The Economic Context, Embeddedness And Immigrant Entrepreneurs

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