Ethnic entrepreneurship Coursework Example | Topics and Well Written Essays - 2000 words

Ethnic entrepreneurship - Coursework Example Other important factors are the number of immigrants in a country, the rate of growth of that ethnic population (because ethnic entrepreneurs tend to serve their niche markets first) and the general age level of that ethnic population (Audretsch, 2002:133). And because of the tendency to provide goods and services to their own ethnic group, a result is super-saturation of that business type in specific industries with the resultant high rates of failure of providing products or services in a small market that is unsustainable for a normal business size. This paper attempts to look deeper beyond language and cultural barriers as factors to explain why it is difficult to make an over-arching set of policies. A successful formulation of this set of policies could be used as guide to future policy formulation that will improve their chances of success. Entrepreneurship plays a decisive role in job creation, economic growth and international competitiveness but the lack of an over-arching set of policies makes it very difficult to have a grand plan that will work in all situations. In other words, there are also the cultural traditions and practices which might make ethnic people unsuitable as entrepreneurs. Discussion Besides language problems, another barrier to a successful ethnic entrepreneurship is the way how these new immigrants gather business information. For the native businessmen, information gathering is done through formal channels such as business associations. But for ethnic entrepreneurs, their sources of information for new business opportunities often is very limited, sometimes to only within their immediate circle of families and close friends. There is also the lingering issue of trustworthiness when it comes to granting of credit. Moreover, an additional burden is the suspicion of disloyalty when an ethnic group is not very business- minded or inclined towards individual achievement but rather promotes social unity. Many of the budding entrepren eurs have to wrestle for acceptance by their wider community in order for them to be allowed to venture on their own (Stiles & Galbraith, 2003:131). Cultural factors can work against certain ethnic groups becoming successful in their entrepreneurial ventures. For some groups, cultural attitudes towards work and money may be contributory factors to the high rates of failure. Factors include ethnic social networks that provide the necessary resources for a business start-up within the immigrant enclave. The research literature on this aspect is however not very encouraging. Immigrant networks can be described as strong ties but the very strength of these ties seems to work against the ethnic entrepreneur. In other words, the second type of social networking which is the weak type is a more accurate predictor of ethnic success in business (Sequeira & Rasheed, 2003:77). Why this is so can be partly explained by the fact that strong social ties are needed in the first stages of a venture but may later on be a hindrance when the business starts to give expansion a try outside of its immediate immigrant enclave. Unless that enclave has very big population, the ethnic entrepreneur must by necessity expand beyond his own ethnic groups. Focusing on his ethnic group is not beneficial in the longer term and is counterproductive. Latent Racism –