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Ethnic entrepreneurs, ethnic precincts and tourism: The case of Sydney, Australia Essay

Australia, one of the most cosmopolitan of contemporary western societies, has a long history of immigrant entrepreneurship, with many ethnic groups significantly over-represented in entrepreneurial activities, particularly in the small business sector of the Australian economy. Immigrant enterprises, mainly small businesses, generate significant economic growth, employment opportunities and import export activity across a broad range of industries in Australia. The experiences of immigrant entrepreneurs in Australia vary considerably, with diversity in pathways to immigrant entrepreneurship in Australia evident for both male and female immigrant entrepreneurs. This means that `one size will not fit all, pointing to the need for a diverse, complex policy response to immigrant entrepreneurship in Australia today.

In Australia, immigrants have a slightly higher rate of entrepreneurship (18.8%) than non immigrants (16.3%). However, some immigrant groups, such as the Koreans, have much higher rates of entrepreneurship compared to non-immigrants and other immigrant groups. In order to understand the dynamics of immigrant entrepreneurship (Waldinger et al., 2010), stressed the importance of understanding the interaction between the group characteristics of immigrant communities and the opportunity structure in their host country when they settled.

This in turn helps explain the rates of entrepreneurship and the characteristics of immigrant enterprises. Light and Rosenstein (2009) developed the concept of group characteristics in more detail. Immigrants draw on ethnic resources, they argued, which include ‘ethnic ideologies, industrial paternalism, solidarity, social networks, ethnic institutions and social capital’. Immigrants also have access to class and other resources that they bring to entrepreneurship and to the ‘ethnic economy’ (Light and Gold 2010). Immigrant entrepreneurship continued to be a feature in Australia in the post-1945 period as Australia embarked on a large scale immigration program that delivered nearly 7 million immigrants, with immigrants a greater proportion of the Australian population than most other western nations (OECD 2011).

The ethnic diversity of contemporary Australian society is reflected in the Australian small business sector. In Australia, as in other countries, restaurants, food and other retailing are areas of the economy with a strong immigrant presence (Collins and Low 2010). Australia is shaped by the intersection of a number of factors: ethnic resources and networks, class resources, regimes of regulation, inclusion/exclusion, opportunity, gender, radicalization and family. Collins and Low (2010) argued that while the international research rightly stressed the extent to which immigrant entrepreneurship is embedded in family relationships with immigrant women playing an important role in their husband’s businesses, it is important to recognize the many immigrant women themselves become entrepreneurs in their own right.

One key fact that emerges from the Australian research is the increasing diversity of the paths to immigrant entrepreneurship (Collins 2009). Some immigrants arrive in Australia as successful business migrants with ample start-up capital. Other immigrants arrive with high professional and educational qualifications to enable them to fill labour shortages in the corporate sector, though minority immigrants often reach an ‘accent ceiling’ that constrains their promotion opportunities. Others tread the ‘traditional’ path from low-wage jobs to entrepreneurship. Finally, some immigrants see entrepreneurship as an alternative to unemployment and take advantage of federal government programs to assist the unemployed to establish business enterprise.

The Australian research on immigrant entrepreneurship (Collins, 2009) shows that there is increasing diversity in the paths that new immigrants take to entrepreneurship: some were previously unemployed, while others were manual labourers before opening a small business. Some must attain university qualifications that are prerequisites for entering the professions (such as doctors, dentists, accountants and lawyers) and opening a private practice, others leave corporate jobs to become entrepreneurs, while still others, business migrants were already established as entrepreneurs before migrating to Australia. The Australian research also points to a diversity of class background among and between birthplace groups of immigrant entrepreneurs (Collins, 2011) and a great diversity in educational achievement.

Australian immigrant enterprises are very diverse, and so policy is required to respond to that diversity. While many immigrant enterprises produce or sell ethnic products such as food, coffee or artifacts, many others do not. Immigrant entrepreneurs are spread across the economy, with businesses in the services sector of the economy, including retail, real estate, finance, media and tourism. Others are professionals such as doctors, dentists and architects who run their own private practices.

The Federal Australian Government promotes immigrant entrepreneurship directly though it’s permanent and temporary immigration policy (Collins, 2011). Australia introduced an Entrepreneurial Migration Category in November 1976 to allow immigrant entrepreneurs with detailed business proposals and capital to enter Australia under the permanent migration programme as migrant settlers. Over the years this policy has been fine-tuned in the wake of the identification of anomalies in the programme. Evaluations of this programme suggest that it is largely successful.

Today business owners, senior executives and investors can apply for a visa under the Business Skills category. The main problem appears to be in attracting a sufficient number of entrants under this category, with Australia facing strong competition from other Western countries, including Canada. In March 2003 three Business Skills Processing Centres were opened and a two-stage process was introduced, whereby business migrants are granted a Business Skills (Provisional) visa for four years. If they establish a business or maintain their legal investment over the four-year period they become eligible to apply for a Business Skills (Residence) visa, an entrepreneurial pathway to permanent residence in Australia. A direct permanent residence category is still available for high-calibre business migrants sponsored by State and Territory governments, known as the Business Talent visa.

In addition to these immigration policy initiatives, a number of Federal Government agencies assist immigrant entrepreneurship, directly or indirectly. One Federal scheme, the New Enterprise Incentive Scheme (NEIS), was designed to assist cash-poor unemployed people in entering the setting-up phase of a business enterprise, allowing them to take advantage of business training and draw on future unemployment benefits during the period in which the business enterprise is being established.

The State governments play a key role in the regulation of enterprises in Australia, including those owned by immigrants. These regulations relate to issues such as health and safety requirements and employment conditions, including wages, impacting on immigrant and non-immigrant entrepreneurs. For example, a decision in the 1980s to permit outdoor dining in the State of New South Wales meant that al fresco eating became possible for the first time. Today many immigrant enterprises are concentrated in the food industry, with ethnic restaurants and cafes, most with outdoor tables, in evidence across metropolitan and regional Australia.

Ethnic precincts are key spatial sites though, significantly, not the only sites of the ethnic economy in the city (Collins, 2011). In central or suburban parts of the city, ethnic precincts are essentially clusters of ethnic or immigrant entrepreneurs in areas of the city that are designated as ethnic precincts by place marketers and Government officials. They are characterized by the presence of a substantial number of immigrant or ethnic entrepreneurs who populate the streets of the precinct selling food, goods or services to co-ethnics and non-co ethnics alike. Ethnic precincts come in a number of forms. Often they tend to be associated with one ethnic group, as evinced by districts.

Each of these ethnic precincts has been developed with the financial and marketing support of local government. Ethnic festivals become key moments in promoting the precinct to a broader clientele, including tourists. Promotion of ethnic festivals is a key element of any strategy to promote immigrant entrepreneurship. Policies designed to develop and promote ethnic precincts (Collins and Kunz, eds,2010), the ethnic economy and urban ethnic tourism(Rath, ed, 2010) will, in turn, help the immigrant entrepreneurs whose small businesses are located in clusters in particular. The important growth in female immigrant entrepreneurship in Australia, like other countries, also suggests a need for policies to be sensitive to matters related to intersection of ethnicity and gender. This area requires further research in Australia. Moreover, minorities face barriers in respect to language difficulties and racism and prejudice, issues that do not confront non-immigrant entrepreneurs.

References

Collins, J and Low. A. (2010)“Asian female immigrant entrepreneurs in Small and Mediumsized Businesses in Australia”, Entrepreneurship & Regional Development, Volume 22 Issue 1, January 2010, pp 97-111.

Collins, J. (2009), “Ethnic Diversity Down Under: Ethnic Precincts in Sydney”, International Journal of Diversity in Organisations, Communities and Nations, no. 4, pp. 1043-53.

Collins, J. and Kunz, P. (2010), “Ethnic entrepreneurs, ethnic precincts and tourism: The case of Sydney, Australia” in Richards, G. (ed.), Tourism Creativity and Development, London and New York: Routledge, pp. 201-14.

Collins, J. (2011), “Ethnic Diversity Down Under: Ethnic Precincts in Sydney”, International Journal of Diversity in Organisations, Communities and Nations, no. 4, pp. 1043-53.

Collins, J. and Kunz, P. (2010), “Ethnic entrepreneurs, ethnic precincts and tourism: The case of Sydney, Australia” in Richards, G. (ed.), Tourism Creativity and Development, London and New York: Routledge, pp. 201-14.

Light, I. and Rosenstein, C. (2009), Race, Ethnicity and Entrepreneurship in Urban America, Aidine de Gruyter, New York.Light, I. and Gold, S. J. (2010), Ethnic Economies, Academic Press, San Deigo.OECD (2010), Open for Business: Migrant Entrepreneurship in OECD Countries, OECD

Publishing, Paris.OECD (2011), International Migration Outlook: SOPEMI 2011, OECD Publishing.http://dx.doi.org/10.1787/migr_outlook-2011-en

Rath, J. (ed.) (2010), Tourism, Ethnic Diversity and the City, New York: Routledge. Stromback, T. and Malhotra, R. (1994), Socioeconomic Linkages of South Asian Immigrants with their Country of Origin, Canberra: Australian GovernmentPublishing Service.

Rezaei (2011) Royal delicacies at peasant prices: cross-national differences, common grounds – towards an empirically supported theory of the informal economic activities ofmigrants. World Review of Entrepreneurship, Management and Sustainable Development, 2011, vol. 7, issue 2, pages 109-154

Waldinger, R., Aldrich, H., Ward, R. and Associates (2010), Ethnic Entrepreneurs – Immigrant Business in Industrial Societies, Sage, Newbury Park, London, New Delhi.

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