Immigrant Enterpreneur – Challenges of Self-Employment

Recent research has found that immigrants are by definition “risk takers” who are willing to try new things and are highly motivated to succeed, often for the sake of their families. Interviews with dozens of successful immigrant entrepreneurs found that they all shared the following traits: keen sense of adventure, reverence for education, love and respect for family, eagerness to collaborate, tolerance for risk and failure, passion often born of desperation, and a tendency to dream. Most scholars in the field of immigrant entrepreneurship now agree that immigrants choose to be self-employed due to a variety of factors of choice and constraint as opposed to one single factor.

             Factors such as barriers to employment (“blocked mobility”), the costs of immigration, language, racism and discrimination, and less access to traditional forms of capital may each push immigrants to start their own businesses. There is no doubt that entrepreneurship can be a survival strategy that may emerge in response to labour market discrimination. Also, self-employment may provide a supplemental  income that can act as an important aid to settlement. Becoming an entrepreneur in Canada, however, is not always an easy option to pursue. Interviews with entrepreneurs in Vancouver found barriers in terms of cross-national differences in the processes required to establish and maintain a business. Learning about business regulations, financing, suppliers and marketing in Vancouver took them a considerable amount of time and energy, though failure to do so can easily lead to business failure. American research has found that most immigrant entrepreneurs did not come to the USA with the intention to start a business. More than half came to earn an advanced university degree. This finding has direct relevance for Canada as the new Canadian Experience Class seeks specifically to retain international students who have come to Canada to pursue higher education.

           This program alleviates the US problem in which many foreign students with American science and math degrees are unable to obtain visas to stay in the country. The Canadian Experience Class could be a promising means of attracting and retaining international talent. Existing research gives us some clues as to characteristics of immigrant entrepreneurs. Using the Longitudinal Immigration Data Base in Canada for 1980 to 1995, Dr. Peter Li identified characteristics of immigrants that yield a higher or lower propensity to self-employment. He found that gender, the year of immigration, and duration of stay in Canada impacted self-employment. Arrival in better  economic years, longer residence in Canada, higher educational levels, older immigrants, and immigrants selected for human capital have higher odds of self-employment. Using 1996 Census data, Dr. Dan Hiebert found  evidence that linked propensity for self-employment among immigrants to their occupation. Immigrants who were drawn to niches that offer few opportunities for self-employment had low rates of entrepreneurship and, conversely, those who were over-represented in niches with considerable scope for self-employment were inclined to establish their own businesses. This shows that the propensity for self-employment is, to an important degree, determined in the regular labour market as opposed to being an intrinsically cultural phenomenon (i.e. that certain groups are “naturally” entrepreneurial).

           UBC Geographer David Ley interviewed 90 entrepreneur-class immigrants to Canada and found that many of them endured financial losses and ran mediocre businesses, including a heavy reliance on franchise operations. More than half lost money or broke even. In the end, many moved back to their native countries. He cautioned Canada to expect a loss of skills immigrants in the near term, fuelled by economic growth in Asia. (Wise5.ca)