Ethnic Female Entrepreneurs
Dr. Panos G. Piperopoulos
During the last few decades small and medium enterprises (SMEs) and self-employment have been seen by some analysts as a panacea to economic challenges since SMEs comprise the largest portion of businesses in most developed and developing economies, offer the greatest potential for job creation, and contribute positively to economic growth competitiveness and productivity. During the same chronological period entrepreneurship as a theme among researchers, management practitioners and policy makers has witnessed a spectacular increase alongside government supported strategies targeting enterprise development initiatives and change of attitude to self-employment.
Despite the general thrust towards entrepreneurship and self-employment, the research and dissemination of information and scientific knowledge about female entrepreneurship has not kept pace with the impact these self-employed women appear to have on economies, especially while, small firms owned by women entrepreneurs are a growing phenomenon in today’s world economies. Female entrepreneurs in the USA increased from 1.5 million in 1972 (nearly 4.6% of all businesses) to 2.1 million in 1979, 3.5 million in 1985, 9.1 million in 1999 and climbed to 10.1 million firms (almost 37% all businesses) employing 13 million people and generating $1.9 trillion in revenues in 2008. Furthermore it is estimated that female entrepreneurs account for 25% of all businesses from Asian economies to Eastern European economies, around a third of all businesses in the UK and 26% in France.
Ethnic Minority Businesses (EMB’s) have also shown a notable increase in their numbers in the last two decades; the number of businesses owned by ethnic groups in the USA for the time-period 1982-1998, doubled, reaching an estimated 3 million businesses, which provide jobs to 4.5 million workers and generate $591 billion in revenues. A closer look at home reveals that ethnic entrepreneurs in the UK appear to own over 250,000 small businesses, which represent over 11% of all new business start-ups. Although research on ethnic minorities and female entrepreneurship represents a growing body of scholarly and empirical work, the ethnicity of female entrepreneurs is very rarely encountered in entrepreneurship literature.
According to the ethnic entrepreneurship literature, which is mainly based on research of male ethnic entrepreneurs, immigrants leave their home countries in search of a better life for themselves and their families and turn to self-employment in order to overcome negative experiences and block mobility in the labor market, or due to a cultural predilection towards entrepreneurship, or as an avenue of upward social mobility. A careful review of the current ethnic entrepreneurship literature reveals four main approaches that contribute to the understanding of self-employment entry motives and aspirations as shown in the table below.
Ethnic entrepreneurs are generally described in the literature as ‘sojourners’ who work harder, save money, spend less by living frugally, have preferential access to limited, low cost funding from family and community resources and use ‘social networks’ to find market opportunities as well as cheap labor. In this realm two germane questions do arise:
(a) Should policy makers and scholars treat female ethnic entrepreneurs as female entrepreneurs or as ethnic entrepreneurs?
(b) How do gender and ethnicity affect the entrepreneurial activities of female entrepreneurs?
According to my research, the average self-employed ethnic female entrepreneur is between the ages of 26-34, a married woman with children, has prior work experience, is educated and embarks upon traditional professions, merchandising and services. Age-wise the ethnic female entrepreneur is much younger than the average female entrepreneur but has the same personal attributes as any other female entrepreneur.
The majority of ethnic female entrepreneurs report that their business entry decision was influenced by positive, ‘pull’, factors such as the need to be creative, independent, take control of their own future and not simply perform the stereotypical housewife and ‘mother-caring for her children’ role. In addition, prior work experience and a motivation to acquire wealth facilitated their decision to venture on their own. Contrary to the literature on ethnic entrepreneurs (which is focused mainly on male entrepreneurs), female ethnic entrepreneurs differ in their motivations towards entrepreneurship from their male colleagues [most male ethnic entrepreneurs report ‘push’ factors such as unemployment, lack of suitable labor market opportunities, language barriers and ethnic/race discrimination as strong motives for self-employment] and, in my opinion, should more properly be treated as female entrepreneurs rather than as minority entrepreneurs.
The findings in my studies suggest that ethnic female entrepreneurs should not be treated as a homogeneous category nor should we rely exclusively on scholarly research focused on ethnic male entrepreneurs (as presented in the table above) in order to answer questions about their entrepreneurial behaviour and activities. Ethnic female entrepreneurs may share some common characteristics with their ethnic male entrepreneurial colleagues but ethnic women’s unique qualities, characteristics, motivations, background and business views distinguishes them from their male ethnic counterparts bringing forth more their femininity rather than their ethnicity.
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Dr. Panos G. Piperopoulos, Lecturer in Enterprise and Creativity, DPD for the MA in Arts, Business & Creativity, Newcastle University Business School
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