at Chinese restaurants: They didn’t know much of Chinese food. I still remember my mother asking the waiter whether it was OK for a small boy like me to eat Chinese food so often?

Despite the apparent success, the relation between the Chinese entrepreneur and his customer was to say the least shallow and fickle, if not ambivalent.

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This period is marked by a high degree of distrust between the Chinese and their customers. For instance, the degree of acceptance of certain Chinese foodstuffs, however, has been a slow process. A Chinese female restaurant owner (36 years old) still recalls vividly how certain foodstuffs have been gradually integrated in the menu of Chinese restaurants: When I was 12 or 13 years old, I remember still very well that I was carrying a dish with black fermented soybeans in the restaurant. The dish was part of our evening dinner and not a dish prepared for clients. But one of the customers complained about the bad smell of that dish. So I was ordered by my parents to go back to the kitchen immediately . . . In thinking back this is funny. I have a restaurant now. Most customers, especially the high middle class ones, love black soybeans. Yes, things have changed a lot (YY).

As Miller (1997) instructs us, disgust is a shifting emotion, often associated with boundaries between us and them. In eating culture practices these boundaries are highly dynamic. With the growing mobility and the rapid dissemination of cultural goods and services, including foodways, the taste of people living in post-industrial western societies has become more cosmopolitan, always in search of novelties. Apart from offensive odors and general stereotypes about the Chinese, suspicion towards Chinese food remains strong. A middle-aged woman M (45 years old), one of the oldest second generation Chinese, recalled the skeptical attitude of Belgian customers towards the meat served in Chinese restaurants: Sometimes the newspapers write very wild things about Chinese restaurants. There was once this newspaper article that Chinese restaurants were serving cat meat. That’s complete nonsense. Why would we serve cat meat? I don’t understand how they can write these things. Perhaps because we Chinese, we cut up the chicken meat into small pieces and they don’t recognize it? And they think we’re serving them cat???

In a reverse way the Chinese also harbor prejudices towards their customers. Some have a rather stereotypical view of their customers. For instance, the main character in the novel Sweet Sour by Timothy Mo refers to the food served to English customers ‘‘as lupsup (Cantonese for rubbish), fit for ‘foreign devils’’’. Despite the misunderstanding between the two parties and the resistance of the white customer to extremely foreign tastes and odors, the first Chinese restaurants serving highly adapted Chinese meals seem to meet a demand in the market. The highly adapted or ‘‘bastardized’’ form of Chinese immigrant food is a strategy Chinese immigrants adopted to suit the palate of the native customer in order to survive. In a similar vein despite the different location, Hom’s reflection on the divided menu in his uncle’s restaurant in Chicago clarifies my point: In my uncle’s restaurant, we had two menus. In those days, we knew that Americans would not savor braised sea cucumber, bird’s nest soup with egg white, or braised shark’s fin. These were delicacies enjoyed by our knowledgeable Chinese patrons but would most certainly have driven our American customers away. So we had a menu for them (Hom, 1997).

This explains why Chinese restaurant owners prefer to play safe by Chinese restaurant incorporating Belgian dishes such as steak with fries in the menu. An ventures in important point to note is the choice of rice or fries with meals. It seems that Antwerp Belgians are not bothered by the combination of Chinese food with fries. At any rate, many first generation Chinese could live well from their business and could support their children (sons) in schooling and in 157 professional life, mostly in the same sector. The democratic prices definitely played a role. Furthermore, the convenience and the relaxed mood in Chinese restaurants are other factors accounting for success in the catering business. Eating lunch in a Chinese restaurant has become a weekly routine for an elderly woman, R: When we were still working in our business (wholesale bakers) I insisted on having a day off on Sunday so that I don’t have to cook. So on Sundays we always go to a Chinese restaurant. For us Sunday means Chinese food (R).

Sundays attract a specific group of clients, mostly elderly couples, who after church eat at their customary Chinese restaurant. As customers they display a high degree of loyalty. Some of them order the same drinks and meals week after week. Over time they have developed close ties with the Chinese owners. Personal and family events such as birthdays, graduation and promotion, but also problems such as illness, accident or death, are shared with the Chinese owners. These quasi-friendship relations are also fostered with other customers. When I interviewed a middle-class couple, a bank director and an administration officer in the diamond sector within the 40-45 age bracket, they sketched their dining experience as follows: We have been eating here for almost 23 years. (The husband:) At the beginning I always ate chicken with curry. Now I’ve switched to chicken with Madras curry . . . The wine is very good here. (The wife:) What I like here very much is the finishing touch. There are always fresh flowers on the table. The table cloths are clean and crisp. The background music is soothing . . . The service is attentive. They are always there to pour wine in our glass. We know the waiter very well and he us. So when we come here, we feel at home. People know who we are.

Tastes change gradually over time, but some eating patterns seem resistant to change. In the context of Chinese immigrant cuisine, fries are still on the menu despite the increasing sophistication of the customer, all the more since fries ( frites) are considered to be indigenous and deeply ingrained in the local food folklore. Other dishes such as steak seem to have disappeared in most Chinese restaurants. One restaurant owner gave me this account of why he dropped that item from the menu: When my father was running this restaurant, people could order steak with fries. When I took over the restaurant about 11 years ago, I also took over the menu. But I’ve had complaints from different clients that the steak was not cooked the right way. I got a bit frustrated and I decided not to put steak on the menu anymore since this is a Chinese restaurant.

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Food pornography Frank Chin’s concept of ‘‘food pornography’’ implies in the strict sense that Chinese immigrants or any other ethnic group are only accepted when they provide the majority exotic and spicy pleasures. Interpreted in a broader social way, the only option for immigrant groups to get a foothold in a white dominated society is through the activities of reifying perceived differences and aggrandizing one’s other-ness against their will. Unlike sexual pornography, which implies the straightforward exchange of sex for money, ‘‘food pornography’’ functions more indirectly, exhibiting a subtler dynamic. At first sight those engaging in ‘‘food pornography’’ appear to make promotion and advancement, whereas in reality they are forced to fulfill the crave of the majority group for ‘‘exotic’’ food. It should be noted that the notion of ‘‘exoticness’’ or the degree of ‘‘other-ness’’ is a construction, and thus highly variable, fluid and temporary. To illustrate: the first generation Chinese restaurants are clearly ‘‘exotic’’ for the native customers since eating in such an environment is an entirely new event, despite the fact that the food is highly adapted to local taste. It is temporary as the notions of ‘‘exoticness’’ change over time. This incisive critical analysis calls for urgent reflection and actions to broaden the opportunities and to improve the skills of immigrants. Do Chinese entrepreneurs, first and some of the intermediate generation, engage in ‘‘food pornography’’? The answer might be affirmative from an outsider’s point of view. Indeed, given the precarious social economic position, the generally low educational background and the lack of financial means – especially among the immigrant group – they had no other professional choice than opening a restaurant. There is a manifest inequality in terms of power between the Chinese and the majority group. While the white customer had the choice of eating or not eating Chinese food and demanded ‘‘foreign, but not too foreign’’ food, the Chinese had to meet their demands and stick to their job for sheer economic survival. In that sense, one can speak of ‘‘food pornography’’, especially when misunderstanding, racism and hostility arise between the owner and the customer. Many intermediate generation Chinese restaurateurs were pushed into the catering sector by being ‘‘victimized’’ as children of small business people. Owing to the informal family work contract and often discrimination in school, they drop out of school with the only professional option of working in their father’s or another relative’s restaurant. Some restaurateurs often feel imprisoned in the small community of Chinese restaurateurs. In general, despite their financial success, they seem to suffer from an inferiority complex for running a Chinese restaurant. The term ‘‘a chop chuey joint’’, which is widely used within the Chinese community, supports the negative outcome of the apparent success of the restaurant sector. Running a small business does not render them much social prestige within the Chinese cultural system, privileging scholarship and academic degrees (Li, M.H., 2000). The metaphor of ‘‘chop chuey’’ representing the fragmented and the ‘‘unwholesome’’ character of Chinese immigrant food has been used by many:

Of course, this style of cooking did not produce genuine (let alone gourmet) Chinese food – it was much more like the makeshift dishes popularly believed to have been invented during the Californian gold rush and known by the generic term chop chuey (a corruption of the Cantonese jaap sui, bits and pieces) but it found ready favor with unsophisticated British palates (Baker, 1994, p. 295).

Having made this observation, I hasten to add that this low self-esteem is particularly prominent among the less successful business people. More successful ones seem to harbor a milder view of being a Chinese restaurateur. Moreover, over time they have developed a network of business acquaintances and personal friendships through their business. In these cases, ‘‘food pornography’’ is out of the question. A second point contesting the idea of ‘‘food pornography’’ is the family business strategy of calculated utilitarianism. One can do a job for instrumental reasons, such as earning enough money to invest in the education of the children, which is the ultimate goal of this family business strategy. Their perseverance lies in the family strategy to make a living for all members, creating educational opportunities for the children and enough savings for their own old age. In other words, in sticking to an unpleasant job, if that is effectively the case, they would refer to instrumentalism as part of the general family business strategy. Third, in the post-industrial symbolic economy (Sorkin, 1994; Hall, 2000; Rifkin, 2000; Pang, 2001), market forces have entered many realms of social life such as the commodification of emotions, family values, children, youth, refugees, relationships, etc. After all the so-called fusion food invented by whites and colored cosmopolitans to seduce the postmodern urbanite captures into this crave for difference, the ‘‘out of the ordinary’’, which is basically the definition of exoticism. Evidently the owners of fusion food restaurants do not feel exploited nor looked down on by their customers. Concluding remarks The main question in this article revolves around the outcome of the apparent success of the Chinese restaurant business in Antwerp through interviews and participant observation. Does the restaurant business offer an opportunity for the Chinese immigrants or is it a form of ‘‘food pornography’’? Although the location is limited to one city, the findings might be transferable to other European cities with the same group of Chinese immigrants, equally engaging in the catering sector. First, the emergence, development and difficulty of the catering sector are discussed, layered with the voices of the restaurateurs and their customers. In this development, the immigrant Chinese seem to lose out on the latest trend of fusion food in the postmodern symbolic urban economy. However, Chinese restaurants and take-aways are still popular among large segments of the general population. Some of the immigrant Chinese dishes have gone mainstream since they are readily available in major supermarkets, mainstream pubs and other places. Second, the notion of ‘‘food pornography’’, coined by Frank Chin, is brought into the picture. Are Chinese restaurateurs forced to do the ‘‘lousy’’ job of satisfying the spoiled taste of the white majority?

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Instead of replying to this question, it is more useful to underline the instrumentalist family business strategy, privileging the instrumental accumulation of financial resources for investment in education and other areas. Given the strong undertone of repression and denial of identity in the notion of ‘‘food pornography’’, it seems apt to conclude that food pornography in its extreme form is not applicable in the Belgian case. However, the ambivalent social relations with the customers and the impact on a possible negative self-identity are realities which need to be accounted for. To conclude, one can argue that the Chinese immigrants have seized the opportunity of a market for ‘‘exotic’’ food and continue – or at least some of them – to do so by adapting to new market trends. As an immigrant group they have certainly gained social mobility in Belgium. References Baker, H. (1994), ‘‘Branches all over: the Hong Kong Chinese in Britain’’, in Skeldon, R. (Ed.), Reluctant Exiles? Migration from Hong Kong and the New Territories, Hong Kong University Press, Hong Kong. Benton, G. and Pieke, F. (Eds) (1998), The Chinese in Europe, St Martin Press, New York, NY. Bonacich, E. and Modell, J. (1980), The Economic Basis of Ethnic Solidarity: Small Business in the Japanese American Community, University of California Press, Berkeley, Los Angeles and London. Cwiertka, K.J. (1999), ‘‘The making of modern culinary tradition’’, PhD dissertation, University of Leiden. Goody, J. (1990), The Oriental, the Ancient and the Primitive. Systems of Marriage and the Family in the Pre-industrial Societies of Eurasia, Cambridge University Press, Cambridge, New York, Port Chester, Melbourne, and Sydney. Hall, P. (2000), ‘‘Creative cities and economic development’’, Urban Studies, Vol. 37 No. 4, pp. 639-49. Hom, K. (1997), Easy Family Recipes from a Chinese-American Childhood, Alfred A. Knopf, New York, NY. Hooghe, M. (1995), Het wordt nooit meer als vroeger. 1945-1995. Belgie¨, een halve eeuw modern, Van Halewyck, Leuven. IOM (2001), Trafficking in Unaccompanied Minors for Sexual Exploitation in the European Union, IOM, Geneva. Kesteloot, C. and Cortie, C. (1998), ‘‘Housing Turks and Moroccans in Brussels and Amsterdam: the difference between private and public markets’’, Urban Studies, Vol. 35 No. 10, pp. 1835-53. Kloosterman, R. and Rath, J. (2000), ‘‘‘Mixed embeddedness: markets and immigrant entrepreneurs’’, paper presented at the conference The Economic Embeddedness of Immigrant Entrepreneurs’ of the Thematic Network Working on the Fringes: Immigrant Businesses, Economic Integration and Informal Practices, Jerusalem, June 17-20. Lau, S.K. (1981), ‘‘Utilitaristic familism: the basis of political stability’’, in King, A. and Lee, R.P.L. (Eds), Social Life and Development in Hong Kong, Hong Kong University Press, Hong Kong. Li, M.H. (2000), We Need Two Worlds. Chinese Immigrant Associations in a Western Society, Amsterdam University Press, Amsterdam. Li, P. (2000), ‘‘Chinese Diaspora in occidental societies: Canada and Europe’’, paper presented at the Conference Recasting European and Canadian History. National Consciousness, Migration and Multicultural Lives, Bremen, Germany, 18-21 May.

Light, I. and Gold, S. (2000), Ethnic Economies, Academic Press, San Diego, CA. Miller, W.I. (1997), The Anatomy of Disgust, Harvard University Press, Cambridge, MA. Pang, C.L. (1993), ‘‘Tussen inpassing en identiteit’’, De Chinese gemeenschap in Belgie¨, HIVA, Leuven. Pang, C.L. (1998), ‘‘Invisible visibility. Intergenerational transfer of identity and social position: Chinese women in Belgium’’, Asian and Pacific Migration Journal, Vol. 7 No. 4, pp. 433-52. Pang, C.L. (1999), ‘‘Why are the Chinese ‘invisible’ and/or ‘unproblematic’ in Belgium?, Exploring some viable explanations’’, Ethnologia, Vol. 9 No. 11, pp. 105-20. Pang, C.L. (2001), ‘‘Ethnic versus creolised/cosmopolitan food. The case of Chinese restaurant ventures in Antwerp’’, paper presented at the workshop Asian Immigrants and Entrepreneurship in the European Community, Nijmegen, 9-11 May. Parker, D. (1994), Through Different Eyes. The Cultural Identity of Young British Chinese People, Avebury, Aldershot. Pieke, F. (1988), De positie van de Chinezen in Nederland. Documentatiecentrum voor het huidige China, Sinologische Instituut Rijksuniversiteit Leiden, Leiden. Pieke, F. and Benton, G. (Eds) (1998), The Chinese in Europe, MacMillan Press, Houndsmilles. Portes, A. and Zhou, M. (1991), ‘‘Gaining the upper hand. Old and new perspectives in the study of the foreign-born minorities’’, Conference paper, Joint Center for Political Studies, Washington, DC. Rath, J. (Ed.) (2000), Immigrant Business. The Economic, Political and Social Environment, MacMillan Press, London. Rifkin, J. (1998), The Age of Access. The New Culture of Hypercapitalism. Where All of Life is a Paid Experience, Jeremy O. Tarcher/Putnam, New York, NY. Rijkschroeff, B. (1998), Etnisch ondernemerschap. De Chinese horecasector in Nederland en in de Verenigde Staten, Labyrint Publication, Capelle a/d Ijssel. Smart, J., Huang, C., Pang, C.L., Kuah, K.E. and Smart, A. (1999), ‘‘Negotiating Chinese immigrant food culture in a global setting’’, IIAS Newsletter, 19 June, pp. 30-1. Song, M. (1997a), ‘‘You’re becoming more and more English: investigating Chinese siblings. Cultural identities’’, New Community. Vol. 23 No. 3, pp. 343-62. Song, M. (1997b), ‘‘Children’s labor in ethnic family businesses: the case of Chinese take-aways in Britain’’, Ethnic and Racial Studies, Vol. 20, p. 4. Sorkin, M. (Ed.) (1994), Variations of a Theme Park. The New American City and the End of Public Space, Hill and Wang, New York, NY. Van der sijde, R.R. (1983), Chinees-Indische restaurants, Bedrijfsschap Horeca Brochures, Den Haag, No. 129. Waldinger, R., Aldrich, H. and Ward, R. (1990), Ethnic Entrepreneurs. Immigrant Business in Industrial Societies, Sage Publications, Newbury Park, CA, London. Watson, J. (1975), Emigration and the Chinese Lineage. The ‘Mans’ in Hong Kong and London, University of California Press, Berkeley, CA, London. Wesley-Smith P. (1980), Unequal Treaty 1898-1997. China, Great Britain and Hong Kong’s New Territories, Oxford University Press, Hong Kong. Wong, S.-L.C. (1993), Reading Asian American Literature. From Necessity to Extravagance, Princeton University Press, Princeton, NJ. Wubben, H.J. (1986), Chineezen en andere Aziatische ongedierte. Lotgevallen van Chinese immigranten in Nederland, 1911-1940, Walburg Press, Zutphen. Zhang, K.Q. (1999), ‘‘Problems and strategies of Chinese immigrants: a study of the restaurant sector in the Dutch labor market’’, Research on immigration and integration in the Metropolis, working paper series, Vancouver Centre of Excellence.

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Eran Razin Department of Geography, Hebrew University, Jerusalem, Israel Keywords Immigrants, Entrepreneurialism, Ethnic groups, Economic conditions Abstract Concludes that the impact of the economic context on entrepreneurship among immigrants is group specific. The concepts of embeddedness, which acknowledges that economic action is embedded in the structures of social relations, and mixed embeddedness, which incorporates both roles of co-ethnic networks and linkages between immigrants and the broader society, could have a major role in explaining these variations. However, these concepts could be criticized as being fuzzy and hard to verify empirically, and as presenting an idealistic image on the favorable role of intra-ethnic networks. Case studies demonstrate various aspects of the economic milieu that influence immigrant enterprise and provide some evidence for the embeddedness and mixed embeddedness concepts, although not fulfilling the need for a broader and more formal verification of arguments based on these concepts. An imbalance between too intensive intra-ethnic ties and lack of sufficient instrumental inter-ethnic networks is revealed in some of the studies.

International Journal of Entrepreneurial Behaviour & Research, Vol. 8 No. 1/2, 2002, pp. 162-167. # MCB UP Limited, 1355-2554 DOI 10.1108/13552550210428061

The economic context of economic embeddedness The propensity of immigrants to turn to self-employment as a route of absorption and upward mobility in their host society is influenced substantially by opportunities offered by the economic environment at the national and local contexts. Such opportunities are an outcome of the structure of the local economy and of legal-institutional factors that influence the position of the small-business economy in general and the access of immigrants into small-business in particular. These influences of the external environment are nevertheless group specific, at least to some degree. Different immigrant groups could be influenced in different ways by the same economic milieu. This interaction effect of location and ethnicity on immigrant enterprise was emphasized by Razin and Light (1998), who provided evidence for unique spatial variations in self-employment among specific immigrant groups. This approach emphasized that the influence of the local economy on immigrant enterprise depends not only on the local economic structure, but also on traits of the local immigrant community, such as location-specific ethnic networks. Discrimination against specific groups is another attribute of both the community and the absorbing environment that creates group-specific spatial variations in self-employment. In particular, local variations in self-employment among groups that differ from the mainstream population in race, religion or appearance could differ markedly from local variations among the rest of the population (Razin and Langlois, 1996). These groups could have more developed location-specific ethnic networks and have This article is part of a special issue of papers entitled ‘‘The economic context, embeddedness and immigrant entrepreneurs’’ edited by Jan Rath, Robert Kloosterman and Eran Razin.

particularly inferior access to prestige and power positions occupied by the mainstream population in smaller and ethnically homogeneous localities. The complex influence of opportunity structures and ethnic traits on immigrant enterprise is associated with the introduction of the concept of embeddedness into the study of immigrant entrepreneurs. The notion of embeddedness acknowledges that economic action is embedded in structures of social relations. Granovetter (1985) notes a tendency to overemphasize the embeddedness of economic activity in social relations (particularly kinship obligations) in traditional societies and to under-emphasize this role of social relations, leading to trust or to malfeasance, in modern societies. Kloosterman et al. (1999) argue that the focus of the embeddedness concept on socio-cultural traits of the ethnic community itself is too narrow. They thus introduce the concept of mixed-embeddedness that incorporates both the co-ethnic social networks and the nature of linkages between migrant entrepreneurs and the economic and institutional context of the host society. The concepts of embeddedness and mixed-embeddedness add an important explanatory framework to the unique impact of the specific urban economic milieu on immigrant entrepreneurship. It is not only the opportunity structure that counts, but also location-specific traits of the immigrant community and the complex ways in which immigrant businesses are inserted into the sociocultural and institutional context of the host society. Embeddedness – a fuzzy concept? Adding the concept of embeddedness to the more straightforward concepts of opportunity structure, class and ethnic resources presents a challenge. Simply taken, one can refer to economic embeddedness as the economic context for immigrant entrepreneurship, at the national and local levels, and how it interacts with traits of the immigrants themselves, as individuals and groups. However, embeddedness could fall into the category defined by Markusen (1999) as fuzzy concepts. These are characterizations lacking conceptual clarity which are difficult to operationalize. Specifically, Markusen discusses the concept of flexible specialization and its re-agglomeration hypothesis, the concept of world cities and, most relevant to embeddedness, the literature on networking and co-operative competition in industrial districts such as the Third Italy, Baden Wurttemberg and Silicon Valley. She criticizes much of the literature that uses these concepts extensively without bothering to define and validate them beyond anecdotes or case studies. Critique of the concept of economic embeddedness is twofold: (1) The fuzziness of the concept and the difficulty defining and validating the phenomenon beyond descriptive case studies. (2) The idealization of the embeddedness model, concerning the conducive impact of social networks. Critique of the first type is part of a broader critique that concerns the cultural post-modern turn that took place in human geography and other social sciences

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in the 1990s. This turn has been associated with a rejection of the notions of science, objectivity and abstract generalizations in favor of subjective approaches that focus on a complex linguistic, conceptual and terminological web that treat theory and concepts as a sort of intellectual game, increasingly detached from real world problems (Hamnett, 2001). It has been argued that these approaches have retreated from rigorous empirical research of practical social issues into ‘‘sexy’’ philosophical, linguistic debates (Martin, 2001). While emphasizing notions of liberation, empowerment and giving voice to the weak and excluded, these approaches are e´litist in practice, reinforce privileges of the intellectual e´lite, are irrelevant to the unprivileged, and do not influence politicians and big business. Hamnett (2001) thus emphasizes the need to explain, and possibly even help to change, the world we live in not as an intellectual word game for the privileged but disenfranchised few. Similarly, Martin (2001) calls us to refocus on concepts such as class, inequality and conflict, rather than excessively emphasizing cultural, economic geography that downplays the significance of economic theory. Storper (2001), who also criticizes the poverty of the cultural turn in radical theory, calls for a need to add macro-level descriptions of society to the micro-level common in the cultural discourse. The concept of embeddedness is not at the heart of the cultural post-modern turn. However, one could seek to examine whether it contributes to innovative theoretical debates on immigrant enterprise and provides a new perspective for empirical examinations, or whether it merely introduces fuzziness to the study of the phenomenon and makes these studies less accessible to broader audiences of policy makers and the immigrant entrepreneurs themselves. Critique of the second type does not challenge the legitimacy of using the concept of embeddedness, but specifically challenges the ideal model that it often represents. Taylor (2001), for example, criticizes the ideal view of embedded local economic growth based on trust, reciprocity and loyalty among small business enterprises, which lead to cooperation, collaboration and the creation of social capital and ‘‘institutional thickness’’. This view conceals significant exclusionary tendencies of entrepreneurs from inter-local, inter-ethnic networks, especially those orchestrated by transnational corporations. In a way, this critique is linked to the mixed embeddedness concept that criticizes focusing on co-ethnic linkages while ignoring external ones. The mixed embeddedness notion could also be viewed as providing a macro-level perspective that is missing in the ‘‘pure’’ embeddedness concept, and as adding reference to broad socio-economic, political and institutional structures with their ‘‘real-world’’ policy relevance. The contributions in this special issue provide insights on the above issues: the impact of the economic milieu on entrepreneurship among immigrants, the validity of the embeddedness and mixed-embeddedness hypotheses and their empirical measurement. The evidence The case studies presented in this special issue demonstrate the influence of various aspects of the economic milieu on immigrant enterprise. These include

the impact of economic fluctuations (Peters) and of structural changes, some of them associated with globalization processes. These economic factors interact with institutional ones; for example, globalization could influence deregulation and immigration policies, which in turn influence immigrant enterprise (Collins). The role of the institutional milieu is particularly emphasized in the case of The Netherlands (Engelen), where the Dutch consensus-oriented management style has created a non-conducive environment for innovation, despite deregulation trends. Barrett et al. portray an economic milieu in Britain that is more favorable for the entry of immigrants into small business than in continental Europe, but to niches that do not create opportunities for upward economic mobility. This economic milieu leads to the concentration of immigrant entrepreneurs in trades that are in decline, labor intensive or both. Businesses in these niches face acute competitive pressures that are exacerbated by the growing presence of corporate rivals in many markets. The economic and institutional milieu limits diversification and makes it difficult for immigrant entrepreneurs to break out from their traditional niches both sectorially and geographically. Hiebert emphasizes a particular trait of niches in which immigrants concentrate on their prospects to turn to self-employment: rates of selfemployment in each niche. Thus, immigrants that are drawn to niches that offer few opportunities for self-employment have low rates of self-employment. The penetration of immigrants into particular niches is partly a result of qualifications possessed by members of the group and partly a result of the opportunity structure at a particular moment when the early wave of immigrants arrived. The role of the economic context on Chinese immigrants in the restaurant business is emphasized in two of the papers. Pang notes that immigrants are driven by local markets into their stereotypical niches, while having to adjust their product to local taste rather than provide the ‘‘real thing’’. Leung notes that the concentration of Chinese in the restaurant niche is not only a product of unique ethnic resources, but is influenced also by the external environment: limited access to alternative employment, changing consumer demands and market conditions. The first factor explains why Chinese are driven into the restaurant niche, whereas the later factors explain how they adjust within their niche in response to changes in the economic milieu, such as the increasing demand and proliferation of fast food outlets. The case studies also provide insights on the embeddedness and mixed embeddedness concepts. The continued concentration of immigrants of specific groups in specific niches (Hiebert) is largely explained by the role of ethnic networks in channeling new entrants into the labor market – in line with the embeddedness framework. This role of ethnic networks in influencing the fate of immigrants in the labor market is also emphasized by Peters, who distinguishes first generation pioneers, first generation immigrants who arrive into an ethnic community that had already developed ethnic niches, and second generation children of immigrants. Each of these groups faces a different

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environment in terms of the existence and nature of ethnic networks that channel into specific segments of the labor market. Peters also argues that an historical perspective and the study of various types of human agents are needed to expand the perspective of the mixedembeddedness concept. Nevertheless, two of the studies in the present issue provide clear evidence supporting the concept of mixed-embeddedness, both arguing for imbalance between too intensive intra-ethnic networks and lack of sufficient inter-ethnic networks. Barrett et al. argue that co-ethnic ties form an important role in immigrant enterprise, but a close dependence on community linkages is as problematic as it is beneficial. These ties contribute to the entry of immigrants into small business in Britain, but the lack of instrumental interethnic networks limits immigrants within the small business economy. The examination of Arab entrepreneurs in Israel by Schnell and Sofer provides perhaps the clearest example for the mixed-embeddedness concept. Arabs face the problem of over-embeddedness when it comes to intra-ethnic networks and under-embededness when it comes to contacts with the broader society. Over-embeddedness refers to too ‘‘pressing’’ ethnic networks of mutual aid that could drain the entrepreneur from his profits and lead to the employment of unnecessary or unqualified relatives, thus preventing ethnic entrepreneurs from exploiting opportunities and expanding. Obligations and indebtedness to extended family and clan can form formidable obstacles for efficient functioning and capital accumulation by ethnic entrepreneurs. Underembeddedness refers to the failure to exploit external networks as an economic advantage: lack of instrumental inter-ethnic networks that are needed, for example, to break out of traditional ethnic niches. In summary, insights provided by the case studies in this issue on the role of the economic context of immigrant enterprise do contribute to the clarification of the concepts of economic embeddedness and mixed embeddedness, making them less fuzzy in their definition and more useful in both theoretical and practical respects. However, the case study approach that is largely based on qualitative evaluations still leaves unanswered the challenge of a broader and more formal empirical verification of these concepts and the arguments based on them. References Granovetter, M. (1985), ‘‘Economic action and social structure: the problem of embeddedness’’, American Journal of Sociology, Vol. 91, pp. 481-510. Hamnett, C. (2001), ‘‘The emperor’s new theoretical clothes, or geography without origami’’, in Philo, G. and Miller, D. (Eds), Market Killing, What the Free Market Does and What Social Scientists Can Do About It, Longman, Harlow. Kloosterman, R., van der Leun, J. and Rath, J. (1999), ‘‘Mixed embeddedness: (in)formal economic activities and immigrant businesses in The Netherlands’’, International Journal of Urban and Regional Research, Vol. 23, pp. 252-66. Markusen, A. (1999), ‘‘Fuzzy concepts, scanty evidence, policy distance: the case for rigour and policy relevance in critical regional studies’’, Regional Studies, Vol. 33, pp. 869-84.

Martin, R. (2001), ‘‘Geography and public policy: the case of the missing agenda’’, Progress in Human Geography, Vol. 25, pp. 189-210. Razin, E. and Langlois, A. (1996), ‘‘Metropolitan characteristics and entrepreneurship among immigrants and ethnic groups in Canada’’, International Migration Review, Vol. 30, pp. 703-27. Razin, E. and Light, I. (1998), ‘‘Ethnic entrepreneurs in America’s largest metropolitan areas’’, Urban Affairs Review, Vol. 33, pp. 332-60. Storper, M. (2001), ‘‘The poverty of radical theory today: from the false promises of Marxism to the mirage of the cultural turn’’, International Journal of Urban and Regional Research, Vol. 25, pp. 155-79. Taylor, M. (2001), ‘‘Enterprise, embeddedness and local growth: inclusion, exclusion and social capital’’, in Felsenstein, D. and Taylor, M. (Eds), Promoting Local Growth, Process, Practice and Policy, Ashgate, Aldershot, pp. 11-28.

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