Diversity and migrant enterprise: beyond the economic dividend

Abstract: http://journals.sagepub.com/doi/full/10.1177/0042098018765382#abstract

At the time of writing, debates about the outcomes of the recent ‘Brexit’ referendum highlight Britain’s uneasy position in relation to who gets what out of international migration. Locating this in historical context, we see that grass roots public opinion has rarely perceived any advantage to be gained from foreigners, which diverges from scholarly work highlighting the near consensus about the positive gains of migration. When assessing the benefits of migrant firms and workers on local economies, much of the discourse has been also positioned between these binaries of contribution and burden. 

Our paper in Urban Studies develops a more nuanced approach to economic development by looking at the myriad economic and social contributions of migrant entrpreneurs. We do so by furthering the dialogue between the two related fields of migrant entrepreneurship and diversity economics. Whilst the former has highlighted the structural constraints that ensure that no more than a small fraction of migrant business owners can attain high entrepreneurial performance, diversity economists have tended to lay more stress on the gains accruing to reception economies from the performance of high human capital migrants. 

Drawing on interviews with 49 new migrant business owners and 60 workers in the West Midlands, our article argues that benefits of diversity should be explored beyond the economic dividend. Our key contention is that, in the face of formidable obstacles, migrant entrepreneurship makes no small contribution to its adopted locality, particularly when looking at non-pecuniary contribution.  We highlight the reality of a two-tiered migrant entrepreneurial population in Britain, where the small timers of the lower (and more representative) level tend to attract less academic coverage than they deserve. Even so, despite their low profile the economic and social contribution of these unsung migrant firms is far from negligible and data from our interviews of new migrant firms in the West Midlands show that even the most marginal business owners contribute in the following ways: (i) migrant entrepreneurs create employment for their locality, (ii) cater to community needs and (iii) cushion the social incorporation of new communities into British society. Therefore, we argue that debates around the benefits of diversity should incorporate not only economic growth, but also its impact on social processes. Central to these social processes are the role of local customers and changes in the urban landscape- the impact of processes of gentrification in the retail sector as well as the role of (migrant) small firms in the revitalisation of British cities merit further research.

Read the paper on Urban Studies - OnlineFirst here.