#19CREME @CREMEatBham Welcome Professor Simon Collinson, Dean, - - PowerPoint PPT Presentation

 Centre for Research in Ethnic Minority

Entrepreneurship

 19th Annual Ethnic Minority Business Conference

#19CREME

 @CREMEatBham

Welcome

 Professor Simon Collinson,  Dean, Business School  University of Birmingham

The Many Faces of Minority Entrepreneurship

 Professor Monder Ram OBE  Director, CREME  Business School, University of Birmingham

Session 1: The Enterprise & Diversity Alliance – How do we make Diversity & Enterprise Everyone’s Business?

 Chair:  - Professor Kiran Trehan, CREME, Birmingham Business School  Speakers:  - Andy Lee, NatWest  - Leila Green, Staffordshire Chamber of Commerce  - Ruth Lowbridge, SFEDI  - Jackie Brierton, Co-Founder, Women’s Enterprise School

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Enterprise & Diversity Alliance

 https://www.youtube.com/watch?v=s8LvNi

NITzk&feature=youtu.be.

Session 2: Minority Business: Beyond the Individual Entrepreneur

 Chair:  - Professor Richard Roberts MBE, CREME, Birmingham

Business School

 Speakers:  - Professor Sara Carter OBE, Strathclyde University  - Dr Maria Villares, CREME, Birmingham Business School

Constructing Economic Well-being in the Entrepreneurial Household Incomes, Wealth and The Role of Entrepreneurial Households

Professor Sara Carter OBE FRSE Hunter Centre for Entrepreneurship University of Strathclyde CRÈME University of Birmingham 20th October 2015

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Why don’t we study entrepreneurial earnings?

Assumptions 1. Researching incomes and wealth – too difficult, complex, inconvenient and rude 2. Successful entrepreneurship leads to fabulous wealth, failed entrepreneurship can be personally catastrophic 3. Incomes from self-employment are low, but the capital gain is high 4. Incomes from self-employment are low, but the non-pecuniary benefits are great (poor but happy) 5. It doesn’t matter what entrepreneurs earn, because ‘real’ entrepreneurs will be entrepreneurial no matter what

Why does it matter?

• Understanding entrepreneurship implies understanding the

consequences of entrepreneurial action for entrepreneurs

• “Wage uncertainty is a major determinant of labour supply

among the self-employed” (Parker, 1997)

Entrepreneurial Incomes

• Net profit, drawings, equity-adjusted drawings
• Lower initial earnings
• Lower earnings growth than in paid employment
• Median earnings differential 35% after 10 years
• Median earnings never overtake alternative entry wage

available on a paid job with zero tenure

• Results hold across all sectors (Hamilton, 2000)

Entrepreneurial Wealth

Entrepreneurial Households …

• Own total wealth almost double that of employee households (£246k vs £475k)

– 20%+ of employer households in top decile, 50%+ in top 3 deciles – S/E and employee households evenly distributed across deciles, over half of unemployed households are in bottom 2 deciles

• Account for 2% (500k) of total, but own 4% of total wealth

– S/E households = 6%, but own 7% of total wealth – Together, 8% of households own 15% of household property wealth, 13% net financial wealth and 12% physical wealth

• Have higher property liabilities

– larger mortgages, multiple properties, collateralising business borrowing.

• Own 8% of total pension wealth - proportionate to population, but lower mean

pension wealth

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Constructing Economic Wellbeing in Entrepreneurial Households

1. How do households (and household resources) influence business decisions? 2. How do households construct economic well-being - what is the nature of ‘rational choice’ in the entrepreneurial household? 3. How is economic risk and insecurity managed within the household - how does the entrepreneurial household manage its money?

Household Influences

• Interconnectedness of business and household - resource sharing

and cross-subsidies

• Time pressures – business and family life occurs simultaneously
• Impact on children – lack of time for children counterbalanced by

sense of providing ethics of hard work and the value of money

• Household as organizing hub - the household connects activities

Constructing Economic Wellbeing

• Family and kinship relations as key business resource - division
• f entrepreneurial roles but collective focus on the business
• Avoidance of debt - investing only time and retained profits in

the business

• Household sanctions on business activities
• The growth trap – want businesses to grow, but won’t take on

debt or employ more people until growth has happened

Managing Economic Risk and Insecurity within the Household

• Orientation towards available resources - focusing on resources

at hand allows the pursuit of business activities without noticeable risk

• Household control – frugality, thrift, minimised consumption and

strong work ethic evident even among the well off

• Importance of social transfers – pensions, child benefits etc. can

meet basic needs with business income seen as additional, growth provides possibility of higher living standards

• Controlled investment of time and money - removes risk of losses

Conclusions

Financial rewards

• Studies using incomes data show meagre and volatile rewards
• Analysis of wealth shows entrepreneurial households at least on a par with, if

not above other occupational groups Interconnected Business and Household

• Central role of the household in strategic business decisions
• Studying the individual entrepreneur or the firm fails to capture important

drivers / constraints in business growth decisions

• Continuous interaction between household and business crucial for organizing

resource supply (and withdrawal) in relation to business activities Taking control

• Risk and uncertainty is managed by frugality in household and business
• Uncertainty is controlled not confronted
• The growth trap – how can we help business growth in a debt averse context?

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Bricolage strategies in immigrant firms: beyond the individual entrepreneur

Maria Villares, Monder Ram and Trevor Jones Centre for Research in Ethnic Minority Entrepreneurship (CREME), University of Birmingham m.villares@bham.ac.uk

The importance of family

 Not unique to immigrant entrepreneurs. But reliance on family/kinship ties

more likely given the higher vulnerability of the businesses and sectors (Ram et al 2001, Raijman and Tienda 2000, Cobas and De Ollos 1989).

 ‘Family embeddedness perspective’ (Aldrich and Cliff 2003): family dynamics

and transformations influence entrepreneurship, particularly in understanding the venture creation decision as well as the resources to be mobilised to support the business

 Sensitivity towards the role of men and women in family dynamics (gender

and power relations within the family) (Phizacklea 1998, Hillman 1999, Ram 1992)

Bricolage/patchworking strategies

 Role of children in the household: reciprocity, obligation and trust. Business

as safety net or platform for further education (Song 1995, Ram and Jones 2001)

 Bricolage as making do with what is at hand (Baker and Nelson 2005), or

patch-working Kibria (1994, 81) as “gathering together a wide variety of resources from diverse social and economic arenas”

 Importance of looking at the household to understand the firm and vice versa

(Carter et al 2014)

Bricolage: Examples from the West Midlands

 Data collected from businesses in the West Midlands area (50

business owners, 60 workers)

 Main countries of origin A8 countries, Somalia, Zimbabwe, Iran, Iraq.  Qualitative interviews to owners and workers/helpers  Different forms of patchworking strategies identified (as survival and

growth), and different paths (multiple job holding, multiple activities, fixed income from family members portfolio, etc. )

Patchworking strategies as buffer

 Bricolage for starting up the business

– Pulling together resources from different family members

– This business is closely linked to my family, and although I am the sole trader some of my family members have invested money in the business […] This way is kept within family circles so the family can prosper and earn a good standard of living. (Man owner of mini market from Somalia) – We have used savings from the family pot. So I took money from the family savings and my husband also helped with marketing, calling the customers, driving me around (Woman,

• wner of photography studio from Poland)

– For the initial capital I used a £2000 overdraft from my bank and £1500 loan from my mother in law (Woman, owner of tattoo parlour from Poland)

Patchworking strategies as buffer

 Multiple activities within the same business site

– Partitioning of the business site in sub-units which are sublet

 Our main business activity is to import huge quantities of soft drinks, blankets, clothing

and many other goods from Middle Eastern countries to sell them to customers in Birmingham […] I’ve sublet space for a money transfer agency. It is very busy and gives us customers. And my cousin has taken space in the shop too to open a busy tailoring (Man, owner of mini market from Somalia)

– Establishing new activities within the same business site to cushion fluctuations in the market

 I opened the supermarket. Then I also started to make contacts with X Money Services

Transfer Agency whose headquarters are in Dubai to offer me the contract so I can add it as part of my business. Customers would be coming to buy food products and at the same time if they wish also to transfer money abroad they can do it (Man, owner of supermarket from Somalia)

Patchworking strategies as buffer

 Multiple job-holding

– Part-time entrepreneurs, holding other occupation in paid employment

 I have to work as employee as well because we still don’t have enough clients in the

• business. My brother works there full time, he is the business partner. My sister helps as

well (Man, owner of a car repair business from Poland)

 I am a registered nurse and I am working full time. So I come to my business according to

the shifts that I have in the hospital […] I work 37 hours per week as a nurse. After work or when I am out of my shift, I do about 20-25 hours a week for my business. My wife helps too (Man, owner of butcher shops from Zimbabwe)

– Investing a in business in the country of origin

 I am also currently setting up something in Poland, to work in a company that sells homes.

Someone else is looking after it at the moment, but I have to allocate a couple of hours a day to see what has been happening. I work 4 hours in this business. I also work 8 hours at X Telecommunication company as an employee, so 4 hours here, 8 hours there (Man,

• wner of computer repair and unlocking services company from Poland)

Patchworking strategies as buffer/growth

 Fixed income and /or support from family members

– Partner/children contribute with fixed income from paid employment

 I have somebody else in the business, my wife. She helps me out, particularly when I

have appointments. She is also doing work in care, so we use her salary as our fixed income, because sometimes the business does not give enough (Man, owner of internet café from Ghana)

– Family members help out to save on employees costs

 I have the informal help of my husband and my son. I had three employees in the past.

Now only the informal help of my family (Woman, owner of a food shop from Poland)

– Family members take over care responsibilities to facilitate dedication to the business activity

 I work 6 hours a day here, the rest of the time I take care of my children. Those 6 hours I

have the help of my niece [with the children], who is studying part time (Woman, owner

• f beauty salon, Poland)

Patchworking strategies as buffer/growth

 Portfolio entrepreneurship

– Success that leads to opening new businesses

 The business is going well. We have managed to open a total of 22 other pizza and

burger businesses in the West Midlands. Some are business associates, and others family members (Man, owner of pizza and burger complex from Iran)

 I work here in the food shop full time. I do have other shops open, two shops in

Coventry, one in Rugby. I am talking to my wife about the possibility of opening a chemist to diversify the business (Man, owner of food shop from Poland)

Concluding remarks

Data shows that migrant entrepreneurs combine different sources of finance in order to survive and grow their businesses Bricolage strategies take different forms such as: Multiple activities within the same business site Multiple job-holding Fixed income from other family members Portfolio strategies Importance to understand how family relationships are structured, especially regarding the negotiation of individual roles in the reproductive and productive spheres

Implications for practice

 Important to know the household composition and dynamics in order to

understand how resources are utilised at the firm level

 Need to understand decision-making processes at the firm and household

level

 The business strategies put in place might impact the trajectories of men and

women in the family differently: what are the short and long term professional/life aspirations of men and women in the household? What is the impact of the business activity on these?

 Important to understand the role of the children in the decisions made:

what is the impact of the business strategies in the social mobility of the children in the household?

Where do minority entrepreneurs go to for business support?

• Dr. Drew Gertner, Professors Monder Ram and Kiran

Trehan

Outline

 Overview of project

 Some Findings  Discussion with entrepreneurs

– Blue Vine Consultants

– Abraham Eshetu Consulting

Key Issues

• GAP:
• How do we understand business support?
• What forms of support are EMBs using? Why?
• Supply side:
• If LEPs and other organisations have the objective to

create locally relevant support, they need to know how EMBs utilise business support

• Demand side:
• Ethnic entrepreneurs need help in better engaging with

support providers; implications for business growth

Overview of project: Aims

 Aim 1: Map support system from demand side

– Which organisations and networks are EMBs engaging with for support? – What factors affect these relations (e.g. proximity)?

 Aim 2: Map support system from supply side

– Inventory of support, types of support provided

 Aim 3: Compare the demand and supply side findings

Theoretical framework: Proximity

 Proximity: –

degree to which individuals are ”bound by relations of common interest, purpose, or passion, and held together by routines and varying degrees of mutuality” (Amin and Cohendet, 2004:74)

 Useful as places emphasis on relations between actors and what

underpins those relations

 Economic actors build on various dimensions to coordinate their actions  Key: ethnic proximity is not the only dimension that matters!

Geographical proximity Spatial distance between actors Social proximity Extent to which relations are a result of friendship or kinship Cognitive Proximity Extent to which actors share a similar knowledge base Institutional proximity Extent to which actors share the rules of the game Organizational Proximity Extent to which relations are shared in an organizational arrangement Ethnic proximity Extent to which actors share a similar ethnic background

(Boschma, 2005)

Overview of project: Methods

 Undertaking interviews with 64 entrepreneurs

– 1st and 2nd generation entrepreneurs, not new migrants

 Sectoral approach:

– IT, Financial and Business Services, Catering/Restaurants, Construction

 traditional and emerging economic activities associated with EMBs

(Kloosterman, 2010)

 Overethnicisation of migration research (Morosanu, 2013)  Selected 3 diverse and less diverse cities

– Birmingham (55% white) – Glasgow (88% white) – Norwich (91% white) (Census, 2011)

Overview of project: Interviewees

Example of interview questions

Who matters and why?



Which organisations and networks have you received business support from? Why did you go these individuals? What type of support did you receive? (NEXT SLIDE)



Who are the top 3 organisations/networks with which you had the greatest degree of interaction? Why?



Have you been affected by the changes to the business support landscape?

What matters and why?



How was the support delivered? How do you think the delivery affected the quality of support you received?



How do you think getting support from someone within your own ethnic background affected the way you engaged with individuals for support?



Did the individuals have sector specific knowledge related to your business? How do you think this affected your engagement?

Overview of project: Defining support

What do we mean by ‘support’?

We define support much broader than just formal assistance provided by government or publicly funded sources but as: “the act of providing an entrepreneur with access to a value resource and a supporter as any individual who willingly performs such an act” (Hanlon and Sander, 2007:620)

Findings

Who do ethnic ethnic entrepreneurs go to for support? What factors affect these relations?

Who and what matters and why?

Finding #1: It is complex. Ethnic Entrepreneurs have their own journeys. And differs by sector!

Complexity of business support usage

Complexity of business support usage

Who and what matters and why?

Finding #2: Despite the complexity, 4 key (non-public sector) actors stand out as important.

 Accountants  Family and friends (but also ‘dark sides’)  Individuals with sector specific knowledge (but also ‘dark sides’)  Internet (e.g. YouTube) – new type of support

Who and what matters and why?

Finding #2: Despite the complexity, 4 key (non-public sector) actors stand out as important.

Accountant

“Simon is an accountant…accountants know a lot about cash flow, and businesses, they know exactly what’s working because they have that access to all the data and everything, they’re very smart

• people. That’s why he helped me with starting to understand how

the business works”

Who and what matters and why?

Finding #2: Despite the complexity, 4 key (non-public sector) actors stand out as important.

Family and friends or social proximity

“I don’t have to spend a long time thinking…if my brother is saying, ‘David, definitely don’t grow the second sector of your business in Manchester…I will just listen to them, that’s how big the trust is”

‘Dark sides’

“We’ve had heated arguments and I’ve been continuously told the reason why we’re still doing this is because they started it and we’ve learnt from them. I’m always quick to remind them to say learning is both ways”

Low value-added sectors

Who and what matters and why?

Finding #2: Despite the complexity, 4 key (non-public sector) actors stand out as important.

Individuals with sector specific knowledge or cognitive proximity

“You can engage with that person because they have…been through it…Where…they haven’t got any previous experience you’re less likely to engage with them and probably switch off”

‘Dark sides’

“Very often it’s more difficult because very often they see me as a competition and they don’t really want to share their knowledge” High value-added sectors

Who and what matters and why?

Finding #2: Despite the complexity, 4 key (non-public sector) actors stand out as important.

Internet (e.g. YouTube, Podcasts, Websites)

“I saw a lot of videos with Brian Tracey…Tony Robbins, and I’ve got about ten more people like that. I really get obsessed with that, to be honest…The knowledge they provide about business…how to employ people, how to manage people…how to work faster, how to improve the quality of the product, it’s all there”

High value-added sectors

“So the Internet is allowing you to find good quality things that suit you as opposed to sometimes local things where no one’s on your level”

Who and what matters and why?

Finding #3: Ethnic/cultural links or ethnic/cultural proximity are/is not as important as has been suggested.

 ‘broke the ice’ between actors  brought an element of empathy to engagements

Cognitive overrides ethnic proximity “I'm probably more interested in getting support from somebody who actually knows what he's talking about rather than…he's Chinese so I'd better listen to him kind of thing…a person’s…relevance to my business is more important than ethnicity”

Who and what matters and why?

Finding #3: Ethnic/cultural links or ethnic/cultural proximity are/is not as important as has been suggested.

‘Dark sides’

“Well I think it should be easier just because we assume we all want to help each other. However, in real life it’s not always. I really don’t earn a lot of money but I’ve got a nice shop and people would think I’m filthy rich and some Polish people would be really jealous…so I think there is a lot of jealousy and I think it’s spoiling a lot of contacts because I would like to be more friendly with

• ther businesses”

Who and what matters and why?

Finding #3: Ethnic/cultural links or ethnic/cultural proximity are/is not as important as has been suggested.

Low value-added sectors (language issues)

“Yes, sometimes as I said, talking in the Polish language is much more helpful for us, so like banking things and stuff that we are not specialists in, it is better if somebody could explain this properly or in your own language, because I was learning the English language in England and sometimes some of the words I understand, but I cannot translate them into Polish, this happens very often”

Who and what matters and why?

Finding #4: Support spans various spatial scales. Entrepreneurs utilise knowledge at both local and non-local scales.

“There is the biggest patty company in Jamaica I use and we use each

• ther. So, I go to his factory if I need any specialist advice I ask him…so

basically I will use the best rate company in Jamaica to implement what we do over here and vice versa. So I will talk to their technical people and they will talk to us”

Who and what matters and why?

Finding #4: Support spans various spatial scales. Entrepreneurs utilise knowledge at both local and non-local scales.

Local scale

• Validation of ideas
• Regulations
• Markets
• Ways of doing things
• Labour market

Non-local scale

• Idea/opportunities
• Innovation

Relationship between local and non-local scales

Non-local support/knowledge (Ideas) “What I’ve done is, when I see a similar vegetarian restaurant in London, for example, I like try my best to go to and visit those restaurants and see what do they do, how do they do it? Or how we are different, you know, what can we learn from them?... London in particular is a very good point of contact or a city of

• bservation for me”

Who and what matters and why?

Finding #5: Diversity and size of the city matters.

Diversity and size of city

“In terms of the diversity content of Norwich…I have seen people who have been to my office and tell me, in the city of Norwich, that this is the closest they’ve ever gotten to a…a black person. Now, you wouldn’t expect anyone to say that in the last 20 years in London. So, as I said, you have to approach it with a sense of

• proportion. Even from the level of exploitation of the standard you

are expecting of assistance and support, you have to be realistic

• f what you can get in Norwich, as opposed to where will it be

available in London…Even outside the perimeters of ethnicity. The fact that people have a history of relating with each other, and if they haven’t, it will necessarily influence their ability to respond to enquiries”

Who and what matters and why?

Finding #5: Diversity and size of the city matters.

Diversity and size of city

“The only slightly embarrassing one was the Chamber, they have like a draw, you put your cards in the basket and they pull it

• ut…and this lady pulled my name out and she got so

embarrassed because she couldn’t pronounce my name, you know?...and I thought ‘Oh dear, really shouldn’t happen quite like that’…people don’t really know what to make of you”

Who and what matters and why?

Finding #6: Public sector organisations are not as helpful as they could be for entrepreneurs.

Lack sector specific advice

“Business support came from Chamber of Commerce, Business Link…And I found, although I networked with quite a few of these

• rganisations, their business support advice tended to be quite

basic, you know, quite basic, and not specific for my industry. It was very difficult to source specific advice that was relevant…So, you know, it was quite difficult to get the specific advice”

Who and what matters and why?

Finding #6: Public sector organisations are not as helpful as they could be for entrepreneurs.

Lack entrepreneurial experience

“It goes back to what I said about Business Gateway…most of their consultants in Business Gateway will be people who have never run a single business…It’s like the example I talked about in the business planning. I don’t think any entrepreneur will tell me an idea I have is rubbish in the first instance. I think any entrepreneur who has gone through the ropes of setting up a business from start-up, who have known that no idea is rubbish. You only begin to look at it to find out what exactly was the thing that was seen behind it and find a way. Whether it’s going to make money or not is also a different thing, you know?”

Discussion with Entrepreneurs

 Blue Vine Consultants (Birmingham-based)  Abraham Eshetu Consulting (Norwich-based)

Session 4: Partnering for the Future: New Initiatives to Support Minority Entrepreneurs

 Chair:  - Professor Monder Ram OBE, CREME, Birmingham Business

School

 Speakers:  - Professor Mark Hart, Aston University  - Richard Thickpenny, Ashley Housing  - Saidul Haque, Citizens UK

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