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

 Centre for Research in Ethnic Minority Entrepreneurship  19 th 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 Birmin gham

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 4

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 20 th October 2015 7

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 11

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 of 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? 16

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, owner 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)