Transcript What is Minority (ethnic) Entrepreneurship?

What is Minority (ethnic)
Entrepreneurship?
Laquita C. Blockson, Ph.D.
Minority Entrepreneurship (MGMT 351)
January 22, 2008
(c) Laquita C. Blockson, Ph.D.
Contents
• Definitions of Ethnic Economies
• Components of Ethnic Entrepreneurship
• Definition of Minority Entrepreneurship
(c) Laquita C. Blockson, Ph.D.
Definitions
Ethnicity refers to a sense of kinship, group
solidarity, common culture, and self-identification
with an ethnic group (Hutchinson & Smith, 1996)
In the context of ethnic entrepreneurship, “ethnic”
refers to ‘a set of connections and regular
patterns of interaction among people sharing
common national background or migration
experiences.’ (Waldinger et al, 1990: 33)
(c) Laquita C. Blockson, Ph.D.
Definitions (continued)
While many people may use the terms ethnic
entrepreneurship, minority entrepreneurship,
and immigrant entrepreneurship
interchangeably, Chaganti and Greene (2002)
note subtle differences among the terms:
• Immigrants are recent arrivals in a country, who
often enter business as a means of economic
survival. They may or may not be part of a
network linking migrants, former migrants, and
non-migrants with a common origin and
destination.
(c) Laquita C. Blockson, Ph.D.
Definitions (continued)
• Minority entrepreneurs are business owners who do not
belong to the majority population. In the United States,
the government identifies the following groups as
minorities:
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Blacks
Hispanics
Asians
Pacific Islanders
American Indians (also referred to as Native Americans)
Alaska Natives
• Women are also occasionally included as a minority
group
• A minority may not (necessarily) be an immigrant and
may not share a strong sense of group solidarity with an
ethnic group, in terms of a shared history, religion, or
language. (Basu, 2002)
(c) Laquita C. Blockson, Ph.D.
Definitions (continued)
• An immigrant entrepreneur of Caucasian
descent would not be considered an ethnic
minority entrepreneur in the western world.
• An ethnic entrepreneur may or may not be
an immigrant, but is likely to belong to a
minority community.
• An ethnic minority entrepreneur is an
entrepreneur who belongs to a minority
ethnic community. (Basu, 2002)
(c) Laquita C. Blockson, Ph.D.
Ethnicity and Economics
Definitions1:
• Ethnic economy (also known as ethnic
ownership economy): an economy comprised of
self-employed employers, unpaid family
workers, and co-ethnic employees.
– The common trait this economy shares is that these
employed individuals belong to the same ethnic
group.
– With this basic definition, this does not mean that the
buyers/customers necessarily share the same ethnic
characteristic(s) as the employers/employed.
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(c) Laquita C. Blockson, Ph.D.
Light and Rosenstein, Race, Ethnicity
and Entrepreneurship in Urban America,
1995
Ethnicity and Economics
Definitions:
• Ethnic enclave economy: an ethnic economy that is clustered
around a territorial core
– Cultural identity is key
– Businesses and customers proactively and significantly recapture
spending along ethnic lines and at all levels
– Examples: Koreatown in Los Angeles; Durham, NC after
Reconstruction; Calle Ocho in Miami
• Ethnic-controlled economy: significant and persistent economic
power exercised by ethnic employees in the mainstream economy
– Ethnic entrepreneurs usually cluster in the same occupations and
industries
– This can encourage and confer market power above and beyond
individual wealth and human capital
– Example: Koreans’ influence in Los Angeles soft drink distribution
• Koreans were 5% of all Los Angeles business owners in the 1980s, but
• Koreans owners represented more than one-third of soft drink dealers.
(c) Laquita C. Blockson, Ph.D.
Question to ask ourselves:
Does self-employment offer better earning
opportunities than wage work?
Answer: It depends…
• It depends on what type of selfemployment one specifies; and,
• It depends on whether employees are in
an ethnic-controlled economy or in the
general market
(c) Laquita C. Blockson, Ph.D.
Ethnic Entrepreneurship
Three components of the ethnic entrepreneurship
framework2
• opportunity structures:
– market conditions which may favor products or services oriented
to coethnics
– situations in which a wider, non-ethnic market is served
• group characteristics:
– predisposing factors such as selective migration, culture and
aspiration levels
– includes the possibilities of resource mobilization
– Includes ethnic social networks, general organizing capacity, and
government policies that constrain or facilitate resource
acquisition
• ethnic strategies: strategies that emerge from the
interaction of opportunities and group characteristics, as
ethnic groups adapt to their environments
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(c) Laquita C. Blockson, Ph.D.
Aldrich and Waldinger, Ethnicity and
Entrepreneurship, 1990
Opportunity Structures
• Market conditions
– Ethnic consumer products
– Non-ethnic markets
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underserved markets
markets with low economies of scale
markets affected by instability or uncertainty
markets with high demand for exotic goods
• Access to ownership
– Interethnic competition for vacancies
• residential segregation and succession
– State policies
• Role of “middlemen minorities”
(c) Laquita C. Blockson, Ph.D.
Group Characteristics
• Predisposing factors
– selective migration
– settlement characteristics
– culture and aspiration levels
• First pattern trait: sojourner’s orientation to host country
• Second pattern trait: distinctive social and cultural characteristics
that promote solidarity communities
• Third pattern trait: distinctive economic traits (e.g., concentration in
entrepreneurial roles, tendencies to keep capital liquid, and
preference for kin and coethnic labor)
• Resource mobilization
– class versus ethnic resources
– ethnic social structures
• social networks
• organizing capacity
(c) Laquita C. Blockson, Ph.D.
Ethnic Strategies
• Strategy definition: “the positioning of oneself to others in order to
accomplish one’s goals”
• Typical challenges that necessitate strategy:
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skills acquisition and training
recruitment and management of workers
managing relations with customers and suppliers
surviving competition
protecting oneself from political attacks
• Strategic responses
– self-exploitation
– business expansion by moving forward or backward in the chain of
production
– founding and supporting ethnic trading associations
– cementing alliances to other families through marriage
– Bribery, penalty payments, searching for loopholes, and organizing
protests
(c) Laquita C. Blockson, Ph.D.