Bumpy road to business ownership: a case study of Eritrean entrepreneurs in the UK

Hagos, Sirak, Izak, Michal and Scott, Jonathan (2015) Bumpy road to business ownership: a case study of Eritrean entrepreneurs in the UK. In: 38th Annual Institute for Small Business and Entrepreneurship Conference 2015, 11-12 November 2015, Glasgow.

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Abstract

Objectives - Our paper contributes to understanding the dynamics of ethnic minority businesses in the UK by bringing to the fore a variety of factors inhibiting the entrepreneurial activity of these groups, and in doing so provides insights into the empowering and mobilizing factors of minority entrepreneurship. It aims uncover the factors that may explain their entrepreneurial propensity, and the success or failure factors of their entrepreneurial activities.

Prior Work - Given the diverse features of minority businesses and their economic importance (both potential and actual), surprisingly little is known about the entrepreneurial activity of people from refugee backgrounds. Understanding the different dynamics of this dimension of entrepreneurship is important because refugees are distinct from – and often lack access to ethnic resources generated within – well-established ethnic minority groups (Waldinger, 1990; Flap et al., 2002). The current research explores this theme and contributes to the existing literature by focusing on the entrepreneurial activity of Eritreans from refugee backgrounds in the UK. Approach: The paper utilizes the mainstream literature on ethnic minority businesses and conceptualizes a framework (motivated by research gaps) that draws from political, economic, cultural and social (and human) capital theories to explore the pre- and post-entrepreneurial start-up factors of Eritrean refugee entrepreneurs. Justified in terms of (1) methodological precedence in the study of ethnic minority businesses, and (2) the logic of qualitative fit for a phenomenon where there is limited literature, our research employs the interpretive phenomenological approach, utilizing a grounded theory strategy for theory building.

Results - The results indicate that entrepreneurs demonstrate strong ethnically driven behavior in their business activity, which points towards the centrality of ethnicity features in the entrepreneurial dynamics of Eritrean refugees in the UK. In consequence, these entrepreneurs often depend on financial and knowledge support from family members and Eritrean contacts in their pre- and post-start up process. Another major insight that emerged from this research relates to the influence of political factor in terms of obstacles and discrimination experienced from both regulatory bodies and the UK community at large.

Implications and Value - Based on the overall evidence, the paper suggests that social, human, and financial capital – as well as the degree to which cultural values are accepted, the level of proficiency in English language, and the risk-taking propensity of Eritrean refugees entrepreneurship – are the decisive factors of Eritrean refugee Entrepreneurship and that they may inform the wider reflection on the dynamics of ethnic minority entrepreneurship.

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