The immigrant status does not explain
individual immigrant entrepreneurial
paths.
General entrepreneurial skills take over while identifying
opportunities and progress in business.
Ronny Elovsson
Pooya Jahankhah
MASTER THESIS IN ENTREPRENEURSHIP (MSc)
2013-05-20
Tobias Schölin & Diamanto Politis
0
Table of Contents
Abstract ................................................................................................................................................... 2
Background ............................................................................................................................................. 2
Immigrant Entrepreneurship – Literature review .................................................................................... 5
2.1) The Kloosterman model of mixed embeddedness ....................................................................... 5
2.2) Motivational factors ..................................................................................................................... 8
2.3) Experience, background and culture ............................................................................................ 8
2.4) Refugees and other remaining immigrants .................................................................................. 9
Method and procedure for the study ........................................................................................................ 9
3.1) Design ......................................................................................................................................... 9
3.2) Selection of respondents ............................................................................................................ 10
3.3) Data collection ........................................................................................................................... 10
3.4) Analysis method......................................................................................................................... 10
3.5) Respondents interviewed………….……………………………………………………………11
3.6) Limitations………………………….…………………………………………………………..11
The Entrepreneurial immigration Theory of Science up to the point of mixed embeddedness including
analysis…………………………………………………………………………………………………12
4.1) Summary Interviews .................................................................................................................. 12
4.2) Vacancy chain opening (Market B) ......................................................................................... 133
4.3) Post industry/low skilled (Market C) ....................................................................................... 155
4.4) Post-industrial/High skilled Market (Market D) ...................................................................... 167
4.5) Motivation ................................................................................................................................ 177
4.6) Culture and Background .......................................................................................................... 188
4.7 Entrepreneurial skills ................................................................................................................... 19
4.8) Refugees ..................................................................................................................................... 20
5) Discussion ......................................................................................................................................... 20
Cited works ........................................................................................................................................... 22
1
Abstract
In this qualitative study we aim at identifying if a refugee verses other
immigrants take different paths in their entrepreneurial efforts as migrants.
We used a qualitative multi case method based on semi conducted interviews
within the Persian community, immigrant entrepreneurs in Sweden. A
revised model of Kloosterman´s mixed embeddedness was used for the
communication of the empirical findings (Kloosterman, Leun and Rath,
1999; Kloosterman, 2010). With the research question: How does the
establishment of entrepreneurial self-employment look like for refugees
(according to the UN definition including quote refugees) respective to the
other groups of foreign origin (according to SCBs definition)? Do the
refugees, remaining in Sweden, with entrepreneurial self-employment, differ
from other immigrants, particularly within their identification of
opportunities as entrepreneurs, and if so in which ways?
We found no
evidence that there should be any differences in the entrepreneurial
opportunity depending on the immigrant’s status. Instead general human
capital, entrepreneurial experience and adaptability to change including
macro level changes are identified as explanatory factors for the immigrant
entrepreneurial paths. The result questions, one part of Kloosterman’s
research, specifically related to the locked in effect among the entrepreneurs.
Background
Imagine yourself being an entrepreneur, interrupted and forced to leave everything you built up,
behind you. Then you enter a new country, as an immigrant entrepreneur, in an environment which
you might not know anything about. The paths to take for those individual entrepreneurs may differ
for several reasons.
In this study we aim at immigrant entrepreneurs and the individual behavior in the new settlements,
particularly related to refugees and other immigrants. One reason to lift up immigration is that
approximately 3% of the world’s Population-Immigrants account for 10% of the population living in
developed countries e (Riddle, 2008). Immigrants are further a group that is affected by the transition
into the market economy. According to Dahrendorf (1991) referred to by Donald and Landström
(1999) the transformation process in European countries in transition can be analyzed by three
different factors: politics, economy and society, which leads to political, economic and social
transformation. The immigrant entrepreneurs, also part of the transformation and the effects of their
entry to a third country changes over time.
Previous research show different views. Initially the culturist view state that specific immigrant groups
share solidarity including specific skills for success in business. This view was particularly used by
2
Glazer (Glazer, 1955). In the second- ecological view, two streams can be seen. On the one hand by
comparing modern economy and the economy of the Small Business class. In addition search for
patterns of spatial order including residents, neighbors and then the small business class according to
Aldrich. (Aldrich, 1975) With this view businesses are only open when there are offers for jobs and
services, dependent on the action from the majority in the market.
Recent research conducted by Kloosterman (2010) rice the need of immigrant entrepreneurship, at the
intersection of changes with socio cultural frameworks on the one side and transformation processes
on the other side. In this context, the two sides, referring to the supply side of the entrepreneur on the
one hand and the demand side, the changed market conditions, on the other. Then the interplay of
changes within those two sides becomes part of a larger dynamic framework of institutions on several
levels range from neighborhood, city, national and economic.
The opportunity factor within the mixed embeddedness view is quite important. This is due to the fact
that market conditions to a very high extent affect the specific segments where openings occur
according to Kloosterman (2010).
Therefor we will use a revised model of Kloostermans (2010) opportunity model based on the theory
of mixed embeddedness. By using various factors, including motivation we further explore the
immigrant entrepreneurs entering Sweden and in particular the relation between refugees and other
immigrants.
The term refugee here is defined according to the United Nations Convention Relating to the Statues
of Refugees-UNHCR (UN, 2013) summarized: any person in fear of being persecuted for reasons of
race, religion, nationality, membership of a particular social group, or political opinion, unwilling to
avail himself of the protection of that original country. (UN, 2013)
By getting a higher awareness of the process in becoming an immigrant refugee entrepreneur tools and
information can be developed and improved in order to ease up the process and in such case making
the communication for immigrant entrepreneurial goals more efficient.
How does the establishment of entrepreneurial self-employment look like for refugees (according to
the UN definition including quote refugees) respective to the other groups of foreign origin (according
to SCBs definition)? Do the refugees, remaining in Sweden, with entrepreneurial self-employment,
differ from other immigrants, particularly within their identification of opportunities as entrepreneurs,
and if so in which ways?
Here one can think that it might take more efforts, becoming an entrepreneur as a refuge for the basic
reason that adapting to a new culture which is not individually chosen is more time consuming for
various reasons.
However it might be easier to adapt to an entrepreneurial environment if you have previously had a
business background from your original country. In addition the influence and support from a big
3
family up to the level of cousins and siblings may in addition have positive effects on a startup
entrepreneur. But on the other hand, it might be that a big family may have negative impacts in
adapting to a new society. After all, the macro level factors also matter in some cases according to
Kloosterman (2010).
The area is specifically important as self-employed immigrants may end up in a steady increased
informal market, a market that may not function so well.
Kloosterman has identified (1999, 2010) these markets as part of the mixed embeddedness model. On
an individual level those immigrants may get embedded, unconsciously in an underpaid employment
or self-owned business without profit or growth potential. And further companies operating in those
informal markets may create uneven competition to the formal markets by not following labour laws
or other regulations.
Therefore, we aim at reviewing the behavior relating to how and why opportunity and necessity
openings occur as parts of the motivational effects (1). We take into consideration the previous
entrepreneurial experience, (2) the immigration status (3) and finally include the cultural/social/human
to the model (4).
With those factors applied to Kloosterman’s (2010) opportunity model we hope to find patterns to
assess if there are differences in entering a new market depending on the immigrant´s status.
We use Kloosterman’s (2010) opportunity model, because we need to consider the influence of both
the individual and the external effects on the entrepreneurs. Kloosterman’s model (2010) does take
into account both macro and micro perspectives as part of the opportunity or necessity development of
the entrepreneurs. But critics have merged from the original model of mixed embeddedness, as it did
not include micro level effects from the beginning. In addition Razin (2002) criticizes the mixed
embeddedness model for being both fuzzy and in many cases hard to validate empirically.
Case studies demonstrate various aspects of the economic milieu that influence immigrant enterprise
and provide some evidence for the embeddedness and mixed embeddedness concepts, but not the need
for a broader and more formal verification of claims based on these structures.
In Kloosterman’s (2010) opportunity model we have also identified that the factor human capital can
be misleading, particularly since it’s a very broad term. Kloosterman has not really defined his use of
human capital neither in the original Kloosterman (1999) model nor in the opportunity model
Kloosterman (2010).
Therefore we have used a revised model, where we exchange the human capital factor in the model
with motivation, entrepreneurial skills in addition to background and culture. By doing so we would
clearly focus on individual effects relating to opportunity identification. In addition human capital as a
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factor may vary in interpretation from competencies, general knowledge, being specifically gifted,
social and other personal attributes, which clearly is not so precise.
Lastly, to sharpen our result, we targeted the Persian people, from the south of Skane County
(Sweden) in who have migrated from Iran and speak the modern Persian Language. (Wikipedia,
2013).
2) Immigrant Entrepreneurship – Literature review
The Global Entrepreneurship Monitor, referred to as GEM (2013) consortium collects and analyses
entrepreneurship related research-quality data. The measures of national and regional entrepreneurial
behaviors and activities first used in the GEM (2013) project have been the Total Entrepreneurial
Activity (TEA) Index that focuses upon new business creation rather than self-employment. The
definition of TEA refers to entrepreneurial activity including both starting up and running new
businesses, up to 3.5 years after the start. The measures include adults between 18-64 years of age
according to Braunerhjelm et al. (2012).
Entrepreneurial activities in Sweden have increased in the past year (2012) with 18% and in an overall
European measure Sweden ranks in the lower half of the comparable European countries. (GEM,
2013)
The studies that are conducted on entrepreneurship out of necessity, identified within the GEM (2013)
model, show that those entrepreneurs, who have lower education and run smaller firms, expect their
firms to grow less. Nevertheless, despite these factors they are more likely to still remain in the market
(Poschke 2013).
2.1) The Kloosterman model of mixed embeddedness
The reason for using this model is lying in the thoroughness in delivering a multidimensional mixed
embedded model. On the one hand, the model takes into consideration the influence of individual
resources and cultural structure (micro level) as a reason for initiating and progressing within the
entrepreneurship. On the other hand, external factors that influence the entrepreneurial opportunity
recognition of the individual such as legislation, politics and economics (macro level) are combined
into the model. Taking micro and macro level influencing factors into consideration, two phenomena
follows. It may on the one hand, create opportunities for the right entrepreneurs with the right
resources to merge. On the other hand, it may force upon the entrepreneurs, embeddedness within a
certain market condition with little or no growth opportunity, the so-called locked in effect.
Kloosterman (2010) uses two main dimensions in order to integrate the micro and macro perspectives,
here identified as the Individual capital and the market growth. With such structure, four distinguished
market conditions are formed (A; B; C; D). All the four market conditions in this model are different
in that, if the entrepreneur’s initiatives are opportunity or necessity driven.
5
The model shall be seen as if there is an underlying opportunity (to identify) to strive for moving
towards the right top corner. In Figure 1, background and culture, motivation and entrepreneurial skills
are presented under the title of Total individual capital. The original Kloosterman model (2010) uses
only Human capital within this dimension as we previously mentioned. The fundamental dimensions
of the model here consist of total individual capital and the market growth, which are the main
influencing factors on the market conditions. With further elaboration on each market condition, the
matter is clarified further.
In our view Human capital is addressed in a very broad sense when it comes to entrepreneurial
behavior. As we intend to study the entrepreneurial behavior relating to the entrepreneurial
opportunity recognition, we intend to use the Kloosterman (2010) opportunity model in a revised
version. In this regard, the Human capital measures are broken down to a more direct measurement of
features that are influencing the entrepreneur directly. The revised version is referred to as total
individual capital and it consist of individual motivation, entrepreneurial skills and background and
culture.
The model is used, in order to identify, what markets our respondents enter a certain market and how
they progress. Here, we look both on the national level, with regulations and politics as well as the
local level, referring to family, friends and neighborhood influence. Below follows the markets
identified and categorized by Kloosterman´s (2010) opportunity model based on the mixed
embeddedness.
The high skilled stagnating sector (upper left module named market A) can be considered not as
attractive for high skilled staff as it’s a stagnating market. Kloosterman (2010) therefore leave this
market without analysis, which this study also does.
Figure 1:
Revised model of
Kloosterman
(2010)
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The vacancy chain (Market B) here refers to markets which in general are mature but with limited or
no growth opportunity. In this window the entry barriers are low for immigrants in terms of entering as
new immigrants. Recruitment is also progressing within the window as long as new immigrants are
ready to take over. This vacancy market does not take much investment to enter and regarding
individual human capital it includes limited skills of the new market (Kloosterman, 2010). The
vacancy chain process here refer to the fact that the most motivated entrepreneurs leave the most low
played opportunities and try to climb the ladder for more prospers business, in turn leaving new
opening for other newcomers Waldinger et al.(1996).
The Post-industrial /Low skilled market (Market C) has one big difference compared to the previous
market window that is the growth opportunity in these markets. With a fairly low skilled individual
demands, the entry barrier is still low. For entrepreneurs, with certain skills for innovation it’s a
perfect market to enter as a newcomer from developing countries. In these markets one can find a
business within the early phases of a lifecycle or also new markets such as various services
(Kloosterman, 2010).
There is also a difference in the sociability. Adapting to new networks and identify potential customer
groups specifically outside the individual´s ethnicity, is important in order to succeed in this category
according to Kloosterman (2010).
In the Post- industrial /high skilled market (Market D) Academic studies, high social competence and
a vision for opportunity are factors necessary in order to succeed within this market, hence the
threshold level is quite high. The market is fast and rapidly growing, much due to the global free
market in a macro perspective, where movement of capital, resources and skill is expanded between
countries.in this market we can see, many well educated students from outside OECD countries,
including Chinese and Indians (Kloosterman, 2010). There are many technical firms, innovative firms
within this market. On the individual level it’s a very heterogeneous group which ad values to each
other’s networking. In each one of the markets the first steps are driven by either need or opportunity
identification.
2.2) Motivational factors
The word motivation does not have a single accepted definition, according to the nature of
phenomenon. But in general motivation includes direction-how to perform, efforts-how hard to reach
that performance, and finally the persistence-how long one is trying before results are reached. After
all, people do differ in motivations of becoming migrant entrepreneurs. Recent studies have shown
that unemployment is one of the main motivations in initiating entrepreneurial inclinations among the
immigrants (Reynolds et al., 2001). An opportunity too good to resist, a recommendation within
family, monetary motives, freedom of being your own boss, social prestige and financial freedom are
among the most motivating factors too (Husam, 2011). Looking at the matter from the nascent
entrepreneur’s perspective, two of the earliest motivating factors are the desire to take risk and the
7
spirit of adventure (Knight, 1921) in addition to the desire to innovate (Schumpeter, 1934). Moreover,
motives may also differ between genders where females strive mainly towards independence within
the family in the developed world. Men on the other hand, are mainly influenced by job dissatisfaction
(Kirkwood, 2009).
Hence as explained earlier, the motivation in an immigrant entrepreneur can be triggered through
variety of means. The Important perspective that is taken into consideration here is if these
motivational factors are driven by necessity or opportunity. The necessity entrepreneur is more need
driven whereas the opportunity entrepreneur is viewed as an entrepreneur who initiates a business in
order to pursue a recognized opportunity. A voluntary pursuit of opportunity entrepreneurship should
reflect the opportunity group and necessity entrepreneurship is referred to activities that occur in the
absence of other employment possibilities (Reynolds et al. 2001). This definition will also be used in
the current study.
2.3) Experience, background and culture
In the previous chapter we discussed the difference in entrepreneurs’ motivations. On top of
motivation the role of background in forming an appropriate entrepreneurial attitude is vital. Studies
prove that background, culture and demographics have direct impact on success or failure (Byers,
1997). Moreover, Education and academic background compliment these factors. A study conducted
by Davey et al. (2011) shows that developing economy students are more likely to imagine a western
career with entrepreneurial ambitions than their counterpart in the western world. Even within the
higher education students, there are studies showing differences for example technical students in
Turkey who were more creative than humanities students (Qasemnezhad, 2012). Other recent studies
also point at the likelihood of becoming an entrepreneur in a host country depending on whether you
are brought up in urban or rural geographic locations. The results show that even origin-habitual
factors relates to entrepreneurial activities (Bauder, 2008). However recent studies prove that, one can
also see that the culture differs, both in terms of the culture within family and the social structure of
the country of origin (Foreman & Peng-Zhou, 2013). Persistence and Strength in the culture were
considered as main variables of whether or not entering into entrepreneurship. Immigrants and
particularly non Europeans and refuges are particularly vulnerable upon entering new cultural markets
(Green, Kler, & Leeves, 2007).
Adapting to a new culture is not less important for an entrepreneur as he also has to adopt to a new
market and in many cases a different business culture as well. A better understanding of a local culture
helps the immigrants to feel more emotionally secure and by doing so faster and better adopting to the
new culture (Deumert et al. 2005).
Much of the different outcomes in these entrepreneurial efforts refer to the human capital of the
individual entrepreneur, including his abilities and skills achieved in the past (Panayiotopoulos, 2006).
8
2.4) Refugees and other remaining immigrants
There is little research conducted that covers the differences between refugees and other immigrants
(economic, bound-pretending refugee motives) and their success as entrepreneurs in the host country.
One way to describe some of the differences between those groups is a study in Political migration
(Schaeffer, 2010). Here Schaeffer argues that refugees in most cases have a choice of staying, in
political minority settlements and avoid the integration into host country. With pressure in nondemocratic countries, the longing for freedom and other democratic rights, forces them to take the
decision to move. In the situations of war and ethnic cleansing people do not usually have a choice,
but rather to grab what they can and fly for their lives due to the threat.
Economic immigrants do not have to fly for their lives, they have a much larger freedom to plan and
choose their path than other immigrant groups (Schaeffer, 2010).
3) Method and procedure for the study
3.1) Design
We conduct an explorative qualitative case study by using a semi conducted interview method. We use
a Multiple-design in order to enrich the study, covering a broad theoretical insight from previous
research, combined with the respondents’ empirical data. The choice of multiple designs is taken, on
the one hand to gain broader aspect from several respondents for replication and on the other hand to
clarify both similarities and differences among the respondents. In addition, the study holds two broad
dimensions, the refugees and other immigrants, where a multiple study would be necessary to identify
similarities and differences, if any within the group.
The first step was to develop the theory, where we initially used Kloosterman’s (2010) mixed
embeddedness who combine both individual (micro) factors as well as factors, political and legislative
factors (macro), explaining the various markets for immigrant entrepreneurs.
3.2) Selection of respondents
Dealing with an ethnicity for entrepreneurs in many cases is a challenge, if you do not belong to such a
network. But in this study we used a screening of an informal Persian network within the region of
Skane County. With defined operational criteria for the screening we reached the goals for a proper
formal data collection (Yin, Case Study Research, 2009).
The selection criteria was 1) Persian 2) Entrepreneur 3) Either refugee or other immigrants 4) Within
one region of Skane and 5) with current remaining business. The selected respondents came from an
informal network within the Persian community. We paid extra attention both to find respondents
within the main two criteria refugee and to other immigrants. With life stories from the respondents,
we develop insight from the entrepreneurial experience during the analysis. We used them in a context
of semi-conducted interviews, relating to the startup and development process of the respondents’
9
businesses and their previous background from their home country. Further the transition to their new
country and their progress within entrepreneurship, including skill improvement in their new country.
3.3) Data collection
As we conducted a multiple case study, the first step was to develop the theory. With an initial pilot
study our aims matched the initial developed theory and we continued with the original selection
criteria.
The interviews were recorded and transcribed directly after. In order to get the stories genuine, the
interviews were held in Persian, and translated to English.
After the first collection of the transcribed interviews, we initiated the analysis, applying the empirical
results on the original theory. Evidence was sought regarding facts and conclusions from each case
(Yin, Case Study Research, 2009). In addition considerations were taken to how and why replication
occurred between the multiple cases.
As important discoveries were developed we used theoretical feed-back loop (Yin, 2009) in order to
further develop related theories.
3.4) Analysis method
The analysis method used was according to Langemar (2010, s134). Initially we used open coding for
each interview, reviewing all data from each case. We specifically looked for repetitive patterns within
each case and there after both groups were compared. Special attention was paid to commonalities or
differences between the two groups, if any.
Relevant data from each case was then summarized. In the second stage we used selective coding
within main categories (motivation, background, immigrant status, education, market entry, failure).
At this stage we selected by judging the most repetitive expressions among the respondents within
each category. We also interpreted where the market entry occurred according to Kloostermans (2010)
market windows.
In addition with each case we tried to identify the impact of macro and micro effects that may have
benefited or limited the respondents in their opportunity identification.
All data used are result of subjective measures. Self-experience interviews were made and the
interpretations have been conducted from those interviews. In order to visualize the statements from
respondents we then picked out representative quotes, statements that supported our findings.
At this stage we coded relevant facts “quotes” within each category. In the third stage, we used
theoretical coding, by applying characteristics of Kloosterman’s windows, on macro and micro level
effects. Theories were used explaining additional results. In order to validate our findings we argued
between the authors for the common results so the claims we made indicates reasonable interpretations
of the results. A final aspect for validation was the data collection; the only relevant information was
collected from the interviews. A critical analysis was also conducted both from previous theories and
the results within the study (Langemar, 2010, p 108).
10
3.5) Respondents Interviews
Demographics
Farhad
Behzad
Mojgan
Morteza
Birth
Age
Sex
Immigrant status
Persian
46
Male
Refugee
Persian
55
Male
Refugee
Current business
sector
Firm size(staff)
Years in Sweden
Years in business (current)
Education
Failure experience
Retailing(FMCG*)
Services
(Taxi)
52
23
16
12th grade
Yes
Persian
40
Female
Other
groups
Technology
Persian
56
Male
Other
groups
Engineering
5
3
3
PHD
No
15
20
10
Graduate
Yes
3
26
3
Bachelor
Yes
Figure 2: Respondents demographics ‘(FMCG=Fast Moving Consumer Goods)
3.6) Limitations
The study does include some limitations. Since we only use respondents within the Persian community
we have limits in the demographics, which include different arrival dates into Sweden, different age
groups and different educational levels. Therefore some of the findings have to be taken with
precautious considerations.
Further, when it comes to the identification of the opportunity recognition it includes various
industries, in itself with different characteristics, indicating that market entry, opportunity recognition
and operations are partly unique within each one of those industries.
In addition the use of Kloosterman (2010) opportunity model has been criticized for its complexity
and difficulty of validation.
When it comes to the total amount of respondents we only used four. In that case, for individual
response (micro level) we could identify repeated patterns. Nevertheless, Kloosterman’s four different
windows make it impossible to trace repeated patterns with so few respondents in macro level, mainly
because most respondents ended up in a different opportunity window.
Finally in some of the cases, time from the action and the actual interviews are many years and in
addition self-expressed by the respondents, and therefore the stories told may include inaccurate
memories or inaccurate judgment of the experienced situations.
After all, the findings will be valuable for the audience but the limitations must be underlined while reviewing the results and
the discussions.
11
4) The Entrepreneurial immigration Theory of Science up to the point of mixed
embeddedness, including analysis
4.1) Summary Interviews including General findings
In the following section we have summarized the four interviews made.
Farhad (refugee): grew up in an academic family, with his parents starting their own business.
Because of the political background the family could not take governmental working positions. Farhad
was motivated by being like his father, starting his own business. He could not go to university
(politics). As Farhad arrived in Sweden he started within an ethnic network a pizza shop, a necessity
for job, parallel with university studies. After some time an opportunity finally occurred within trade
of hardware. The success lasted for about 8 years and then Farhad entered the retailing with trade of
soft drinks.
Behzad (refugee): came from a family with business background. He likes to make money and his
entrepreneurial direction was partly motivated by the fact that he wanted to be his own self-employed.
His first business background as self-employed came in Teheran where he co-partnered with a clothes
manufacturer in order to find a living for his family. After immigration to Sweden, Behzad was forced
to find a job again. He entered a fiberglass producer as work labor but got a lung disease so he had to
quit. Then an opportunity came for him to start his taxi business. Eventually he grew his business
despite the challenge after the deregulation of the taxi industry.
Mojgan (planned immigration): was brought up with a self-employed father, developed an academic
career within geology, a post graduate exam. After some successful years she was influenced by other
colleagues in her network, to try the western life. Mojgan ended up in Lund, got an opportunity to start
her own business founded partly by LUIS. She got her first customer 2012 and at time of the interview
she was in a process of market her application idea throughout Sweden.
Morteza (planned immigration): originally came from an academic family. Motivated to study and to
see different parts of the world, he got his engineering school initially in the Philippines. During the
war the embassy pushed the foreign students to return back to Iran. Morteza however, now with many
western friends took the chance to enter into Sweden. He continued academic engineering master
studies here. Parallel with studies he got a job for a Swedish construction firm which later got
bankrupt. After some work within the municipality Morteza got an opportunity to enter the recycling
business, at time not developed, in the early 90´s. The business expanded over the years, but it was
challenging for him as part of the market was informal, leading to threat and other hazel within the
community.
General findings
In the model below we have summarized the interpretations of the interviews by mapping each
respondent’s respective market they entry and their progress.
12
Within both groups (refugees and other immigrants) we did not see any differences. However there
were a tendencies witnessed that the less educated respondents initially ended up in the low growth,
low threshold markets. Interestingly a common trace was found, in each case something unpredictable
had occurred prior to the opportunity recognition, like an illness, being released from a job position, or
denial of a job.
4.2) Vacancy chain opening (Market B)
In our view examples of these markets in Sweden can be a local Pizza and Kebab restaurants, tobacco
kiosk, a single driver taxi, a gardener, a tailor or a shoemaker.
Our results identify the entry into Kloostermans (2010) vacancy chain window among several
responding entrepreneurs. Farhad entered the first Swedish business more of necessity motivated to
generate income for his family. Farhad express it in the following way:
“I started the shop (pizza) with a friend and my brother. We were all Persians (homogeneous). It was
hard as we did not have any experience in the beginning (low skill). We had many challenges (low
profit), the guy who sold the place cheated on us (informal market)……… After one year we decided
to contract out the pizza shop. It was good deal for us. We managed to get things done with a good
price on a very bad economic condition. Eventually I sold the shop and moved on (sociability and
adapting to changes-learning).”
According to Kloosterman (2010) there are “mixed blessings” with the vacancy chain opening, which
we can see from the response of Farhad. They entered the ethnic pizza market, all Persians, with
minimal skills (low entry barrier), they had to trust their social network, which they did, but they got
cheated. Kloostermans (2010) view here is that the vacancy chain on the one hand put pressure on the
individual capital, for instance knowing how the market works but in addition there is a looked in
effect by the ethnic market which in many cases creates an informal market due to the high
competition with little or no growth. This leads to low profitability with low salaries not reaching the
13
minimum legislation of salaries. The social embeddedness in this case, meaning the need to trust
others, in order to get a chance to act in the market is important. However in this case, Farhad learned
fast by selling his business and moved on (Portes, 1994). The importance here is to learn to survive
and to manage the right strategies in order to progress in this ethnic informal market. Kloosterman
(2010) underline here the overlap of social capital with ethnic capital.
Behzad, also refugee, got out of necessity also in through the vacancy chain window, after he was
forced to quit his employment due to unhealthy lungs. His offer through his social network was a
single taxi business, expressed here below:
“…So not again no job for me for a while! For 6 months I had my pension to find a new job, but after
1 month, I got bored and I thought I have to find a work before this period is over. So my brother
advised me to start with the taxi, as it was easy and the market was good as well.”
Here we can see a replication of the ethnic market occurring within the vacancy chain window and the
ability on the individual level to adapt to the market and use of the social network. But it was also the
effect on political level (macro) opening for the opportunity to start taxi was easy. A taxi driver just
needed to apply for a license and passing a test, including limited investment (Urban & Slavnic, 2008).
The deregulation of the taxi market created many opportunities and some of them like in Behzad
example eventually moved on to next level the Post-industrial, low skilled market, by growing his
business.
The necessity driven opening for Behzad in our view came from the expression where he got bored
with his unemployed. We explain this by the fact that he had full responsibility to take care of his
family, so for him starting the taxi was most likely a release, as income for the family was a must.
In this first part of the study you can clearly see how those respondents enter their career here in
Sweden in the vacancy chain openings, much due to their co-ethnic embeddedness. Our revised model
has come into clear use because the original model with human capital as explanatory factor wouldn’t
identify the opportunities from Behzad and Farhad here so easily. But by following the revised factors
like entrepreneurial skills, which particularly can be seen in Farhads case and the motivation out of
necessity due to that both respondents had to support their families, indicate that they had a longer
vision and that they wanted more than just getting a job. They were both very open to changes, curious
and made fast decisions, kept learning from their necessity driven opportunities, which gave them new
chances.
It is also notable here that the risk for the respondents of the “locked in effect” must therefore have
been higher, even if for them it was not a conscious or even obvious risk. As our revised Kloosterman
(2010) model also indicates the market entry of Behzad and Farhad were both in stagnating markets,
with increased competition. This indicates that the necessity path took place due to their limited
education and the embeddedness in the co ethnic market according to our view.
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4.3) Post industry/low skilled (Market C)
Behzad got the opportunity to grow his business, with or without knowing the effects at time of the
deregulation of the taxi-market during 1990 (Urban & Slavnic, 2008):
“All of the sudden there was an opportunity in Skurup. This company had several fixed trips in a day
for handicap people and students and sick people. So it was not very much dependent on the market
changes and the economic condition……. We came to know that we could participate in different
auctions for different deals about fixed taxi rides for the government“
With this quote we can see, on the one hand that Behzad acted on the opportunity to buy a friend’s
firm. He also stated that he learned to negotiate for fixed governmental fairs (improved skills-micro
level). According to Kloosterman (2010) individual skills including improved learning, in this way,
how the business works, is the way out and up towards a market growth, which we can see in Behzads
case. In addition to reviewing the interviews on the macro level, many drivers previously in business
(before deregulation) sold their firms. These decisions started because of the insecure deregulated
market with variable costs, which stressed the older taxi firms, to sell off. The intension of the
deregulation (macro level) was to generate a more efficient market with flexible competition for fair
prices (Urban & Slavnic, 2008). Behzad expresses the taxi-firm purchase as an opportunity; we argue
that this opportunity came up in addition to individual skills (micro level effects) also due to macro
political decisions. But Urban and Slavnic (2008) underline that the quality only partly improved after
the regulation and that pricing only slightly were reduced to specific groups, like for the public
procurements (schools, hospitals). So Behzad, as an entrepreneur, had to fight in the same market with
less money for the same mileage, as he grew his Taxi business. The fact that he managed to focus and
generate public offerings (schools, hospitals =fixed rides) most likely saved his business growth.
Behzad expressed it in the following way:
“We came to know that we could participate in different auctions for different deals about fixed taxi
rides for the government”
Within the Kloosterman (2010) mixed embeddedness model, moving from one market (ethnic market)
to the next level, the Post-industrial/ Low skilled market needs sociability and strategy as mentioned
previously to maneuver towards the next level. Behzad according to our view was motivated to grow
his business which in combination of his strategically decisions took him to the next level. However
what we didn´t learn from Behzad was how well he adapted to the deregulation in the sense using his
drivers for longer hours with the same payment. Did Behzad in a way succeed as entrepreneur on
behalf of other drivers locked in within the ethnic community? In Kloostermans (2010) theory this
would be part of the informal market, which we do believe was used here unintentional by Behzad.
15
One additional argument is that the employment system among taxi drivers changed from fixed to
result driven salary (NUTEK, 1996). The effect of which is that the companies reduced income,
transferred over to the individual drivers by reduced per hr. income compared to the same mileage.
Also Farhad made a career from the vacancy chain opening to the post-industrial /low skilled, where
his trade was in hardware goods but without internal innovation of his business, we kept him in this
window. Farhad used his network within his family (micro effect) in a business segment at the time
where the need of hardware, the market-growth, was growing fast (macro effects). One can also see in
Farhad case that the education he got after the pizza-shop and the employment as engineer in a fairly
big firm, most likely was to his advantage as he developed his own business throughout the Nordic
Market.
Morteza entered his business in the same window the post-industrial/low skilled with the recycling
business. In his case, the municipality of Skurup sponsored him for a year to research on better ways
of recycling wastes. With a functional model he got the opportunity to start his business. We argue
that this case was supported on the one hand by his individual skills (micro level) and on the other
hand, the problem for governments where citizens generate too much waste, and the awareness in
general around recycling took off (macro effects).
Morteza expresses his entry to the recycling business in the following way:
“Most of the recycling factories gathered all the toxic substances and just burnet them all together
and put them under the ground back then. Plus they never cared about re-usage of the building
materials.”
Morteza showed entrepreneurial skills clearly. He fetched an academic degree and also paid attention
to that he did not enter the market within the vacancy store, most likely due to his academic
background. It was not a surprise that he entered an expanding, novel market, even not high-tech,
which is also in line with Kloosterman´s (2010) model. Kloosterman states that the model can be seen
as striving from the bottom left to the top right position in the model. Education and individual skills
are key factors here, in order to make a career towards the growing markets. In Morteza’s case we can
also see that we got macro effects, as his entrepreneurial opportunity is related to the time where waste
and recycling was initiated with a higher focus from politicians and society. Further the investment in
this market seems not so high, so the threshold level was low, creating a recycling line of waste
materials.
4.4) Post-industrial/High skilled Market (Market D)
Mojgan entered the entrepreneurial career in the Post-industrial /High skilled market. After a long
career she and some of her colleges migrated, all with high positions and academic professions on
their CV. Mojgan expresses it like the following quote:
“All the heads of the department that I employed are now out of Iran working in a high position in
different countries, in GIS departments or even being entrepreneurs… Chosen to come here for a six-
16
month course……… I founded the company in July 2011 with another partner of mine who was a
PHD student and LUIS back up. I got introduced to Ideon and started working here.
Mojgans quotes expresses the need for, on the one hand high qualification in her case within the field
of technology and also her experience and previous career as a high skilled manager Kloostermans
(2010). She got tempted to peruse a career in western countries as she expressed, that so many of her
friends left the home country for better wages and life style. Here, we see like in Schaeffer´s (2010)
study that opposite refugee, other immigrants do have a much larger freedom to plan and choose their
paths. In addition Mojgan did not enter any low entry barrier market and hereby avoided for instance
the ethnic market in Kloostermans (2010) study. But also for Mojgan we can replicate that according
to the Gem (2013) report, there is a movement from non OECD countries into the western innovative
markets, leaving policymaker to ease up entry within special criteria of expertise. The individual
effect of these macro level factors for entrepreneurs are for instance working or study permits
(migrationsverket.se)
But with Mojgans entry to Sweden, has changed in the transformation to the global market. Even if
Mojgan in this study entered a high growth, high skilled market, it can be an effect of the overall
global transformation into high technology and a global network of high skilled well educated people.
The other respondents in the study entered Sweden much earlier where the markets have changed over
time.
4.5) Motivation
Starting a business with the need factor was common among respondents and in line with
Kloostermans (2010) research too. Even if it in some cases was expressed as an opportunity,
something had changed in their lives prior to entering their business field.
“I needed to make money, we only had a student loan by then and I was married at the same time.”
Farhad
Behzad´s comment, prior to entry into the taxi business:
“They found out that I had allergy to fiberglass and my lungs are damaged and I have to stop that
work too.”
Behzad
Morteza´s comment before entering the recycling business.
“Well after all, we all had to leave the company because of bankruptcy.”
Morteza
Even for Mojgan you could see that her first choice was to get employed within the science field, but
she failed to reach an employment and instead got the opportunity to initiate a business idea through
LUIS (Lund University Innovation System).
17
“But unfortunately, my qualification was so high that it was almost impossible for me to find a job…
There was basically no organization that needed someone with a post doc degree to join them.”
Mojgan
And Mojgan further underlined family reasons, as part of her efforts in becoming an entrepreneur.
This is partly different from the men, which also was found in Kirkwood´s study (2009).
Common for all respondents are that they had use of their motivation in their entrepreneurial progress
and particularly when something unexpected happened. They did not give up and even with necessity
they kept on striving for something more in line with their entrepreneurial targets. In Kloostermans
(2010) opportunity model you can identify the human capital, but it does not mean he particularly
points towards the strong motivation and the entrepreneurial skills we identified in our interpretations.
Strong motivation supported the respondents not only on the micro level but also, within their family
and their personal development, but also in coping with macro level issues as well. Mojgan for
instance, was striving with the university trying to understand its principals before she learned how to
become an entrepreneur under the umbrella of the university. Behzad further was motivated to learn
everything about the Taxi structure and its regulations, he never settled with “just being a driver”.
4.6) Culture and Background
With exceptions of Mojgan all respondents mentioned language as a barrier in entering Sweden as
entrepreneurs or workers. This may be an effect that we have an international language working
throughout the world entering the high skilled high growth market.
In Kloosterman´s (2010) opportunity model as well as in our revised version you can see that when
most of our respondents entered Sweden they came in through the markets with low threshold level.
So here, we can replicate from Kloostermans findings that lack of language or lack of education most
likely leads to necessity driven work together with the social embeddedness (the strong culture).
The wider social network within the Persian community was also mentioned, in several ways. The
support came either from family, cousins or friend’s network, also replicated in recent studies
(Foreman & Peng-Zhou, Jan2013). It was used mainly for contacts, financial support or for advice.
Another observation we made, was the fact that all of the respondents had a business background from
their families. Mojgan and Farhad expressed it in the following way:
“So as a self-employed he (the father) had many people working for him. From my point of view it
definitely affected me because I noticed that my father can provide us with everything.”
Mojgan
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“In Iran especially in my family because of my family’s political activity that they had, they couldn’t
work for the government. They had to start their own business as by then most of the public sectors
were owned by government.”
Farhad
Our interpretation here is that it may be easier to initiate and motivate a career of entrepreneurship, when brought
up among family and friends who previously have been self-employed.
4.7 Entrepreneurial skills
Among the respondents there were never any expressions for giving up, even with the experience of
failure and threat, new directions were taken.
“So, I was doing pretty good and continuing to expand, until the competitors started attacking my
working environment at nights. They started to break things, rubbed the goods, burned my workspace
and created lots of problems for me. But still I was continuing.”
Morteza
Sarasvathy et al. (2011, s70) underline the importance of handling failure in a proactive way for
entrepreneurs. She expresses it in the following way which really makes entrepreneurs differ from
other groups.
“…failing a business does not mark you for life as a failed individual, and if you can overcome the
grief of a failed business and learn from it, then you have a fair chance of doing better (smarter) the
next round.”
All Our respondents except Mojgan experienced failure, in their achievements forward and they
learned from them.
The ability, even out of necessity to develop a business was there, we identified this in several cases.
The indirect macro level effects in Kloostermans model (2010) was replicated as a part of their
growing business opportunities. The networking ability through family, friends and others were also
common among the respondents. In other words they used their means while developing their
business, which is also in line with Sarasvathy et al. (2011) model. Financing was never really a
problem for this group, even if we could not judge how the financing was generated. It was always a
way out for these respondents in their entrepreneurial efforts.
4.8) Refugees
There was a slight overrepresentation in the category of vacancy chain openings of Kloosterman
(2010) for the refugees, but it also involved lower education for these two respondents upon entry to
Sweden. In addition to planned immigrants, refugees entered Sweden at a later stage, when the market
conditions for entrepreneurs were also changed, which is one reason why we couldn´t use this
tendency as explanatory factors for the refugees.
19
With these findings in addition to the fact that we could not see any other clear differences between
the two groups, we argue for the fact that the human capital supported these entrepreneurs in their
progress forward. In our version particularly motivation, the entrepreneurial skills and experience in
addition to the ability to handle the environmental changes were the most solid stimulator of their
success.
5) Discussion
At an initial thought, one can think that traumatic experiences are combined with refugees entering a
new country, which in a way limits those people to move forward. But it appears in this case that after
healing and by depending on a strong human capital in addition to the entrepreneurial skills supported
those entrepreneurs forward. Further the strong entrepreneurial motivation to move forward and to
handle failure supported the respondents in finding new opportunities and transfer from employment
to self-employed or entrepreneurship, in some cases very successfully.
The research question: How does the establishment of entrepreneurial self-employment look like for
refugees (according to the UN definition including quote refugees) compare to the other groups of
Immigrants (according to SCBs definition)? Do refugees, remaining in Sweden, with entrepreneurial
inclination, differ from other immigrants in their ability to identify entrepreneurial opportunities and if
so in which ways?
We met results well fit to the research question, but not with differences between the two main groups,
as originally thought, but rather with similarities within the general entrepreneurial theories. These
patterns were registered not only on the micro level but also on the macro level of Kloosterman’s
(2010) model. In other words, we observed that immigrant entrepreneurs of our study, working with
their means (supply) to define opportunities in the surrounding (demand), regardless of their
immigration status. There was a slight overrepresentation of the respondents entering Sweden with
low education, building their first business within the vacancy chain window. This vacancy chain store
opening is the one market, which Kloosterman in one way, uses as a warning for creating a locked in
effect.
Kloosterman´s work relates opportunities, resources and outcomes of immigrant entrepreneurship in a
systematic way (Kloosterman, 2010). But on one point relating to the vacancy store, our finding
questions the so called locked in effect within the vacancy chain window. Within our study, we had
respondents entering the vacancy chain store, but with their skills, network and entrepreneurial
experience they all found a way out of this window, preventing them from the locked in effect. Our
interpretation is that the entrepreneurial ability and skills along with the ability to identify
opportunities and to act upon the changing environment, is the outcome that differs the entrepreneur
from a self-employed non-entrepreneur businessman. We therefor argue that Kloosterman´s model has
20
not really fitted the general entrepreneurial theory within his work, meaning his measurement to
identify paths for entrepreneurial firms vs. other self-employed businesses have been combined as one
group of respondents. By applying further entrepreneurial definitions and models of entrepreneurial
methods (Sarasvathy et al., 2011) Kloosterman´s model could be understood, when it comes to the
locked in effects. In the future we therefor argue for developing a clear cut between general selfemployment and entrepreneurs when researching on immigrant entrepreneurs. As far as refugees are
concerned, we think it´s reasonable to conclude that with the entrepreneurial skills, time will heal
individuals even if they differ upon entry to their new country. These findings were altogether
discussed among the authors, and should leave a valid qualitative study. The selection of respondents
was also well fitted to the Kloosterman´s model which further increases the validity of the study.
Finally we had to deal with changing markets over time as the respondents came into the Swedish
market during different times, but with our conclusions we argue that those effects does not interfere
with our findings.
21
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