Ethnic Business Clusters in San Diego
How can ethnic enclaves and clusters benefit our communities?
A research proposal submitted to the Urban Studies and Planning Program
University of California at San Diego
Thao Nguyen
USP 186 Section A02
Ttn033@ucsd.edu
November 19, 2009
Abstract
This proposal outlines a research strategy to examine the concept of ethnic
business clusters in San Diego. Current research on clusters suggests that they
consist of groups of interrelated businesses that drive wealth creation in a region.
Ethnic business clusters, though, are not embedded in this cluster research. One
approach to this would be uncovering how ethnic business cluster is defined in the
proposed Little Saigon in Colina Park, a neighborhood located in City Heights as
a case study. The research design will be based on interviews, surveys, census
data and past scholarly analysis on ethnic enclaves and clusters. The different
avenues of research will bridge the confirmation of whether ethnic business
clusters are beneficial to the region’s residents in both forms of community and
economic development. This research will focus specifically on the idea of ethnic
business clusters. The research will contribute to the current scholarly literature
on clusters and how they continue to aid a region.
Key terms: ethnic business cluster, cluster, economic and community
development
Thao Nguyen 2
Introduction
There is research on the idea of clusters and how each cluster within a region
interconnects with one another to bring wealth to a region. With this research project, I will
branch cluster research with ethnic enclaves to embellish ethnic business clusters to gain an
understanding of how they bring about community and economic development. Through this
report, the definition of an ethnic business cluster will be determined by analyzing the definition
and successes of clusters and ethnic enclaves. This will be done through other scholarly research
and a case study with San Diego. San Diego is a very diverse region, but its diversity is not
recognized as part of the tourist industry. On the contrary, in San Francisco, they have specific
ethnic enclaves, such as Chinatown, that aid to their tourist industry annually totaling more
visitors to Chinatown than the Golden Gate Bridge (SFGate 2009). These enclaves are not only
important to serve as San Diego’s cultural tourist industry, but they also create a better ground
for immigrants and their living circumstances in these areas (Tseng 1994, 169). In addition,
ethnic business clusters have the ability to give economic stability to the entire region by the
increasing commerce activity. They also have the ability to transform the current living
standards including safety, violence and well being.
Through this study, I will determine how City Heights will benefit from being a Little
Saigon in relation to its location, the people living there, alongside cultural values and growth. I
will determine this by talking to community members, those planning this Little Saigon. I will
also review the history of City Heights and look into past Chinatowns that failed in the 19th
century (Lin 1998, 45). From that, I will be able to determine if this ethnic enclave and business
cluster will indeed benefit the neighborhood, its residents, and San Diego as a whole. This
includes the monetary value, such as business succession and also quality of life.
Thao Nguyen 3
Literature Review
Various scholars suggest that clusters are beneficial for a region. Clusters in terms of this
report will be defined as the geographical concentration of interconnected companies and
institutions in a particular field encompassing an array of linked industries and other entities
important to competition (Porter 1998, 80). Therefore, clusters thrive because its entities depend
on each other as they produce good and services for the international economy. Clusters are
important to competition as they increase the productivity of the area and also stimulate growth
because the increasing strength and expansion of the industries within the cluster. First, the
importance of building on current and/or emerging clusters while not creating new clusters must
be understood. By building on current and/or emerging clusters, we are able to take advantage of
the assets currently within community and enhance its ability to successfully thrive as a full on
cluster. An example of this can be ethnic enclaves and their attempt to become ethnic business
clusters, especially in San Diego with its creation of Little Saigon off of El Cajon Boulevard.
Currently, there is a large population of Vietnamese businesses if the proposed Little
Saigon site where surveys from the Little Saigon Foundation have shown an overwhelming
interest in becoming an ethnic business cluster, Little Saigon. This region in San Diego is not
highly recognized in the tourist industry as a place for entertainment and amusement, although it
could very fittingly be a part of this cluster. SANDAG notes that the entertainment and
amusement cluster “reflects San Diego’s international reputation as a tourist destination” (2009).
Unfortunately, the ethnic enclave proposed to be Little Saigon is not currently included within
that cluster. Instead, Little Saigon must be recognized as an ethnic business cluster and undergo
what Porter (2000, 21) refers to as “the process of cluster upgrading.” Cluster upgrading
involves “removing obstacles, relaxing constraints, and eliminating inefficiencies that impede
Thao Nguyen 4
productivity and innovation in the cluster” (Porter 2000, 26). For Little Saigon, this would entail
going beyond improvements in general business but working towards economic and community
development. This refers to the attempt in eliminating crime, increasing safety, enabling the
close proximity to jobs, providing job growth, enhancing culture and cultural beliefs, alongside
ensuring proper health and well being.
By building on this emerging ethnic business cluster, we are able to attack the issues that
are currently hurting the community, and grow upon the skills and assets that the people have to
provide. Also, the local people are able to get involved in a region they refer to as home shaping
the development of their community. These people are not only residents in the region, but also
potential consumers that will drastically experience the change (Boshma et al. 2005, 25).
Beaulieu emphasizes that the development of the community “seeks to uncover and expand the
knowledge and skills of the people in the community” (1996, 4). This form of community
investment parallels Porter’s idea of working with clusters that are emerging and building upon
its current assets to increase the productivity of the cluster (2000, 18). By investing in the
community holistically, the ethnic business cluster will not only be able to emerge, but it will
continue to thrive.
It has been proven that companies and institutions in one location foster better
coordination and trust (Porter 1998, 80). Many ethnic enclaves act as clusters taking part in the
international economy but have not been recognized as a cluster participating in the market
economy. The ethnic enclave has the ability to become successful if it adapts and is accepted as
an ethnic business cluster. This way, businesses are able to cooperate with one another, but also
compete. In order for an ethnic business cluster to thrive, there must be both.
Thao Nguyen 5
On the contrary, there is opposition in the belief of thriving ethnic enclaves. Pedace and
Rohn (2008) clearly believe that ethnic enclaves negatively affect wage and employment. They
note that ethnic enclaves hold very strong competing populations for the job sector in its area
because its residents are so closely linked in culture and language (2008, 3). Therefore, wages
decrease while employment becomes scare. Cobas (1989) would argue that Pedace and Rohn
fail to understand that “ethnic groups are not class homogeneous” (1989, 205) Simply because
one ethnic group has businesses concentrated in an area does not entail that all individuals within
that ethnic group come from the same social class.
Of course, clusters undergo different changes in history but Tseng (1994) describes that
“with the expanding secondary labor market…their economic bases can be expected to grow”
(1994, 171). Therefore, it acts as a transnational business enclave and ethnic business cluster.
These ethnic business clusters grow because they participate in both the global and local
economy. It is commonly perceived that those working in ethnic enclaves are the low income
and working class. Instead, Tseng (1994) notes in her study of Chinese business owners, “44%
visited their homelands at least twice a year and 50% of these trips were mainly business related”
(1994, 176) Therefore, we must foresee the potential that ethnic business clusters have away
from this common misconception and understand how ethnic business clusters can actually
succeed in society.
Even if the proposed Little Saigon on El Cajon Boulevard in San Diego is approved and
supported, this label is not enough. An active cluster is needed beneath the ethnic business
cluster and Little Saigon titles. It must be understood that although the existence of a cluster
makes such relationships more likely to develop and become effective, they are far from
automatically functioning on their own. Therefore, to ensure Little Saigon’s success, there has to
Thao Nguyen 6
be support from the grassroots level and investment in the belief of Little Saigon’s role in the
community for the future years to come. By combining scholarly research on clusters and ethnic
enclaves, I will be able to determine the pros and cons of creating an ethnic business cluster.
From there, I hope to have the knowledge to guide Little Saigon towards a successful future if I
foresee it being a worthwhile investment as an ethnic business cluster.
Methods
Research analysis for this paper will consist of interviews and other scholarly work to
define an ethnic business cluster. The El Cajon Boulevard Business Improvement Association
and The Little Saigon Foundation have begun to use the phrase “ethnic business cluster.”
Interviews with the individuals directly involved with the creation of San Diego’s Little Saigon
will enhance its definition in region’s context. Interviews with the El Cajon Boulevard Business
Improvement Association and the Little Saigon Foundation will help frame my understanding of
the area’s ability to become a thriving business cluster. This will enable me to obtain a hands on
approach with the people who are striving to make this a reality in 2011.
Through research, I want to determine how an ethnic business cluster’s location effects
how well of a cluster it can operate as, or if location is a player its success at all. In addition to
location, I plan on researching how certain land use issues are affected alongside proximity and
availability of public services in ethnic business clusters. Through this, I will be able to analyze
the location of the proposed Little Saigon and present hypotheses of how Little Saigon may
thrive post 2011. I would like to determine if this area currently serves as an ethnic business
cluster as earlier described in the proposal and if so, if there are any extensions and further ways
that this certain ethnic business cluster serves its residents and consumers.
Thao Nguyen 7
I will hold interviews of residents in the area to inhibit the community’s emotions
towards a labeled ethnic business cluster. I will utilize my conversational Vietnamese language
to obtain a wider and more intimate interview setting. From these interviews, the resident’s
voices of the proposed Little Saigon location are heard. Interviews will also take place out of the
community to gain a perspective of other San Diegans concerning the growth of this business
cluster.
Hard data such as census and voter registration numbers will be used in relation to this
project area. In addition, I am interested in finding information on the surrounding area of
people and their skills set. I will attempt to determine this through getting occupation statistic to
clarify if it is a predominately low skilled population or if there is a variety of skill levels in the
area as argued earlier in the proposal. Through this, I will further my discussion on whether this
Little Saigon can thrive as an ethnic business cluster.
Surveys will also be utilized and translated to get an anonymous sense of what
community members in City Heights feel about jumpstarting the Little Saigon. This will
determine of the current residents feel this is beneficial to them and in what avenues. These
avenues could be in business development, economic stability, cultural belonging, enhanced
economic and social opportunities, alongside their view if this is will better the community and
business district at large. Lastly, it will determine what is the utmost important aspect of this area
that needs to be improved on, and if this project can assist in that.
It is important to get the residents’ view before taking on a project in their neighborhood.
In addition I will talk to city officials for that area to understand their perspective and obstacles
that the foundations may face in trying to create Little Saigon. By understanding these obstacles,
I will attempt to determine what drives certain people concluding if money is the bottom line in
Thao Nguyen 8
the creation of Little Saigon, or if the goodness of people’s well-being and quality of life is
actually being considered. This information will be bias, but useful in gaining some perspective
with a new and unfamiliar commercial structure.
Geographical Information Systems (GIS) will be utilized to visually map the Vietnamese
businesses in the ethnic business cluster. GIS will also be used in other forms of data such as the
ethnic minorities that are residing in that area. GIS will enhance the research on the reality of
this area’s ethnic business cluster. GIS will also measure other variables in Colina Park and the
wider San Diego region such as income level and small businesses. Using GIS in this form will
determine where other ethnic clusters and/or ethnic business clusters may lie and the relationship
with the area’s income levels. By going on walkability tours, I will see where Vietnamese
businesses lay to do a GIS map. These walkability tours will also provide me insight on the
types of businesses are currently there to determine if this area can proceed as an ethnic business
cluster aiding to its local economy but also the international economy as well.
My research will aid to the current research on ethnic economies, because it provides a
twist to it including the idea of clusters. The idea of clusters has been around for sometime now,
but ethnic economies and businesses have never been a part of that in San Diego. This is
important for San Diego to treasure the diversity it holds, and also promote cultural diversity into
the region. Having this creates a sense of belonging and excitement for many of San Diego’s
visitors and native San Diegans.
Completing this research will consist of working closely with the Little Saigon
Foundation. They have previously obtained surveys and responses towards the Little Saigon
project that I will use in my research. By working with them, I will have stronger connections
Thao Nguyen 9
and will aid in my data collection. Interviews and other data collection will be aided by mentors
to smoothen out the process for this research proposal.
Outcome
By working closely with the Little Saigon Foundation, I will be able to encounter a real
life current case study. This case study is within Colina Park, a neighborhood in City Heights,
that is experiencing the transformation between and ethnic enclave into an ethnic business
cluster. This is a radical change, and through my research I will determine if San Diego’s Little
Saigon can be considered an ethnic business cluster that is expected to thrive.
Research will provide a welcoming and accepting view of these businesses as
competitive but also cooperative. This is to ensure that the old perception of ethnic businesses
failing and creating lower wages for a population is false. Instead, this paper aims to support the
idea that just because a community is ethnic does not mean they always earn less money than
other competing areas that are not comprised of mostly one ethnicity. The area’s outcome will
determine if ethnic business clusters will benefit the San Diego tourist industry as it does in San
Francisco. By supporting and investing in ethnic business clusters, San Diego can be positively
advertised as one of the most diverse regions in the nation. This is important for the people
residing in San Diego and those visiting to feel welcomed and enriched in all aspects that San
Diego has to offer.
I hope that by the end of my research on this issue, I will be able to determine how ethnic
business clusters can benefit the community and San Diego as a whole. There are many ethnic
enclaves in the San Diego region, but they are not embraced, as they should be. Tourist agencies
in San Diego skip over these ethnic enclaves that can be beautiful aids to the industry displaying
the diversity San Diego truly has achieved over the years.
Thao Nguyen 10
References
Traded clusters in the san diego region. 2006. SANDAG (accessed October 26, 2009).
Bealieu, Bo. 1996. Mapping the assets of the community: A framework for building local
capacity. Rural Health Institute.
Boschma, Ron A., and Robert Kloosterman. 2005. Learning from clusters : A critical assessment
from an economic-geographical perspective. Geojournal library. Vol. 80. Dordrecht,
Netherlands: Springer.
Cobas, Jose A. 1989. Six problems in the sociology of the ethnic economy. Sociological
Perspectives 32, (2) (Summer): 201-14.
Goldman, Marlene, and Jopling, Jasmine J. San francisco: Chinatown. [cited October/27 2009].
Available from http://www.sfgate.com/neighborhoods/sf/chinatown/.
Lin, Jan. 1998. Reconstructing chinatown : Ethnic enclave, global change. Globalization and
community. Vol. 2. Minneapolis: University of Minnesota Press.
Pedace, Roberto, and Stephanie Rohn. 2008. A warm embrace or the cold shoulder: Wage and
employment outcomes in ethnic enclaves. Center for Economic Studies.
Porter, Michael E. 2000. Location, competition, and economic development: Local clusters in a
global economy. Economic Development Quarterly 14, (15): 15-34.
———. 1998. Clusters and the new economies of competition. Business Review: 77.
Tseng, Yen-Fen. 1994. Chinese ethnic economy: San gabriel valley, los angeles. Journal of
Urban Affairs 16, (2): 169-89.