TRENDS IN CONTEMPORARY SOCIETY

Trends in Contemporary Society

Trends in Contemporary Society

Introduction

It is, by now, widely acknowledged that ethnic minority immigrants have a high propensity towards entrepreneurship and contribute positively to economic development. Recent studies have highlighted the significant contribution made by immigrant labour market from India, China, and other countries, to innovation and job creation in the UK. Ethnic minority group, many of whom are immigrants, are overrepresented among the population of entrepreneurs in the Netherlands and the UK (Levie, 2007). Although entrepreneurship has been the route to upward economic and social mobility for some ethnic minority immigrant labour market, for others it has been an economic dead end (Barrett et al, 2001).

Much of the literature on ethnic minority group business owners, especially in Europe, focuses on the disadvantages faced by them and the small average size of the firms they own, and neglects to analyze how and why a significant number of ethnic minority immigrant labour market have succeeded in expanding their businesses. In recent years, the term 'break out' has been used in the context of ethnic labour market that breaks with the exclusive reliance on ethnic markets (Ram & Jones, 1998). However, there are few scholarly accounts of the process of 'break out', the nature of marketing strategies developed by successful ethnic minority labour market and the underlying factors that enable some ethnic minority labour market implement these strategies and overcome existing market barriers.

Discussion

Many of the market barriers facing ethnic minority groups are similar to those facing small businesses in general. These include the difficulties of attracting initial customers, competing with entrenched competitors and building a reputation in the marketplace. Securing formal financing is also a challenge for a newly started small business (Storey, 1994). While the foregoing challenges are common to all small and newly started businesses regardless of ethnicity, they are likely to be exacerbated in the case of immigrant labours that are less familiar with the host country market in terms of prevailing supply and demand conditions, the nature of competition, business culture and business practices, and government regulations. The lack of fluency in the host country's language among some ethnic minority immigrants adds to their difficulties of negotiating market barriers. These problems are captured by the concept of ethnic disadvantage, which asserts that immigrants are at a relative disadvantage in the labour market since they often lack language and career-related skills, which blocks their market opportunities (Mason, 2003).

Due to their lack of appropriate educational qualifications and lack of capital, immigrants tend to establish businesses at the lower end of the opportunity structure. Previous research suggests that ethnic minority labours face greater market barriers because they tend to be located in inner city areas characterized by low effective demand, poor infrastructure and above-average crime rates (Aldrich et al., 1984; Barrett et al., 2001). It also suggests that ethnic minority labours face greater financial barriers, compared with small firms in general, to accessing credit at business start-up in the UK (Bank of ...