The emergence and development of Asian self-employment have been
notable features of many British urban economies of the last two
decades. Existing research is characterised by a competition
between perspectives as well as the possibility of fruitfully
combining approaches which emphasise exclusionary economic
structures and those which emphasise minority cultures. Moreover,
while existing research has paid much attention to why people
enter into self-employment, differences in rates of entry into
self-employment and particularly in business success between
ethnic groups has largely been neglected. Although the research
to date cannot help us to explain comprehensively these
developments it can help provide us with some indicators of what
factors may be important.
The first major study in Britain to look at Asian business development, involving six hundred small retailers in Bradford, Leicester and the London Borough of Ealing, was carried out in 1978 (Aldrich et al 1981; McEvoy et al 1982; Aldrich et al 1984). In each area, one hundred Asian and one hundred white businesses were interviewed. Two important conclusions emerged. One concerned the motives for entry into self-employment of Asians (the `blocked upward mobility' thesis), and the other was about the prospect of the success of the economic endeavours (the 'economic dead-end' thesis).
The study found that one of the major explanations of Asian entry into self-employment was the desire to avoid racial discrimination and the resulting confinement to low status jobs in the labour market (Aldrich et al 1981: 175). The key factor used by Aldrich et al in this explanation was the existence of a relatively large number of well-qualified Asian shopkeepers compared to the more poorly-educated white shopkeepers in their sample. Specifically, Aldrich et al (1981: 177) found that 20 per cent of Asian owners in their sample were graduates compared to only three per cent of their white sample.
Two of the main researchers on the above study carried out a further study in 1990-91 which also examined the motives for Asian entry into self-employment (Jones et al 1994). This study was an interview survey of over 400 owners of small businesses comprising 178 Asian owners, 54 African Caribbean owners and 171 whites. The study was undertaken in fifteen widely spread small localities throughout England.
The researchers found that over a quarter of their Asian respondents gave `push' factors such as unemployment, underemployment, job dissatisfaction and/or blocked opportunities as their principal business entry motive (Jones et al 1994: 186). Jones et al concluded that it is racism in the wider labour market which is the primary factor in pushing some members of ethnic minorities into self-employment. Hence, their entry into self-employment is seen as a 'damage limitation' exercise to avoid unemployment (Jones et al 1994).
Further evidence to support this view is provided by Ram (1992). He examined the market and managerial settings of Asian employers in a typical inner-city area of Wolverhampton in the West Midlands. The study did not concentrate on the corner shop but rather Asian employers in clothing, engineering, professional services as well as retail. He interviewed fifty Asian employers, identified through personal contacts, influential employers sympathetic to the research aims and customers of his family's business. Ram found that the majority had entered into self- employment because 'they felt they had few alternatives'. Although he also found that following the family into business was an important factor in entering into self-employment, Ram claims entering the family business was almost always a last resort and cannot be separated from the unfavourable opportunity structure.
Another important finding to emerge from Ram's research related to some of the managerial processes that went unacknowledged, particularly with regard to the role of women family workers. At first, it seemed that men 'managed' and women 'worked'. However, after more investigation he found that family women 'often played critical de facto managerial roles in running of the business'. Men managed the external relations of the firm with customers, suppliers, banks, etc. On the other hand, the
'... concrete management of the place of work was the responsibility of women members of the family. Women's management of the internal processes of the firm often meant balancing a chaotic production system and the conflicting pressures of the shopfloor and management, as well as shouldering the bulk of the responsibilities in the domestic sphere' (Ram 1992: 615).
Aldrich et al also sought to explore whether Asians as a group could transform their economic circumstances through self- employment. To appreciate this discussion it is important to bear in mind the political debates of the late 1970s and early 1980s in which the merits of markets and state intervention as a means of improving personal and collective standards of living were discussed. It was a debate, especially in the United States, which was seen to have a pertinence to the issue of alleviating racial disadvantage. The Aldrich research team took the view that for the thesis of Asian success as a group through business involvement to be upheld three key criteria would have to be fulfilled (McEvoy et al 1982: 6). Firstly, there would have to be high rates of participation in retail self-employment by Asians. Secondly, most businesses should display signs of economic success. Thirdly, businesses should provide substantial numbers of jobs for other members of the Asian community.
Although they found that the Asian share of retail activity had increased, the increase simply reflected a growth in the local Asian population. Firstly, as the Asian population increased, it was able to support more outlets and also more specialised activities appealing specifically to Asian tastes. Secondly, as the Asian population increased, it obtained a larger share of businesses serving the general population. However, they contended that the overall scale of the retail and service sector meant that even where Asians were numerically dominant, these activities never resulted in business ownership for more than a minority of the immigrant community.
Tables 1 and 2 show the business performance of Asian owned businesses compared to white owned businesses.
Table 1: Business Performance
White Asian
Average number of customers
per day 152 133 Percentage grossing œ750 plus
per week 29 41 Percentage making savings
from business 50 25 Percentage wishing children
to inherit business 26 50 Percentage owning another business 19 22 Percentage in co-operative
buying groups 14 14 Average number of employees 2 2 Percentage making profit
in previous year 82 72 Percentage expecting profit
next year 78 70 Percentage same owner in 1980
as 1978 65 83 Percentage 1978 sites with
active business in 1980 90 95
Table 2: Business Inputs
White Asian
Average hours worked per week 57 61 Percentage open on Sundays 17 52 Average number of relatives
employed .61 1.35 Average number working without pay .23 .82 Average days open per week 5.6 6.2 Average hours open per day 8.9 10.1 Average years of education 9.7 10.2 Percentage with degrees 3 20(source: McEvoy et al 1982: 11)
On the basis of the indicators used in tables 1 and 2, McEvoy et al (1982: 9) concluded that there was no clear distinction between the performances of white and Asian-owned businesses. Moreover, they argued that the tables illustrated clearly that retailing was not only 'small-scale and arduous, but also economically marginal'.
When applying the third criteria for measuring Asian business success, they found that Asian businesses were largely small family-run enterprises which provided few opportunities for employment of non-relative Asians. Hence, McEvoy et al (1982: 9) reject the view that Asian involvement in small businesses represents a route into upward mobility and instead argue that it must be seen more as 'a survival mechanism for some Asians, not as a socially propulsive force for the group as a whole'. They argue that because the advantages of property ownership and autonomy are won at a cost of a low income earned only in return for extremely long and unsocial hours of work, 'Asian entrepreneurs are entering not an upward ladder leading to material enrichment, but a dead-end on the fringe of the modern economy'. Hence, taking the lead from marxists, they referred to this social group as the 'lumpen-bourgeoisie', arguing that Asian ethnicity did not provide the basis for overcoming the obstacles and marginalisation that Asians experience:
'... the socio-economic position of Asians in Britain will not be decided by the resources of the Asian communities themselves: it will be determined by the opportunities afforded by the host society. We accept unconditionally that Asian ethnicity is a source of all manner of positive assets but remain convinced that these will not exert a decisive influence ... business actually represents a waste of capital, talent and energy, by directing them into small shops whose number far exceeds the capacity of the market to support. Asian business is more a confirmation of subordinate status than an escape from it' (McEvoy et al 1982: 10).
It will be clear that the concern of these researchers is the success of Asians as a group, and little importance is placed on the possibility that self-employment may provide individuals from ethnic minorities with better employment and economic prospects than they might otherwise have enjoyed.
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