The Immigrant Contribution of Female Entrepeneurs on British Economy

Abstract

This research is an attempt to document the rising trend of immigrant female entrepreneurship and its economic and social impact in the United Kingdom (UK). There are different challenges that immigrant businesswomen face on a day-to-day basis, such as lack of funding, mentorship and support from third parties, including local and international financial institutions. Despite this, immigrant women entrepreneurs have made a considerable impact not only in their communities, but also on a larger scale, contributing into the economy of the UK. This paper provides a theoretical background of immigrant entrepreneurship among women and describes the positive social and economic impact that female entrepreneurs bring in their everyday activity. Immigrant entrepreneurs are an important research topic from a number of perspectives, through which the economic and social impacts of female immigrant entrepreneurship on British economy may be measured and analyzed. The paper presents a detailed research plan and a hypothesis regarding the role of female immigrant entrepreneurship in the British economy. Further, concerns about the research methods and the perspectives of coherently presenting quantitative results of the study are raised. A conclusion finally takes into account all of these considerations and presents recommendations for further work.

Literature Review

The topic of immigrant entrepreneurship has over the past few decades generated significant interest in the socioeconomic research community. The first studies on this subject were conducted in the US in the 1970’s and somewhat later in the UK, followed by Australia and Europe. Together, these works have created an Female immigrant entrepreneurship and its economic and social impact on British economy impressive body of literature consisting of more than 1,700 books, reports, monographs, chapters, journal articles and special issues on aspects of immigrant entrepreneurship (Kloosterman R & Rath J, 2003). This trend has continued to this day with significant focus being placed on the role of female entrepreneurship.

Halkias (2011) reports that the growth and sustainability of female immigrant entrepreneurship are key economic and social factors calling for immediate scholarly study and analysis. Some studies have specifically outlined the importance of immigrant entrepreneurship in the UK. For example, Daly (1991) wrote that self-employment among minorities grew by around 95% over the 1980s, compared to 52% for whites. According to Clark and Drinkwater (2008), ethnic entrepreneurship matters for welfare: self employment maybe a positive choice made by individuals from minority groups: it can exploit particular talents or motivations and maybe rewarding both financially and in terms of life and job satisfaction.

A report by the UK Equal Opportunities commission (2006) found that women's entrepreneurial aspirations varied between different ethnic groups. Specifically, 11% of white women wanted to be their own boss compared to 17% of Black Caribbean and 20% of Pakistani and Bangladeshi females. This suggests that immigrant women were actually more driven to succeed and run their business compared to the British women who were born and raised in the UK. In previous studies of female immigrant entrepreneurship in the UK, Clark and Drinkwater (1998, 2000) and Fairlie et al., (2007) pointed out Indians, Pakistanis and Bangladeshis as the largest groups of immigrant entrepreneurs.

Case Study and Background

The general purpose of this research is to analyze the current state of female immigrant entrepreneurship in the UK and its economic and social impact on British economy on the basis of economic and other data, observations, interviews and comparison of female immigrant businesses. The particular area of interest within this paper lies in the investigation of cases where immigrant women left their careers as employees, including well-paid jobs in finance, marketing or technology, and set up their own businesses in such fields, as fashion, beauty, food and art industries without any previous professional background.

By regional origin, the specific female immigrant entrepreneur groups studied in this research will include: 

1. Americans, Latin Americans and Canadians;
2. Western Europeans;
3. Eastern Europeans;
4. Africans;
5. Far-East Asians (Japanese and Koreans).

The research will examine the current situation of female immigrant entrepreneur groups (mentioned above) in the UK and assess the challenges they face when setting up and running start-ups, including financial issues and funding, regulations and policy, government help, social media, networking and mentoring. It is also of interest to compare these groups to their counterparts, born and raised in Great Britain, uncovering data on their respective performances in running businesses. For the empirical research with female immigrant entrepreneurs around 20 businesses will be selected, to assess more fully practices and policies, websites, relationship with customers and third parties like banks, media and government.

According to Halkias (2011), the success or failure of female immigrant entrepreneurship will increasingly drive the success or failure of economies in local communities of developing countries and the national economies of developed countries such as the United Kingdom and the United States. So I would like to assess and examine the entrepreneurial activity of educated female who are the high achievers and who made a choice to become an entrepreneur not because of the lack of jobs or discrimination on salary level or family issues, but because of their own decision and passion to start a business. However, immigrant businesswomen face many obstacles and problems like limited funding (limited loans/ investment) and limited or no government support for female immigrant start-ups. Also, there is an issue with visa requirements and investment that business person should bring in the UK in order to be able to be qualified for the business type of visa (Tier 1. Investor). At the same time, the lack of ‘right’ business connections and networking may contribute to eventual demise or hinder striving entrepreneurs from going forward. As such, there is a variety of obstacles in running a female enterprise, which may lead to a failure of female immigrant enterprises. There is also a category of those who juggle family and business or do not have an opportunity to socialize: eventually, such entrepreneurs tend to spend most of the time on their own when building their business, without the support of the community or other entrepreneurs.

It is envisaged, that the study will include a practical research element to investigate questions raised in the study, primarily targeting selected female immigrant businesses.

Research Questions and Objectives

The research questions will be refined after the literature review and more precise female immigrant entrepreneurship study, from the following:

1. Why more western educated immigrant women (high flyers) in the UK leave careers in finance/ marketing / technology and start businesses in fields in which they have no professional experience or connection?
2. What are the challenges that immigrant businesswomen face in the first year of starting a business?
3. What does it take to become a successful female immigrant entrepreneur in the UK? Case studies (personal stories of success).

The objectives of this research paper are comprised of:

• identifying female immigrant groups who tend to switch careers and start their own business. The latter range from self-employed sole traders with no employees to those employing a relatively large and well-organised workforce (Fuller-Love N et al, 2006);
• identifying business areas where women tend to start their businesses;
• building a typical portrait, if such exists, of females (age, academic background, professional experience, origin) who start their businesses (through interviews and case studies);
• identifying economic, geographical and demographical characteristics of the regions where female start-ups tend to appear;
• identifying sources of statistical and other data;
• investigating sources of funding of female entrepreneurs by conducting interviews with banks, venture capitalist, government organizations, private investors;
• evaluating the economical effect on local communities by female immigrant businesses;
• evaluating the social effect on local communities by female immigrant businesses;
• study and analysis of statistical data of failed businesses run by women;
• demonstrating results in the form of graphical diagrams, tables and case studies;
• defining the economic and social benefits from female immigrant entrepreneurship in the UK.

Hypothesis

This study is designed to assess the hypothesis that immigrant businesswomen make significant positive contribution to the British economy. All formulated problems will be divided into several research stages. The role of female immigrant entrepreneurship in recent years has been on a rise, despite the uncertainties concerning Brexit and strict visa regulations. Thorough investigation on these issues and the impact on economy are needed. Would these immigrant businesswomen actually succeed in the UK, if they stayed at their secure jobs and earned enough for a living? But would the level of success, and more importantly, general life satisfaction, in this case be higher or lower than after they started their own businesses? Behind each female entrepreneur, there is always a story, an ambition, or something (or somebody) that pushed them to change direction and start a business. It may be important to identify and classify the reasons for starting a business as various motivations to succeed. Some may spot an opportunity, some are motivated by wanting to make money or having flexible working hours, others may want to employ family members or feel, that they have no other options (Fuller-Love N. et al, 2006).

Research and Data Collection

This research paper will be analytical. Use of questionnaires based on a standard format (e.g. Likert scale model) to obtain mainly qualitative responses from users, complemented by interviews and focus groups. Also qualitative method will be used to collect biographical data of female immigrant entrepreneurs. Demographic factors (age, educational experience, gender, home support) also need to be considered and compared.

Analysis of literature is required to study the outcomes of similar research in the past, the depth of study and determination of problem-solving questions on female immigrant entrepreneurship. Statistical and mathematical methods will be used to characterize data about the size and trends of female entrepreneurship and revenue earned.

Comparative method will be applied for analysis of different areas of female businesses. Comparative research on the state of incorporation of female immigrant groups in the global marketplace is an essential next step, and an especially important one for international research protocols since many of the immigrant entrepreneurship studies remain focused almost exclusively on the American context (Halkias D, 2011). Methods of oral history, ethnography, narrative, and autobiography are relaying how individuals give meanings to their life experiences.

During the fieldwork the biographical method will be applied by collecting data on female immigrant entrepreneurs. Visual method will be applied for direct study and description of modern conditions of female immigrant businesses through products in their shops or other physical premises, on their websites, trunk shows, pop-up shops, events and trade shows. Also the following method will be used: interviewing of specialists on the given area of study to help to reveal the problem questions. Finally, the historical method will be applied, i.e. working with archives on the subject of female entrepreneurship.

For this research a variety of data sources and data types is required. For example, those will include written sources on the topic, publications devoted to female immigrant entrepreneurship, made by British and international researchers, statistical data on female immigrant entrepreneurship, trends and enterprise case studies, as well as historical data on female immigrant entrepreneurship (archive data). It is necessary to show the data on the growth of female immigrant businesses and determination of dynamics in recent years. Also, the data on investments and funding of female immigrant enterprises in recent years will be relevant in this context. Finally, the data on successful female immigrant entrepreneurs making positive economic and social impact (e.g. hiring local labor/ interns) on local communities will be collected.

Concerns

Concerns about the validity of results of this research are expected to relate to methods applied in data collection and analysis. As the research will be to a significant extent based on case studies, and as each case study is unique, it may be difficult to produce any statistically relevant outcomes. Also, identifying parameters and metrics used for reasonable comparisons may prove to be non-trivial. Eventually, all of these issues may result in difficulties in presenting quantitative results of the study, which are coherent with the main hypothesis.

Conclusion

In this research paper, immigrant female entrepreneurship is argued to generate a considerable positive output on the UK economy. The paper aims at identifying and quantifying this output with specific focus placed on immigrant women leaving careers as employees to start own businesses in novel market areas, including fashion, beauty, food and art industries without preliminary professional experience. Further, building on the hypothesis raised herein, research aims, objectives and methodologies are specified. Finally, concerns regarding validity of research approaches and their coherence with the hypothesis are expressed.

Nevertheless, it is hoped that the research will provide a useful outlook towards the problems faced and support required by female immigrant in the UK with the view of building an efficient policy and stirring initiatives benefitting both entrepreneurs, as well as other relevant stakeholders.

Bibliography

1. Clark K., Drinkwater S. (1998). Ethnicity and self-employment in Britain. Oxford Bulletin of economics and Statistics, Vol. 60, pp. 383-407.
2. Clark K., Drinkwater S. (2000). Pushed out or pulled in? Self-employment among ethnic minorities in England and Wales. Labour Economics, Vol. 7, pp. 603-28.
3. Clark K., Drinkwater S. (2010). Patterns of ethnic self-employment in time and space: evidence from British Census microdata. Small Business Economics, Vol. 34, pp. 323-338.
4. Daly M. (1991). The 1980s – a decade of growth in enterprise. Employment Gazette, Vol. 99, pp. 109-134.
5. Fuller-Love N., Lim L., Akehurst G. (2006). Guest editorial: Female and ethnic minority entrepreneurship. The International Entrepreneurship and Management Journal, Vol. 2, pp. 429-439.
6. Halkias D. (2011). Female Immigrant Entrepreneurs. The Economic and Social Impact of a Global Phenomenon. Gower Publishing Ltd.
7. Kloosterman R., Rath J. (2003). Immigrant entrepreneurs. Venturing abroad in the age of globalization. Berg, Oxford, New York