Entrepreneurial Motivations and Capabilities of Migrant Entrepreneurs in Australia
| Date | 01 August 2018 |
| Author | Nthati Rametse,Pia Arenius,Topoyame Moremong‐Nganunu,Ming Juan Ding |
| DOI | http://doi.org/10.1111/imig.12452 |
| Published date | 01 August 2018 |
Entrepreneurial Motivations and Capabilities
of Migrant Entrepreneurs in Australia
Nthati Rametse*, Topoyame Moremong-Nganunu**, Ming Juan Ding*** and
Pia Arenius*
ABSTRACT
This article presents findings on immigrant entrepreneurship in Australia. The relationship
between the entrepreneurial start-up motivation, co-ethnic preferences and entrepreneurial capa-
bilities of established immigrant businesses are explored. We analyse data collected with a
self-administered survey questionnaire from 157 immigrant entrepreneurs in Melbourne’s sub-
urbs. Our findings show that immigrant entrepreneurs who report a high level of individual
achievement as their start-up motivation also report high levels of entrepreneurial capabilities
in terms of opportunity recognition,managerial innovativeness and proactiveness. Immigrant
entrepreneurs who are highly influenced by co-ethnic preferences on staff employment and cus-
tomer targeting report higher opportunity recognition than those who have a co-ethnic prefer-
ence on suppliers. We provide important insights and explanations for these findings and their
implications for Australian immigrant entrepreneurs and policymakers.
INTRODUCTION
Migrants are a source of new opportunities for economies since they generate income, output and
address structural unemployment problems (Desiderio and Salt, 2010). Migrants are more likely
than natives to start new enterprises (Desiderio and Salt, 2010; Mestres, 2010). Flap et al. (2000)
related the attention on immigrant entrepreneurship to their better performance in the labour market.
Given their human capital, self-employment provides them with better income than being employ-
ees and with better planning and support, through which they can provide a larger economic boost
in the future (Fatoki and Patswawairi, 2012). As most immigrant entrepreneurs are involved in
low-level entrepreneurial activities (Rath, 2000), they tend to be small and unlikely to grow due to
barriers to entry (Desiderio, 2014).
Immigrant entrepreneurs tend to engage in entrepreneurial activities out of necessity (Aliaga-Isla
and Rialp, 2013). Although some immigrant small businesses are established by people who
entered Australia under business migration schemes, there seems to be a compelling argument that
many others are established as a matter of necessity due to barriers such as the lack of fluency in
English and discrimination in workplaces that leads to highly educated individuals doing low-skill
work, as reported among African migrants in Australia (Inquiry into Migration and Multiculturalism
in Australia, n.d.). Mahuteau et al. (2014) found that between the two cohorts of migrants, those
who entered under more stringent conditions had a higher probability of becoming self-employed.
* RMIT University, Melbourne
** Sultan Qaboos University, Muscat
*** Monash University, Victoria
doi: 10.1111/imig.12452
©2018 The Authors
International Migration ©2018 IOM
International Migration Vol. 56 (4) 2018
ISSN 0020-7985Published by John Wiley & Sons Ltd.
Immigrants of certain ethnic backgrounds had been marginalized and faced discrimination in Aus-
tralian society. Racism and discrimination in the labour market has pushed many members of eth-
nic communities towards establishing their own businesses for self-employment (Kloosterman,
2010; Mavrommatis, 2015). Overall, it seems convincing to say that immigrant entrepreneurs tend
to engage in entrepreneurial activities by necessity.
Numerous immigrants, by making use of their own capital and favourable economic condi-
tions, successfully start ventures (Kloosterman and Rath, 2001; Rath, 2000). When immigrants
come from higher economic classes, their better access to financial assistance through their
strong family ties increases their likelihood of entrepreneurial activity and success (Zhou, 2004).
Additionally, some immigrant entrepreneurs settled in Australia with enough capital and
resources to start their enterprises and hence do not experience significant hardship. A majority
of immigrant entrepreneurs, particularly those born in Asia, have a higher rate of involvement in
international trade than non-immigrant entrepreneurs (Collins, 2003). There may also be particu-
lar opportunities for entrepreneurial activity among the immigrants. The size of the foreign-born
population in the host country appears to open entrepreneurial opportunities for ethnic business
owners since they understand the product preferences and the language of their fellow con-
sumers (Mora and D
avila, 2005). Therefore, this research investigates co-ethnic preferences ema-
nating from social networks.
We propose studying the following research question. What is the relationship between the rea-
sons to engage in entrepreneurial activity and the subsequent entrepreneurial capabilities that Aus-
tralian immigrant entrepreneurs exhibit? This study focuses on the “pull”and “push”factors
(Masurel et al., 2002). The “push”factors are primarily “elements of necessity”(Orhan and
Scott, 2001), whereas the “pull”factors focus on opportunity, autonomy, monetary and non-
monetary rewards. Once the immigrants have established their enterprises, entrepreneurial capabil-
ities play a significant role in sustaining the business. Zhang et al. (2009) conceptualized entre-
preneurial capabilities as the firm’s ability to leverage resources through a combination of
innovative, proactive, and risk-seeking activities to discover, enact, evaluate, and exploit business
opportunities. Karra et al. (2008) viewed entrepreneurial capabilities as the ability to identify and
acquire the necessary resources to act upon opportunities identified in the market or to create
new market opportunities.
Building on the literature, we examine the ability to perceive opportunities, the ability to innovate
and proactive entrepreneurial capabilities as antecedents to sustainable entrepreneurship and viable
new businesses. Opportunity recognition was identified by Aliaga-Isla and Rialp (2013), and the
characteristics of immigrants were analysed as determinants of self-employment and/or business
creation. Aliaga-Isla and Rialp (2013) further suggested the introduction of entrepreneurship as a
process into the immigrant entrepreneurship research. Opportunity recognition is regarded as con-
tinuous with the life cycle of the venture; hence, it does not exist prior to or after the business’s
formation (Singh et al., 1999). Our study incorporates this argument, as the objective of this
research was to explore the Australian immigrants’motivations for entrepreneurship and further
investigate the extent to which they recognise opportunities. We are not aware of any research on
immigrant entrepreneurship that has linked entrepreneurial motivations to opportunity recognition.
Our inspiration for the immigrant entrepreneurship research is as follows. The influx of many for-
eign migrants is fraught with serious social tensions caused by a wide variety of negative socio-cul-
tural and economic externalities (Nijkamp et al., 2010). Likewise, there is a tendency to see
migrants more as a source of problems than as a basis of new opportunities for the urban economy
(Nijkamp et al., 2010). Thus, to address these problems, the study provides an opportunity to
advance our knowledge of immigrant entrepreneurship, in particular the entrepreneurial effects of
this growing diversity. Globally, immigrant entrepreneurs represent a minority of the population of
entrepreneurs, and policymakers need to be sensitized to the conditions confronting these
entrepreneurs.
218 Rametse, Moremong-Nganunu, Ding, and Arenius
©2018 The Authors. International Migration ©2018 IOM
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