Ethnicity, gender and Australian entrepreneurs: Rethinking Marxist views on Small Business
Jock Collins
School of Finance and Economic
University of Technology Sydney
Australia provides a very fertile ground in which to carry out field research
into ethnic enterprises. Changing global flows of capital, goods and people have
been reflected in changes to the size and ethnic composition of Australia’s
immigrant population. As a result of immigration, first generation immigrants
comprise a greater proportion of Australia’s population than do immigrants
in any other western country, with the exception of Israel1. Yet Australia’s
immigrant population is far more diverse than Israel, with Australia’s
immigrant population comprising more than 140 nationalities from all corners of
the globe. There is also an important spatial dimension of Australian immigrant
settlement. Australia is one of the most urbanised nations in the world2 and in
Australia’s major urban centres like Sydney, Melbourne, Perth and Adelaide
first and second-generation immigrants comprise more than half of the population.3
Many of these immigrants have moved into small business, although different
birthplace groups have different experiences in this regard. Some birthplace
groups of NESB immigrants — such as the Koreans, Italians and Greeks -
exhibit a rate of small business formation that significantly exceeds that of the
Australian-born. Other NESB immigrant groups — such as those born in
Vietnam, India, Malaysia and Sri Lanka — exhibit a lower rate of small
business formation than the Australian-born. ESB immigrants from the UK, New
Zealand, Canada and the USA have a similar entrepreneurial profile to the
Australian-born.4 How are these different rates of enterprise formation to be explained? This
paper aims to interrogate original Australian survey data on ethnic entrepreneurs
in order to better understand the underlying dynamics of ethnic enterprises in
Australia and to better understand entrepreneurship in Australia. In turn this
data, analysed within the broader framework of the Australian history of ethnic
entrepreneurs, will allow "testing" of — and further refinement of
- international theories of ethnic enterprises and ethnic entrepreneurs . Some studies of small business are eager to inquire into psychology of the
entrepreneur, with the focus on the individual’s motivations and the way the
personality traits of individuals - the ‘entrepreneurial spirit’ -
responds to insecurity, uncertainty and desperate circumstances.5 This is linked
in conservative economics’ free market theory to a particular construction
of homo economicus and individual, material maximising, behaviour.6 When
theorists figure cultural diversity into the small enterprise equation, the
concept of culture is often narrow, one dimensional, static and all embracing.
Such explanations lead to cultural stereotyping as explanations of the
entrepreneurial experience of immigrants in capitalist societies in the
"Chinese and Jews are naturally good at business" vein. Throughout this paper a different approach to the study of small business in
Australia has been emphasised. It stresses the importance of the way in which
individuals within the context of families, social classes and ethnic communities
interact within changing social, political, cultural and economic constraints
that change over time and place. This approach is well summarised by Goss,7 who
argued convincingly that ‘it seems that social factors such as
socio-economic class background, gender, ethnicity, and previous occupational
experience are equally, if not more, useful than individual psychology in
explaining the motives and actions of these who enter small business’. The
Australian experience also suggests that the changing processes of racialisation
of NESB immigrant labour in Australia is critical to any understanding of the
dynamics that lead to "blocked mobility" for these NESB immigrants and
therefore to the processes which shape the decision by immigrants to take the
risky step to entrepreneurship. But this paper goes further. It stresses in
particular the importance of impact of the changing dynamics of the racialisation
of immigrant settlement in Australia in the emergence of ethnic entrepreneurs in
the last decade as well as the last century. There are many research questions about ethnic enterprises and ethnic
entrepreneurs in the international literature. Some centre on similarities or
differences in the characteristics of ethnic enterprises in Australia when
compared to other countries. Following Waldinger and his colleagues,8 it is
critical to investigate both the group characteristics of — and the
opportunity structures faced by — immigrants in their new countries
of settlement. Important questions about the group characteristics of
ethnic entrepreneurs emerge. This includes both pre- and post-migration
experience. Following the resources theory of entrepreneurship of Light and Rosenstein,9 it
is also important to investigate the importance that class resources of
immigrants shape their decision to establish a business enterprise. These class
resources are different from — and must be distinguished from — the
ethnic resources that these immigrant communities possess in Australia. In
other words, immigrants with a similar cultural or ethnic background may have
vastly different class backgrounds that shape their opportunities for
establishing business enterprises once in Australia. The Australian data permits
an evaluation of the universality of the resources theory of entrepreneurship and
provides the opportunity to further refine this theory. Primary Data on ethnicity, gender and
Australian small business This paper reports on the findings of three
primary data sources of this paper: the 1988-89 and 1991-92 Sydney ethnic small
business survey (called the Sydney Survey)10 and the 1996 national ethnic
small business survey (called the National Survey) and the 1996 national
TAFE survey respectively (called the TAFE Survey).11 When combined, these
three sources of primary data include responses from over 1,600 small business
entrepreneurs. The majority of the entrepreneurs surveyed were from a NESB
background, although non-immigrants and ESB immigrant controls were introduced to
the second stage of the Sydney survey and the National and
TAFE surveys. The Sydney Survey was a two-stage study of 280 small businesses in
Sydney over the period 1988-92. The National Survey comprised 307 small
business owners and 496 small business employees in Sydney, Melbourne and Perth
who were interviewed in 1996. Like the Sydney Survey, the National Survey
utilised ethnic networks using interviewers of the same ethnic background to
elicit answers to more than 50 questions about the small businesses and about the
history and background of the entrepreneurs themselves. Using a snowballing
methodology, these two surveys were conducted face-to face, sometimes in English
and sometimes in the first language of the entrepreneurs. The third survey, the
Technical and Further Education (TAFE) Survey, was a mail survey of 1,064
owners of small businesses who were enrolled in Technical and Further Education
courses in Sydney, Melbourne and Perth in 1996. The National Survey and
the TAFE Survey were primarily designed to elicit specific information
relating to vocational education and training (VET) and ethnic small business in
Australia in a research project funded by the Australian National Training
Authority. But both surveys allow a profile of ethnic entrepreneurs —
and the detail of some of their business and social experiences — to emerge.
The responses to the questionnaires in these three surveys provide a rich vein
of quantitative and qualitative data from which to explore the phenomenon of
ethnic entrepreneurs in countries of settler immigration. This data set includes information on a wide range of matters related
to the practices, experiences and aspirations of immigrant and non-immigrant
entrepreneurs. Questionnaires used in these surveys probed into aspects of
pre-migration history, post-migration experience, class and educational
background, paths to business ownership, financial aspects of small business
enterprises, the role of gender and the family, and the way in which cultural
difference found an expression in business life. Information from these three
data sources allow various theories of ethnic enterprises to be
"tested", providing a fresh, comparative insight into the international
and Australian literature on ethnic entrepreneurs. In all three surveys, the samples were stratified so as to
allow comparisons based on ethnicity, gender and industry. The entrepreneurs were
drawn from small business across a wide range of industries and birthplaces.
Moreover, a substantial number of female entrepreneurs were included in each
survey in order to enable issues related to gender and entrepreneurship to be
investigated. Important here is the emergence of females as entrepreneurs in
they’re own right, as well the critical role that gender and the family play
in the formation of — and success of — family or male-owned
enterprises. When the international literature has investigated the relationship
between gender and ethnic enterprises, it has concentrated mainly on the role
women play in family or male-owned enterprises. There has been little research
into female entrepreneurs in their own right. In addition, non-ethnic or
non-immigrant business owners - male and female - were also included in each
survey to enable a more careful investigation into the complex interaction
between of ethnicity, and entrepreneurship. This need arises from the failure of
the international literature on ethnic enterprises to consider adequately the
dynamics of non-ethnic enterprises before drawing conclusions about the
distinctive nature of ethnic business strategies. In the three surveys of ethnic
entrepreneurs in Australia generated for this paper, the majority of
entrepreneurs surveyed came from a non-English-speaking background (NESB),
although a small control group comprising immigrant entrepreneurs of an
English-speaking background (ESB) was also included. This emphasis stems from the
international literature that concentrates on ethnic minorities in business. It
also responds to the need to explain the over-representation of many NESB
birthplace groups as small business entrepreneurs in Australia and the
under-representation of others. Class and Ethnic Entrepreneurs One key debate in the
international literature on ethnic entrepreneurs relates to social class. It has
been argued in earlier chapters of the thesis that one of the weaknesses of the
theory of ethnic entrepreneurship developed by Waldinger and his colleagues12 is
that it did not give sufficient weight to issues related to social class. But as
Light and Rosenstein13 point out, an investigation of class resources is critical
to any understanding of ethnic entrepreneurs. And there are other important class
issues to be investigated, including issues related to class mobility and class
reproduction. Just how do ethnicity, class and gender intersect in the lives of
ethnic entrepreneurs in Australia? There are a number of aspects
of this debate. One issue is the question of the class origins of entrepreneurs.
While they are now all members of the old middle class or
"petit-bourgeoisie" in the Marxist terminology,14 do immigrant and
non-immigrant entrepreneurs have similar class origins? Other questions relate to
class mobility and the reproduction of social classes. Bechhofer and Elliott15
suggest that the distinctive feature of the petite-bourgeoisie in Europe is that
it does not reproduce itself. That is, small business owners do not come from
small business families. The move into entrepreneurial activity is in this case
one of upward social mobility from the working class. On the other hand, other
studies find that inter-generational business succession is a critical part of
the dynamics of ethnic enterprises. In one UK study of the Manchester clothing
industry, Werbner16 highlights the importance of the passing of enterprises from
father to son(s) in the increasing Pakistani dominance of the clothing trade. The
move into entrepreneurial activity is in this one of class reproduction rather
than upward mobility. In order to
investigate the phenomenon of inter-generational business succession in
Australian enterprises, small business owners were asked about the occupation of
their parents. In other words, what proportion of those surveyed were continuing
a family business tradition compared to those who had no prior family experience
of business ownership? And were there any differences in terms of gender or
ethnicity in this regard? Or, to put this in class terms, were small business
owners in Sydney reproducing the petite-bourgeoisie class position of
their parents or was the move into business a movement from the working class to
entrepreneur, that is, the creation of a new petite-bourgeoisie? To put
this question another way. What is the social path to entrepreneurship? Or are
there many paths? And are they same for immigrant entrepreneurs and non-
immigrant entrepreneurs, and for women and men? But social class is only partly about the class position you occupy because of
the jobs that your parents did and that you do now. It is also about the relative
advantages and disadvantages that social class generates. Some of these, like
education, can be turned to advantage in the labour market as human capital. As
we have seen in chapter 2, Light and Rosenstein17 propose a resources theory of
entrepreneurship, in which ethnic resources and class resources
combine in varying combinations for different ethnic groups at a different time
to shape the incidence of and nature of entrepreneurship. Class resources both
material and cultural. Material advantages of human capital, money to invest or
borrow from family and ownership of the means of production aid entrepreneurs
from ruling class backgrounds. Cultural resources include "vocationally
relevant knowledge, attitudes, skills and beliefs and values".18 On the other
hand, ethnic resources accrue to all social classes with a similar cultural or
ethnic background. They include "ethnic ideologies, industrial paternalism,
solidarity, social networks, ethnic institutions, and social capital.19 Clearly both factors are critical - probable the most critical understanding
ethnic entrepreneurs. The problem is, however, that this approach sees ethnicity
and class as independent, separate factors. But in fact in the USA - where Light
and Rosenstein20 base much of their theory - in other western societies, including
Australia and Canada, social class and ethnicity intersect.21 One of the features of post-war Australian immigration is that NESB immigrants
have moved to all social classes. They are over-represented among the wealthiest
200 Australians, making them an important part of the Australian ruling class.
And as this thesis has shown, NESB immigrants are also important parts of the
Australian working class - albeit a different fraction than the non-immigrant
working class - and the petit-bourgeoisie. NESB immigrants are also now entering
the new middle class in Australia. Highly qualified Asian immigrants move into
the primary labour market to jobs once the preserve of non-immigrants, while
second generation NESB immigrants who were schooled in Australia are moving into
professional and other middle class jobs in the primary labour market that were
once the preserve of ESB immigrants or the Australian-born.22 Data from the Sydney Survey showed evidence for both continuities and
discontinuity's in the class experience of entrepreneurs in Sydney, with little
difference between immigrant and non-immigrant businesses in this regard. Just
over half (57%) of non-immigrant entrepreneurs were from families where the
father was a blue-collar worker employed in the occupations of "trades persons",
"machine operator and driver" and "labourer, unskilled". These occupations are
unambiguously working class.23 The corresponding figure for immigrant entrepreneurs
is very similar (47%). This suggests that, for about half of both immigrant and
non-immigrants surveyed, their move into small business represented upward social
mobility from the working class that they grew up in, based on the father’s
occupation. But blue-collar workers have vastly different work experiences. Or,
to introduce Marxist terminology, there are fractions of the working class, with
patterns of labour market segmentation suggesting that NESB immigrant men and
women occupy "inferior" fractions of the Australian working class.24 This is evident from results of the Sydney Survey, as Table 1 shows.
Australian non-immigrant entrepreneurs were twice as likely to have a father
whose occupation was a tradesman than were immigrant entrepreneurs. On the other
hand, the fathers of immigrant entrepreneurs were twice as likely to be labourers
or unskilled workers as were the fathers of non-immigrant entrepreneurs.
Tradesmen are higher paid, have a job of higher status and have more job autonomy
than labourers or unskilled production line workers.25 The class mobility of
immigrant entrepreneurs is therefore from lower fractions of the working class to
the petite bourgeoisie than is the case for the Australian-born entrepreneurs
surveyed. Table 1 Occupation of entrepreneur's father (%), Sydney Survey Occupation Immigrant Entrepreneurs Non-Immigrant Entrepreneurs Manager 16 16 Professional 12 13 Para-Professional 3 1 Tradesperson 16 38 Clerical worker 3 4 Sales/Personal Services 6 6 Machine Operator,
Driver 3 4 Labourer, Unskilled 28 15 Not
stated 10 3 Total 100 100
But social class is determined in terms of social relationships to the means of production and other workers, not something ephemeral as the colour of a workers collar.26 It has to do with relationships of control over the labour of oneself and of others. Many white-collar workers are working class if they do repetitive tasks over which they have little of no control over other workers.27 Many — probable most - of those entrepreneurs whose fathers were sales or clerical workers came from a working class background.
Of course, class position is not just determined by the occupation of the father: mothers also influence class location and other aspects of the culture of social class through their role in the family and work. Significant differences emerged when considering the occupation of the mothers of entrepreneurs surveyed in the Sydney Survey, as shown in Table 2. Twice as many mothers of immigrant entrepreneurs (59%) were described in occupational terms as "home duties" than were mothers of non-immigrant entrepreneurs (32%). Moreover, the mothers of non-immigrant entrepreneurs were nearly twice (24%) as likely to be in the "labourers, unskilled" occupation than immigrant entrepreneurs (13%).
The evidence from the Sydney Survey suggests that at least half of the entrepreneurs in the sample came from working class families, irrespective of whether they were immigrants or non-immigrants. For both groups, class mobility is evident in their move to small business. The main difference between immigrant and non-immigrant entrepreneurs in terms of upward social mobility seems to be more evident in terms of the fraction of the working class that they moved from. Ethnic entrepreneurs were more likely to have come from the lower fractions of the working class.
Table 2
Occupation of entrepreneur's mother (%),
Sydney Survey
| Occupation |
Immigrant Entrepreneurs |
Non-Immigrant Entrepreneurs |
| Manager | 6 | 1 |
| Professional | 3 | 4 |
| Para-Professional |
0 |
8 |
| Tradesperson | 3 | 6 |
| Clerical worker |
0 |
10 |
| Sales/Personal Services | 4 | 8 |
| Machine Operator, Driver | 0 | 4 |
| Labourer, Unskilled | 13 | 24 |
| Home Duties | 59 |
32 |
| Not Stated | 10 |
4 |
| Total | 100 |
100 |
Data from the National Survey confirms that most ethnic entrepreneurs surveyed did not have a petit bourgeois background. Very few — generally less than ten per cent — of the ethnic entrepreneurs surveyed said that they had a family business background. As Table 3 shows, there is little variation from birthplace to birthplace in this regard, with very few of the control sample of ESB and Australian-born revealing a family business background.
Table 3
Proportion of entrepreneurs who had reported a family business background,
National Survey
|
Region of Birthplace | Male | Female |
| Latin America (n=19) | 12.5 | 5.9 |
| Europe (n=68) | 6.9 |
4.4 |
|
Middle East (n=42) | 3.6 |
0 |
| Asia (n=19) | 9.6 |
12.0 |
| ESB/Australia (n=121) | 2.4 | 3.8 |
Occupational background of ethnic entrepreneurs
Social class advantages confers a material advantage, but also a cultural advantage. According to Light and Rosenstein,28 the middle class not only have access to greater material wealth and education, they also have the advantage of a bourgeois culture in their path to entrepreneurship. Part of this bourgeoisie culture confers vocational advantage, which includes "occupationally relevant and supportive values, attitudes, knowledge and skills transmitted in the course of socialisation". These class advantages will be manifest in superior occupational locations and opportunities. Bourgeoisie culture also confers more general advantages: "cultural traits (values, skills, attitudes, knowledge) characteristic of the bourgeoisie around the world".29
It is important therefore to investigate the occupational situation of ethnic and non-ethnic entrepreneurs prior to a move into forming a business enterprise.
The Sydney Survey provides data on the occupation and qualifications of the entrepreneurs themselves - as distinct from that of their parents - prior to the move into business. This data shows that the majority of non-immigrant entrepreneurs had been previously employed in white-collar jobs, while the majority of immigrant entrepreneurs had been blue-collar workers. Only one in four (25%) of non-immigrant entrepreneurs had previously been employed as been clerical workers and 16% as sales or personal service workers. Fewer (17%) had been employed in the "top-end" of the white-collar occupations as managers, professionals or para-professionals. This pattern is consistent with patterns of labour market segmentation in Australia, which suggest that non-immigrants have an easy access to the primary labour market, while for most NESB workers this path is often blocked. Many NESB ethnic groups appear to be unable to move beyond the secondary labour market, even after the recognition of their qualifications.30 This data also supports the argument31 that "blocked mobility" of immigrants in the labour market is an important motivation for immigrant to move out of paid employment into business ownership. To put this in another way, for non-immigrant entrepreneurs, the "pull" factor of independence and wealth that are the attractions of a move to business ownership appear to dominate the "push" factors of blocked mobility that appear to characterises much of the Australian labour market experience of ethnic entrepreneurs.
Data generated from the TAFE Survey supports the argument that, for many immigrants, a movement into small business is an upward movement in social class from the working class to petit-bourgeoisie. There appears to be similarities and differences in the class background of NESB immigrant entrepreneurs compared to the others. The proportion of NESB immigrant entrepreneurs with a middle class background - if this can be crudely defined by adding the "manager, professional and para-professional" categories of the occupation scale- is very similar irrespective of ethnicity, as Table 4 shows. However, more than one quarter of NESB male entrepreneurs had a father with a "labourer or machine operator" occupation, compared to only 6.3 % of Australian entrepreneurs and 5.3 % ESB male entrepreneurs. For these NESB entrepreneurs, the path to small business is from the bottom fractions or ranks of the working class. This finding is supported by when gender differences of class background are considered. One third of NESB female entrepreneurs had a middle class background, compared to half or more of Australian and ESB female entrepreneurs.
Table 4
Proportion of entrepreneurs from middle class background,
TAFE Survey
|
|
|
|
||||
| Father's Occupation | % Male | % Female | % Male | % Female | % Male | % Female |
|
Manager |
15.4 |
17 | 18.8 |
21.4 |
15.8 | 25.0 |
| Professional | 14.8 | 19.3 | 31.3 |
28.6 |
15.8 | 37.5 |
| Para- Professional |
1.9 | 3.4 | 6.3 | 0 | 0 | 0 |
| Total Middle Class | 52.1 | 39.7 | 56.4 | 50 |
31.6 |
62.5 |
Table 5
Self-employed/employers by previous occupation,
TAFE Survey
|
Previous Occupation Q 15 |
NESB N = 250 |
ESB (Control) N = 57 |
||||
| Australian Born |
Main ESB Born* |
|||||
| M n=162 | F n=88 | M n=16 | F n=14 | M n=19 | F n=8 | |
| Owner/Manager in same business | 11.1 | 3.4 | 6.3 | 14.3 | 26.3 | 0.0 |
| Owner/Manager in different business | 14.8 | 9.1 | 6.3 | 7.1 | 10.5 | 0.0 |
| Worker in a similar small business | 22.2 | 22.7 | 31.3 | 35.7 | 26.3 | 50.0 |
| Worker in a different small business | 11.1 | 14.8 | 12.5 | 7.1 | 15.8 | 12.5 |
| Wage earner other occupation | 40.1 | 45.5 | 43.8 | 35.7 | 21.1 | 37.5 |
| Not stated | 0.6 | 4.5 | 0.0 | 0.0 | 0.0 | 0.0 |
| Total | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 | 100.0 |
As Table 5 shows, entrepreneurs in the TAFE Survey were asked about their own occupation immediately prior to establishing their current business. Most had either been previously employed in a similar or different small business or had been employed in the corporate sector (around 40 % of NESB and Australian born entrepreneurs). Clearly, there are a number of paths to entrepreneurship. One is to work as an employee in the small business sector, learn the skills on-the-job and eventually hope to start their own small business. For others, the path to entrepreneurship is preceded by a job in the corporate sector. For the last decade, the corporate sector has been a net shedder of jobs in Australia as "downsizing" and "outsourcing" dominate corporate strategies during the economic upswing that followed the 1990 economic recession. In addition, the glass ceiling has constrained the upward employment mobility of women in the corporate sector. In these circumstances, the alternative of establishing a small business as a self-employed or small employer becomes increasingly attractive, particularly for women. As Asian and other NESB immigrants successfully negotiate the divide between the secondary and primary labour market and move into corporate sector jobs, more ethnic entrepreneurs are likely to use corporate sector employment as a springboard to entrepreneurship. This is particularly the case for those men and women from a NESB background who face an accent ceiling which limits their rise through the corporate hierarchy.
Female Entrepreneurs and Class Background
Similarly, details of the occupation of immigrant female business owners in Sydney in their "home" country defy any simple correlation with birthplace and occupation. A larger proportion of business-women born in South America (50%), Europe (31.8%) or ESB countries (75%) had been employed in managerial, professional, para-professional or trade occupations prior to emigration. This employment background is "superior" to that of Australian-born business women, of whom only 22.9% had prior employment in managerial, professional, para-professional or trade occupations prior to moving into business, As Table 6 below shows.
Table 6
Occupation of immigrants in home country and non-immigrants prior to entry into business,
Sydney Survey
| Birthplace of owners | % Mgr, Prof, Parra-p, Trade * |
| Lebanese Men (n=30) | 60 |
| Lebanese women (n=18) | 16.7 |
| South American Men (n=12) | 66.7 |
| South American Women (n=6) | 50 |
| European Men (n=53) | 45.3 |
| European Women (n=22) | 18.2 |
| Asian men (n=1) | 59.4 |
| Asian women (n=30) | 20 |
| ESB men (n=30) | 100 |
| ESB women (n=4) | 50 |
| Non-immigrant men (n=48) | 58.3 |
| Non-immigrant women (n=43) | 32.6 |
| NESB men (n=127) | 54.3 |
| NESB women (n=56) | 21.4 |
| Total (n=279) | 45.2 |
* Managerial, Professional, Parra-professional and Trades occupations.
Different paths to entrepreneurship.
One of the key findings of this paper is that there are a number of paths to entrepreneurship. One is to work as an employee in the small business sector, learn the skills on-the-job and eventually hope to start their own small business. For others, the path to entrepreneurship is preceded by a job in the corporate sector. In recent years, corporate downsizing and the corporate glass ceiling have combined to leave an increasing number of former middle managers with a retrenchment nest egg that is often used to establish a new business. For others, a profession is the road to entrepreneurship, while others still take the red-carpeted business migrant path. Another path is that from unemployed to entrepreneur, which is different for a retrenched senior executive than for an unemployed unskilled worker. The likelihood is that the paths to entrepreneurship will continue to diversity. The increased importance of temporary migration flows will provide new paths to entrepreneurship, while the technological and telecommunication revolution that has laid the basis for the current trends in globalisation will open up both new business possibilities, new opportunity structures, for entrepreneurs.
The diversity of backgrounds of ethnic entrepreneurs — and the wide variety of their entrepreneurial experiences in Australia - provides a challenge for theories of ethnic enterprise to explain. One way is to see these different paths as a product of different class and ethnic resources within given opportunity structures. But broader macro-structures lay behind new paths to entrepreneurship. Opportunity structures change in response to global economic fluctuations (the international economic recessions of the mid 1970s, early 1980s and early 1990s) and global economic restructuring. State immigration and economic policies influence the final economic outcomes that in turn are the opportunity structures within which immigrants who are unemployed, unskilled, professional or business immigrants must confront and subdue if they take the risky road of entrepreneurship.
Gender and entrepreneurship
Gender shapes the dynamics of the businesses of these male immigrants in many subtle ways. Most ethnic entrepreneurs in Australia are married. Most have children. The role of the wife, children and extended family in, often unpaid, labour in the business is often critical to its economic survival. As a spouse, the woman is mother, lover, confidant, business adviser, and business and house worker.
Male entrepreneurs rely on their wives for family and household labour to free them for business activities. Women who are entrepreneurs are generally not freed from these domestic and family responsibilities. Unlike the case for most male entrepreneurs, female entrepreneurs must take on family and home responsibilities in addition to business concerns.
The important role that the spouse and family play in contributing to the businesses ran by male entrepreneurs is often absent or downplayed in theoretical frameworks that seek the illusive and elusive entrepreneurial personality. The family is a critical resource for both ethnic and non-ethnic entrepreneurs in Australia, but family is more important for the businesses of male and female ethnic entrepreneurs. Immigrant entrepreneurs relied more on family labour than non-immigrant entrepreneurs did. Family and friends played a more significant role in the businesses. They more often provided the start-up capital for ethnic entrepreneurs than for non-immigrant entrepreneurs. But there is a great variety in entrepreneurial experience in this regard. Across ethnic lines, a higher proportion of male entrepreneurs relied on personal sources for finance than did female entrepreneurs. Among entrepreneurs, the self-employed generally relied more on personal sources but less on the family for finance. Immigrant entrepreneurs also depend slightly more on the labour of family members than do non-immigrant businesses. Family members comprise more than three-quarters of the work force in some minority businesses, particularly those ran by female ethnic entrepreneurs.
There is a clear gender division of labour in the business and at the home. Wives of male entrepreneurs tended to do the housework in the great majority of cases, irrespective of the ethnicity of the entrepreneur. In only a few cases did the husband and wife take a share of the housework. Australian-born male entrepreneurs were more likely to help with the housework load than any birthplace group of ethnic entrepreneurs. Of course, most female entrepreneurs did the housework themselves, irrespective if ethnicity. There was also a gendered division of labour in the business. Women tended to be more involved in more selling, cleaning, shelving/store work and book-keeping than men. Men, on the other hand, did more buying, hiring and firing and work connected with budgeting and planning the future of the business. Overall, in family businesses women carried out a somewhat traditional and less authoritative role in the business.
The family provides important reservoirs of non-material support for entrepreneurs, including business advice. This varies according to ethnicity, with NESB entrepreneurs most likely to report the use of such support. While future family security was very insignificant in the reasons why Australian-born entrepreneurs moved into business, it was a significant reason for ethnic entrepreneurs from both NESB and ESB backgrounds.
But females are entrepreneurs in their own right with immigrant women increasingly involved in business in Australia, so that the study of ethnic entrepreneurs can no longer be gender blind. Data from the three Australian surveys of ethnic entrepreneurs reported in this paper provides compelling evidence to reject the stereotypical view of female ethnic entrepreneurs as possessing inferior or inadequate educational experience. The evidence from the Australian surveys does not support the argument that NESB immigrant female entrepreneurs are deficient in formal levels of human capital when compared to male entrepreneurs or to non-immigrant female entrepreneurs. This is reflected in the finding that the majority of female ethnic entrepreneurs in Australia thought that, overall, they were better off operating a small business than working for wages. In this regard, as others, gender does not appear to make much of a difference. A similar proportion of NESB male entrepreneurs responded in the same way. Nor is there any noticeable difference between the self-employed and employers in this regard.
Similarly, there is little gender variation in the response of ethnic entrepreneurs to the question: "If you had your time over again, would you migrate to Australia?" Most ethnic entrepreneurs (both male and female) would do it all over again, indicating that life in Australia, if not entrepreneurial life, had been worth the effort of emigration. There also appears to be little difference in the motivations of immigrant and non-immigrant men and women for becoming entrepreneurs in Australia.
Ethnicity and entrepreneurship
The theories of ethnic enterprise stress the importance of ethnic resources to help explain why so many immigrant minorities move into business enterprises. Ethnicity intersects with class and gender in uneven ways. In some instances, ethnicity does not appear to matter, while for other matters the ethnicity of the entrepreneur is important. For example, the paper found that male and female entrepreneurs have a great diversity of educational qualifications or human capital. But there is no simple cleavage between the educational attainment of male and female entrepreneurs from the same ethnic background. Female entrepreneurs born in Asia and the Middle East were less likely to have university education than males from the same background. On the other hand, among Latin American and European entrepreneurs it is the females who have the highest rate of tertiary education qualifications. Similarly For different ethnic groups responded differently when asked if they would repeat their immigration experience. With the exception of the Lebanese, a greater proportion of males than females in business answered this question in the affirmative. One half of Asian female entrepreneurs stated that they would not repeat the Australian experience, while only one third of European businesswomen agreed with them. The vast majority of Lebanese and South American women, like their male counterparts in business, reported that they would repeat the immigration experience.
On the other hand, very little ethnic difference emerges in terms of the overall satisfaction of being an entrepreneur. In the smaller Latin American sample, all male and female entrepreneurs were more satisfied with entrepreneurial life when compared to their life as a wage-earner. For all other birthplace groups the result was similarly strong, with nine out of ten respondents having a similar view.
Clearly within and between different ethnic groups ethnic entrepreneurs have different experiences. This diversity in the experience of Australia’s ethnic entrepreneurs highlights the dangers of treating ethnic groups as homogeneous in any sense. For example, evidence suggests that while immigrant businesses in Sydney are not "enclave" businesses in the sense that they solely serve the immigrant community of the business owner, co-ethnics remain very important to the economic survival of one in three ethnic businesses. Some ethnic groups of entrepreneurs are more reliant on co-ethnic custom than others. Moreover, there is considerable variation within the ethnic small business sector in terms of sources of finance. Latin American men and Asian and European women relied most on family finance, while Middle Eastern and European males relied least on the family as a source of finance. Similarly, in terms of entrepreneurs’ use of banks as the main source of finance in Australia there is no simple cleavage along ethnicity and gender lines.
There is also considerable ethnic diversity in terms of entrepreneurs who lived on the premises. In one half of businesses owned by Lebanese women - and nearly half of businesses owned by Asian men — the families lived above, or out the back of, their business. In contrast, European immigrant entrepreneurial families were less likely to live on premises than Australian-born entrepreneurial families. On the other hand, all birthplace groups of ethnic entrepreneurs reported that longer hours of business opening that non-ethnic entrepreneurs. Cultural dimensions of business practice vary among different ethnic groups. One example is the use of "community capital" raised under the "hui" scheme to raise capital for Vietnamese entrepreneurs in Sydney, a feature also found among ethnic entrepreneurs in many countries.
Clearly there is no simple correlation between ethnicity, gender and business success. Rather, these relationships are uneven and dynamic. But the evidence does suggest that many facets of business and family life are similar across the social class of entrepreneurs. Many non-immigrant entrepreneurs rely on family support, although they do not rely of families to the degree that ethnic entrepreneurs do. In other words, there is not such thing as an ethnic business strategy that is common to all ethnic entrepreneurs and different entirely from the business strategy and business dynamics of non-immigrant entrepreneurs.
Class and entrepreneurship
Class resources have played an important role in the lives of Australia’s ethnic entrepreneurs, as they have in the United States and other countries. But there is more to class than a set of resources. Classes are social relationships. Issues related to class mobility, class reproduction and class politics are also important for ethnic entrepreneurs, as recent events confronting ethnic Chinese entrepreneurs in Indonesia dramatically highlights.
The entrepreneurs in the three Australian surveys reported in this paper come from different class backgrounds. Some ethnic and non-ethnic entrepreneurs came from a middle-class or petit-bourgeoisie background. They utilises their class advantages or class resources to help to develop the human capital and other skills, networks and knowledge that are very useful for entrepreneurial life. In this sense, their class background is an advantage. Many ethnic entrepreneurs have come from such a class background and taken advantage of such class resources to establish a business in Australia. Processes of racialisation construct barriers that non-ethnic entrepreneurs from a similar class background would not face. Non-recognition of qualifications is one of these barriers. But other ethnic entrepreneurs have a working class or peasant background. For them, their class background has been a barrier to the accumulation of educational and other class resources. Their move to entrepreneurship emerges precisely because the lack these class resources prevents them from breaking out of the secondary labour market.
For many NESB entrepreneurs, 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 their family. Most entrepreneurs, irrespective of ethnicity or gender, do not want their children following their entrepreneurial footsteps, Entrepreneurial children of working age have generally moved into professional or para-professional occupations. But an equal number of other ethnic entrepreneurs would like their children to continue in the family business tradition. Female entrepreneurs born in Europe and Australia were more likely than their male counterparts to want to encourage their children to move into business. For all other birthplace groups, more male than female surveyed would want their children to have careers in business. More than two-thirds of South American females surveyed, and over 80% of South American males surveyed, wanted their children to have a business career, significantly higher than any other ethnic group. This finding has implications for the reproduction of the petit-bourgeoisie.
Many ethnic entrepreneurs in Australia had family members who were also entrepreneurs. Nearly three quarters of female Australian-born entrepreneurs surveyed - and one half of male Australian-born entrepreneurs - reported that they had other members of their family in business. Similarly, more than one half of Lebanese male, South American female and European male and female entrepreneurs surveyed reported that they had other family members who were in also small business.
The diversity of class backgrounds of the entrepreneurs surveyed provides evidence to support the argument that there are many paths to entrepreneurship for ethnic entrepreneurs in Australia. For some NESB entrepreneurs, the path to small business is from the bottom fractions or ranks of the working class. Others had a middle class background. Ethnicity and class combine in uneven ways. For example, one third of NESB female entrepreneurs had a middle class background, compared to half or more of Australian and ESB female entrepreneurs.
This evidence clearly demonstrates the complex intersections of ethnicity, the family and social class that characterise the life of the Australian small business sector. The petit-bourgeoisie — ethnic or otherwise - is very much a product of collective family cultural, educational and financial and non-material support. This reality appears to be at odds with the individualistic image, ethos and ideology that is often presented as a characteristic of the petit bourgeoisie.
Class also has a political dimension. The petit-bourgeiosie is often seen as a conservative, anti-trade union class. The Left has traditionally been suspicious of the petit-bourgeiosie. But the petit-bourgeiosie is not homogeneous in this regard. Ethnicity and class intersect to shape such political aspects as which political party entrepreneurs voted for whether their employees were trade unions members. A cleavage was found in terms of the political preference of immigrant and non-immigrant entrepreneurs. For non-immigrant entrepreneurs, the overwhelming trend was to vote for the conservative Liberal/National Party coalition, with only one in five supporting the Australian Labor Party (ALP). Immigrant entrepreneurs, on the other hand, were more likely to have voted ALP than Conservative. More Asians voted Labor than Liberal, while the Liberal vote among European immigrants was nearly as strong as the Liberal vote. Lebanese men tended to support Labor, but Lebanese women said that they voted Liberal. The clearest pattern to emerge was that non-immigrant business-people supported the Liberal Party by a two-to one majority for males and a three-to-one majority for females. These survey results do not appear to mirror the voting patterns and political allegiances among ethnic groups in Australia.
In terms of employing unionised labour, the research found that in only 10% of businesses owned by immigrant entrepreneurs- and 15% of businesses owned by non-immigrant entrepreneurs — were there employees who were trade union members. But with most enterprises employing less that five employees, the rate of unionisation within the Australian small business sector overall is not high.
Towards a new theory of ethnic entrepreneurs
The Australian research on immigrant entrepreneurs reported in this paper supports the argument in the international literature that a complex range of factors is involved in determining whether immigrants will become entrepreneurs. These factors include the immigrant’s background and class before emigrating and the circumstances they face on settlement in their new country. Waldinger and his colleagues present a theory of ethnic entrepreneurs which groups these factors into the group characteristics of different ethnic groups of immigrants and the opportunity structures that they face after settlement in their new country. On the other hand, Light and Rosenstein present resources theory of entrepreneurship in which different combinations of class resources and ethnic resources provide the main explanatory power for the different entrepreneurial experience of different ethnic groups.
In some ways, these theories are complementary. The group characteristics of different ethnic groups are shaped by both class and ethnic resources. However, one of the strengths of the resources theory over its rival is that it recognises more explicitly the critical role that class plays in ethnic enterprise formation. It does this through the way in which class background is translated into resources that are useful in the establishing and running of a business enterprise. In contrast, class lies in the background of the analysis by Waldinger and his colleagues, shaping the group characteristics of different ethnic groups. But immigrants from the same ethnic groups have different class background. Moreover, ethnic groups are not homogeneous, with important difference relating to class, religion and region — an in some cases, cast — differentiating immigrant from the same ethnic group.
Aspects of social class must be prominent and explicit in any theory of entrepreneurship. But social class is more than a resource. It is a social relationship. Issues related to the political dimensions of entrepreneurial life, or issues related to the reproduction of the petit-bourgeiosie, are also important to consider in a wider theory of entrepreneurship.
One advantage of the theory of ethnic entrepreneurs advocated by Waldinger and his colleagues is that it also strongly emphasises the way in which the opportunity structures for new immigrants change over time. Changing opportunity structures — booms and recessions, economic restructuring changes to government industry policies, new technologies - all impacting on the chances of immigrants with a given set of group characteristics becoming entrepreneurs. The resources theory does not give adequate attention to opportunity structures. While a focus on changing opportunity structures in the economies where immigrants settle is a strength of the theory of Waldinger and his colleagues, they in turn do not pay sufficient attention to the macro-structural factors which shape these changes. In other words, they do not emphasise sufficiently the important links between the processes of globalisation and racialisation and the opportunity structures for immigrants.
Globalisation is particularly important in explaining changing immigration patterns. It is also important to explaining the new paths to entrepreneurship that have emerged in the past two decades, particularly the emerging trends of professional and business migration. Racialisation is important because it is perhaps the key explanatory factor to understanding the attractiveness of, and opportunities for, different immigrant groups to make the risky and costly move into small business. Blocked mobility is one consequence of racialisation, although unskilled immigrants have different experiences than professionals or business migrants in this regard. In other words, the class background of immigrants transforms, but does not overcome, the labour market barriers that racialisation creates for NESB immigrants.
The state must also appear in the theory of ethnic enterprises. The state shapes migration and economic policy and has a strong impact on who becomes an immigrant and on the opportunity structures these new immigrants face. The state also plays a role in the processes of racialisation, through immigration and settlement policy generally, and human rights and anti-discriminatory legislation and practices.
Any theory of ethnic enterprise must also be very explicit about gender issues in the entrepreneurial process. Gender is a multifaceted phenomenon in the study of entrepreneurship. Many entrepreneurs are now women. In many countries, including Australia, the rate of growth of female entrepreneurs is faster than that of male entrepreneurs. Immigrant women have also been part of this become entrepreneurs: between 40 and 50 per cent of female entrepreneurs in Australia are first or second generation immigrants. The fieldwork conducted for this paper included large samples of female entrepreneurs. The surveys also asked about matters related to the family and the business, including the gender division at work and at the home. Other questions probed into the use of family networks, as well as the role of the children in entrepreneurial families.
While this theoretical framework has been developed from a close study of ethnic entrepreneurs in Australia, it is also very relevant for other capitalist societies. Patterns of migration are changing as part of the dynamics of globalisation and new paths to ethnic entrepreneurship are emerging. Indeed, the Internet provides new possibilities for small enterprise growth. This diversity in the ethnic entrepreneurial experience is one of the key findings of this paper. There is not one ethnic business strategy, there are many strategies. Class, ethnicity and gender intersect in different ways for different ethnic groups in different places over time. One expression of these differences is that different immigrants have different kinds of class and ethnic resources. But these resources don’t happen in a vacuum. In all cases, immigrant minorities’ experiences are filtered through the 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. In all cases, ethnicity, class and gender interact in complex ways to influence the creation of new entrepreneurs.
Ethnicity, class and gender also intersect to shape the life in an entrepreneurial family and business. Immigrant women are becoming entrepreneurs in their own right, but they also have family responsibilities. It is clear that the story of entrepreneurship, ethnic or otherwise, is also the study of the family, and the gendered division of labour in the family and in the business.
The Australian surveys of entrepreneurs reported in this paper enables an investigation into the ways that gender intersects with class and ethnicity via an insight into the gender dimensions of entrepreneurial families. Generalisation about female entrepreneurs ignores the diversity of backgrounds of women in small business, particularly those from other cultures and other social classes. In some dimensions of entrepreneurial life, gender appears to be the most significant factor, in others class, and in other ethnicity.
Do we need to rethink Marxist attitudes to small business?
Traditionally Marxist and socialist politics has held an antipathy towards the petit-bourgeoisie and the bourgeoisie. They were seen as class enemies. But is it still possible to hold such a view given that many of those in the Australian the petit-bourgeoisie and bourgeoisie in small business are immigrants from all class backgrounds. Many are driven into these social classes because the racialisation of immigrant labour and sexism of the labour market in Australia has blocked their mobility in the labour market or blocked them from having jobs at all. Moreover, these small businesses are critical to employment generation, particularly for immigrants from their ethnic background. At a time when corporate downsizing and public sector demolition have generated little job growth in the 1990s - despite Australia having the highest average rate of growth of the capitalist world - it is the small business sector that holds the greatest prospect of generating jobs for many Australians in the coming decade. Moreover, who would want the State to control restaurants, hairdressers, newsagents, chemists etc etc. Surely this is outdated thinking for a politics that has relevance in Australia in the 1990s. It is time to rethink Marxist attitudes to small business.
A number of issues emerge for Marxist theory. The first is the conceptual one of class theory. It relates to the self-employed and to employers in small business. Marxist theory distinguishes between the self-employed and employers in class terms because the social relationship to the means production is different in each case. But difference within the bourgeoisie - between small business and big business - is under theorised within Marxist theories of social class. Moreover, many of those who are self-employed today are self-contractors in the formal economy or outworkers in the informal economy. This is often seen by Marxists as a more marginal form of wage labour, that is, downward social mobility, rather than a movement up to the class ladder into the bourgeoisie or petit-bourgeousie. On the other hand, some sociological theory of ethnic entrepreneurship is critical of this "narrow" focus of Marxist theory. As Light and Gold recently argued: "Marxists do not include in the bourgeoisie any employers or self-employed in the illegal sector nor any business owners in the informal sector. Since we wish to include all business owners, a Marxist bourgeiosie is too narrow." Clearly the impact of economic restructuring on contemporary capitalist class relations and class structure requires further debate and investigation.
A second, related, issue for Marxist theory is the renaissance of the small business sector itself. This is seen not only in Australia, but in most - if not all - capitalist societies in the past two decades. Marx, like Weber and many others, had predicted the inexorable decline of small business in the face of ravenous and unstoppable national and international corporate capital. Some argue that this is because of the advantages of flexibility that small businesses have in the post-Fordist age. Others like Sassen see small business opportunities opening up for immigrants and others doing the jobs - cleaning, cooking, washing, dog-walking etc. - that high-wage professionals in global cities have no time to do. Globalisation is clearly transforming the capitalist economy and transforming business structure and social relations along the way.
Another implication of this paper relates to contemporary politics. Traditional Marxist views held that revolution was needed to overthrow capitalists - small and big - and give power to the working class. In practise, this has meant power by the state. Given the failure of central planning in countries such as the USSR, a small business sector would be central to any future socialist state: the thought of the state controlling restaurants and other small businesses would appeal to very few. This requires a rethink about left political strategies and small business and, given the results of the survey presented in this paper, it seems that small business owners should not be seen as the natural and inevitable enemy of socialist or social democratic politics.
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