Ethnic entrepreneurial business cluster development: Chinatowns in Melbourne
| Date | 18 January 2011 |
| Pages | 42-60 |
| DOI | https://doi.org/10.1108/15587891111100796 |
| Published date | 18 January 2011 |
| Author | Christopher Selvarajah,Eryadi K. Masli |
| Subject Matter | Strategy |
Ethnic entrepreneurial business cluster
development: Chinatowns in Melbourne
Christopher Selvarajah and Eryadi K. Masli
Abstract
Purpose – This paper aims to review the concept of clustering and to examine both mature and newly
evolved natural ethnic entrepreneurial business clusters in Melbourne, Australia.
Design/methodology/approach – Phenomenological methodology was employed in this research.
This qualitative research technique examines life experiences in an effort to understand and give them
meaning. This method is seen to be appropriate as the study is investigative and explores the historical
development, maintenance and growth of ethnic entrepreneurship clusters.
Findings – Box Hill has evolved into a second Chinatown in Melbourne through natural ethnic
entrepreneurial business cluster. The key features of these entrepreneurs are high educational and
professional competence; focus on hard work and persistence; independence and sense of freedomas
the key driving force; maintaining cultural linkage with countries of origin; almost no assistance from
government agencies; succession or exit is not a major issue; and strong belief in providing employment
and making a contribution to society.
Practical implications – The ethnic Chinese entrepreneurs in Box Hill as well as in CBD Melbourne’s
Chinatown and the Chinese community at large realize that they needed to be socially participative and
politically active. Through active participation in local politics, the ethnic community membersare able to
improve and provide more services and facilities to the community. As a result, the cluster becomes
bigger and serves better the social needs of the community members, ethnic as well as non-ethnic
group members.
Originality/value – There is a paucity of literature on ethnic entrepreneurial business clusters that seem
to be a growing feature of many cities such as Melbourne, Sydney, Vancouver, Los Angeles and other
cities in the western hemisphere. This paper investigates this phenomenon in Melbourne.
Keywords Australia, Ethnic groups, Immigrants, Entrepreneurialism
Paper type Research paper
Introduction
There is a paucity of research on immigrant entrepreneurship studies in Australia. The influx
of Chinese immigrants in recent years has, however, stimulated interest in academic
research in this field and researchers such as Collins (2002) and Tung and Chung (2009)
have studied the entrepreneurial behaviour of the Chinese diaspora in Australia. To add to
this, there have also been an increasing number of doctoral researches in this field (for
example see Lee (2009) and Low (2003)). The contributing reasons for furthering this area of
research in entrepreneurship are mainly two. Firstly, immigrants are seen as an important
source of social capital and have contributed immensely to the economic growth of the
country (Chen and Chen, 1998; Tung and Chung, 2009; Zhao and Hsu, 2007). Second,
through their networks, the immigrants have provided the economic ‘‘bridge’’ between the
country they have settled in and their home nation (Tung and Chung, 2009). The Chinese
diaspora has also networked with other countries with sizeable ethnic Chinese population
(Collins, 2002; Gao, 2003; Rauch and Trindade, 2002).
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JOURNAL OF ASIA BUSINESS STUDIES
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VOL. 5 NO. 1 2011, pp. 42-60, QEmerald Group Publishing Limited, ISSN 1558-7894 DOI 10.1108/15587891111100796
Christopher Selvarajah and
Eryadi K. Masli are both
based at the Swinburne
University of Technology,
Hawthorn, Australia.
This paper explores entrepreneurship behaviour in two Chinatown precincts; the Little Burke
Street Chinatown in the City of Melbourne and Box Hill Chinatown located 14 kilometres from
the Melbourne City Centre. These two localities are the prominent and well-known
Chinatowns in Melbourne.
The Little Burke Street Chinatown in the City of Melbourne is as old as the city itself. Early
history suggests that the Chinatown is a legacy of the gold rush days of the mid-1880s. Little
Bourke Street was the meeting place for Chinese travellers who were bound to China having
spent time on the gold fields of Ballarat and newly arrived Chinese to Australia from China. In
the early days, the Little Bourke Street Chinatown was seen as a ghetto with a negative
connotation. The Chinese, at this time of their history in Australia, were seen as undesirables,
and to the Chinese, ‘‘clustering’’ in a single area was seen as providing security.
The Box Hill Chinatown is a new phenomenon. Prior to 1980, Box Hill was the home of
immigrants from Europe, especially from Germany, Italy and Greece. Since the 1980s,
waves of Vietnamese, Cambodians, and in recent years, Hong Kong Chinese, Taiwanese
and mainland Chinese have moved to Box Hill creating the Chinatown we have today. There
is very little written on the recent history of the Box Hill area. In this paper, we hope to provide
background to the Box Hill development as Melbourne’s second Chinatown which may
throw some light on its history.
In exploring the Chinatown phenomenon, we start with the premise that certain groups of
immigrant and ethnic minorities are more entrepreneurial and more likely than others to
adopt small business ownership as an effective strategy in their quest for socioeconomic
mobility (Glazer and Moynihan, 1963; Zhou, 2004). At the societal level, racial exclusion and
discrimination erect structural barriers to prevent immigrants from competing with the local
population on an equal basis in the mainstream economy (Zhou, 2004). The Commonwealth
Immigration Restriction Act of 1901 (similar to the Chinese Exclusion Act of 1882 in the USA)
marginalised the Chinese from the mainstream economy and pushed Chinese immigrants
into their own enclave, developing ethnic economies, such as restaurant and laundry
businesses, for subsistence and self-protection (Low, 2003; Wong, 1988).
More recent empirical research suggests that immigrants seek self-employment in greater
proportion than do natives because of discrimination in the larger labour market (Mata and
Pendakur, 1999). Immigrants are labelled as not having ‘‘relevant work experience’’ poor
English and poor social skills. These stigmas relate to depreciated human capital, forces
immigrants to seek self-employment. With the growth in ethnic populations, Aldrich and
Waldinger (1990) argued that demands for ethnic consumer products in the community led
to changing tastes of non-ethnics and also allowed certain ethnic group members to carve
niches for self-employment in underserved business fields where non-ethnics also
participated. In this sense, the size of the ethnic population as well as the access to
customers beyond the ethnic community supports the ethnic enclave growth phenomenon.
With greater mobility and an increasing role of ethnic entrepreneurs in economic
development, researchers such as Portes (2001), Rauch and Trindade (2002),
Saxenian(2002) and Zhou (2004) emphasise the importance of transnational
entrepreneurship and the synergy of entrepreneurship in community building. The ethnic
entrepreneur is seen as an international operator whose market is beyond the Chinatown
enclave. They are seen to provide a very important link to the international economy with
sustainable resource flows which are both of economic and social value to the host and
home countries.
In the first part of this paper, we briefly trace the history of Chinese immigrants in Australia,
and define the ethnic entrepreneurship and theoretical foundations of ethnic
entrepreneurship cluster studies. The second part covers the empirical part of the
research and will report on the development, maintenance and growth of Chinatowns in
Melbourne using the case study methodology. And the last section provides discussion and
model configuration.
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