New businesses, goods and services

5.3 New businesses, goods and services

Migrants have made major contributions to the Australian economy, not least through setting up businesses (Strahan and Williams 1988). Some of the giants of Australian business arrived as ‘penniless’ migrants. In fact, migrants are over-represented on the BRW ‘rich list’. In 2003, to be listed among the ten wealthiest individuals in Australia required assets valued at $1,000 million or more. As Stilwell (2004:para 15) pointed out, “the incidence of wealthy people from migrant – mainly European – backgrounds [was notable]. 4 out of the 10 richest Australians in 1993 were migrants, and 5 out of the 10 in 2003”. Clearly, being a migrant is not synonymous with having a poor background and it seems that inheritance and family connections are equally relevant to

‘success’ among migrants as among the Australia-born.

Migrants as small business operators and entrepreneurs

Unfortunately, little is known about the more general and low-key penetration of migrant groups into the Australian economy. An indicator of the social impact of migrants in the retail sector could potentially be gained by looking at their involvement in shop ownership and management, particularly in suburban and non-metropolitan areas, but research into this phenomenon is patchy. This is disappointing because corner stores and other convenience goods outlets, where migrant owners are perceived as being of continued prominence, are pivotal in local communities. They are foci for social interaction, not least because of their lengthy trading hours. Involvement in this form of retailing is therefore a way in which migrants contribute to social networking as well as to business.

It is perhaps not surprising that many pre-war migrants were highly motivated and became successful entrepreneurs. Many were also responsible for chain migration and for providing supportive roles to arriving family members and contacts (Burnley 1985; Collins et al. 1995). There is no doubting the penetration and diversity of migrants in the small business sector of Australia when 30 per cent (or 500 900) of the nation’s small businesses are owned or operated by people who were born overseas (ABS 2005a). Since people born overseas make up about a quarter of the Australian population, it seems that there are more migrant small business operators than one would expect on the basis of population alone.

Another explanation for the continued propensity of immigrants to establish businesses is the existing business migration schemes under which persons

with business skills and capital are allowed to settle (Wooden 1994). Moreover, new migrant arrivals often possess the skills and qualifications to break into higher level jobs and the professional strata of immigrant businesses (Collins et al. 1995).

Many migrant businesses have been shaped by the cultural needs, activities and support of fellow migrants who remain very important to their economic survival. In spite of this, migrant-owned businesses do not represent an alternative to the open economy. They do not operate within enclaves – in the sense that they solely serve the ethnic group of the business owner – unlike in some other countries (for example, the Cuban enclave in Miami in the US) (Collins et al. 1995; Tait et al. 1989).

Other incentives to self-employment include higher levels of social status, personal gratification and improved financial wellbeing by comparison with factory work or the receipt of welfare benefits (Tait et al. 1989). In this regard, it should be noted that, in Australia, immigrants have not received government funding assistance to establish businesses (Zhou and Logan 1989).

It is important to understand that other factors can transform small business from a preferred option to a necessary one for many migrants wanting to work. Opportunities for employment in mainstream labour markets are sometimes blocked, perhaps due to lack of skills, poor fluency in English, or the effects of economic restructuring including retrenchment and the elimination of traditional sites of unskilled employment (Castles 1991; Collins et al. 1995; Covick 1984). If new migrant groups continue to be disadvantaged in the labour market for structural reasons, including ‘institutional racism’ (Jarasuriya and Kee 1999), their dependence upon the ‘informal economy’ for survival could increase and enclave industries might form (Collins et al. 1995).

It is also relevant to note different attitudes to work on the part of some migrants. Some migrant groups, for example, aspire to values highly compatible with a strong entrepreneurial spirit, such as loyalty, work ethic, orderliness, responsibility and respect for authority (Jarasuriya and Kee 1999).

Important differences also need to be recognised with respect to the integration of work and home. Home industries such as cooking, clothing manufacture, jewellery making and motor vehicle repair can be looked upon as empowering and as an avenue for incubating new businesses (Watson and McGillivray 1994).

Other important elements for success

In Australia, most enterprises operated by immigrants are family-run businesses (Adrukari 1999). Family members are often important for their successful operation in part because they are prepared to work long hours and have restricted holidays (Castles 1991; Collins 2002; Tait et al. 1989). Furthermore, housework and care of family – of children and elderly relatives

– can be managed conjointly with work in the family business. So, in addition to entrepreneurial flair, other important elements for the successful operation of businesses by immigrants include family support, ethnic group links, patriarchal family structures and religion. On balance, then, the bulk of migrants to Australia contribute substantially to the productive diversity of the nation’s financial capital.

Summary of benefits and costs

Migrants have made substantial contributions to the productive diversity of Australia especially through the establishment of businesses. Interpretations of social costs and benefits of immigration to Australia with respect to new businesses, goods and services and with reference to the literature are summarised in Table 5.3.