Ethnic Entrepreneurship

Ethnic entrepreneurship

The process of resource mobilization and the importance of social capital for ethnic entrepreneurs

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Course:                                The social dynamics of entrepreneurship

Assignment:                        Individual essay

Name:                                 Lisanne Vermeulen

Student number VU:                 2565673

Table of content

Introduction                                                                p. 2

Problem definition                                                        p. 4

Theoretical background                                                p. 5

        Ethnic entrepreneurship                                        p. 5

        Resource mobilization                                                p.

        Social integration theory                                        p.

Discussion and conclusion                                                p.

References                                                                        p.

Introduction

        One of the most researched parts in the field of entrepreneurship is the study of resource mobilization. Every entrepreneur who wants to start his or her company has to deal with acquiring the necessary resources, such as financial capital, human capital, physical capital and intangible capital like social and cultural capital (Kloosterman & Rath, 2001).

        ‘Ethnic entrepreneurship’ can be defined as follows: ethnic refers to “differences between categories of people” and entrepreneurship is “the combining of resources in novel ways as to create something of value” (Aldrich & Waldinger, 1990, 112). Mobilizing the necessary resources for Dutch and Non-Dutch entrepreneurs is not easy for either group of entrepreneurs. Gathering the necessary financial capital to start a business is undoubtedly one of the biggest challenges in the process of business creation (Volery, 2007).         

        Different researchers have shown that ethnic entrepreneurs might have different grounds of becoming an entrepreneur (Aldrich & Waldinger, 1990; Volery, 2007), and different ways of acquiring resources (Thornton, 2011; Bhagavatula, 2010).

        Immigrants or ethnic groups tend to group together and live together with co-immigrants and co-ethnics. Other immigrants who have lived in a new country for a longer period can offer support in several ways. This makes the new immigrants feel more comfortable. Once they are settled in their new city, they will try to find a job. However, research has shown that immigrants might face obstacles when entering the labour market in their new country. These obstacles can be for example language problems, accreditation problems or education problems.  The obstacles make it harder to find a job for them, so they are more likely to find employment in another way such as becoming an entrepreneur. Prior research on ethnic entrepreneurship and the process of resource mobilization has shown that immigrant entrepreneurs sometimes acquire resources via different channels than ‘normal’ entrepreneurs. Ethnic groups can draw on the resources provided by their cultural traditions and ethnic social networks.