What happens to refugee-origin entrepreneurs? Combining mixed embeddedness and strategy perspectives in a longitudinal study

ABSTRACT

Whilst it is acknowledged that refugees are more likely to select into self-employment due to discrimination and labour market exclusion, we know little about how their ventures perform over time. To address this gap, we draw upon qualitative longitudinal evidence gathered in 2010 and 2018 in the UK to explore the outcomes of their ventures and what strategies they have put in place. We argue that the trajectories of refugee-owned businesses are explained by their structural position and the strategies, resources, and business support networks, highlighting that refugee entrepreneurs re-work their condition in a manner that is much more proactive and resilient than suggested by extant portrayals of refugee entrepreneurship. Our analysis sheds new light on the dynamics of refugee business development and encourages a more nuanced theoretical approach to evaluate these enterprises as vehicles for integration against the backdrop of neoliberal Britain.

KEYWORDS:

• Entrepreneurship
• labour market
• longitudinal
• refugees
• migrants
• UK

Introduction

While most refugees from persecution are confined to the global South, a significant minority are fleeing as asylum-seekers to the advanced capitalist countries of Europe and North America. Reflections in this journal highlight the way in which European countries accommodate and control refugees (van der Veer 2020); how refugees negotiate their status and turn it into an economic asset (Bardelli 2020); how race and class intersect with neoliberal policies in the context of settlement (Şimşek 2021); and the local-level management of refugee settlement schemes in the midst of austerity (Dajani 2021). In the UK, toxic media rhetoric on refugees (Hall 2020) combine with labour market barriers – notably discrimination, non-recognition of qualifications and language proficiency (Campion 2018; Obschonka, Hahn, and Bajwa 2018) – leave self-employment as one of the remaining few options (Collins, Watson, and Krivokapic-Skoko 2017).

Scholarly work on refugee entrepreneurship is fragmented and veers from snapshots of the often-precarious process of establishing a business (Werker 2007) to more sanguine accounts of such enterprises as vehicles for societal integration (Shneikat and Alrawadieh 2019). Yet we know little about the sustainability and performance of such ventures over time, during the entrepreneurial life cycle. This means that the extent to which entrepreneurship is an unrewarding trap, a viable career or a stepping-stone to a more rewarding labour market pursuit is unclear. The paucity of longitudinal studies means we have little evidence of whether entrepreneurship is just a means of survival, confined to “getting by” on a day-to-day basis, or if such ventures have scope for significant growth and as such, what influences their performance.

We present “qualitative longitudinal research” (Neale 2021) which addresses these questions by focusing on the experiences of refugee entrepreneurs between 2010 and 2018. Following Bloch’s (2020) call for more interdisciplinary perspectives on refugees, we analyse the lived experiences of refugee entrepreneurs by augmenting the sociological framework of mixed embeddedness (Kloosterman, van Leun, and Rath 1999) with Edwards et al. (2006) labour process model of small business behaviour. Mixed embeddedness (ME) theory (Kloosterman, van Leun, and Rath 1999) emphasizes the role of structural context in the shaping opportunities available to migrant entrepreneurs. Given its emphasis on under-resourced agency operating within a hostile structural environment, ME would be expected to position refugee entrepreneurship at the bottom of any migrant business pecking order. Whilst sensitive to structural context, ME is less expansive on the creativity and resourcefulness in the low-value sectors where refugees might start their ventures (Hall 2020). Hence we bring ME into dialogue with Edwards and Ram’s (2006) framework on the dynamics of small firms. The latter’s value is twofold: it derives from the experiences of firms in “low value-added sectors”; and it incorporates key agency and process dimensions that influence business outcomes, including strategy, mobilization of resources and integration into business networks. Melding these two theoretical frameworks informs our underpinning research objective: to critically evaluate the drivers and outcomes of refugee owned entrepreneurial ventures over time. To explore this question, we examine the dynamics of change over time using a longitudinal study (2010–18) based upon in-depth interviews with refugee-origin entrepreneurs. By combining ME with a theoretical sensitivity to business strategies, we analyse the diverse outcomes of refugee entrepreneurs operating in the most prosaic and competitive of circumstances.

Our blended theoretical perspective and longitudinal methodological approach enable us to explore how refugee entrepreneurs made sense of their venturing, the strategies employed during this period, access to business support, and how these affected sustainability and growth over time. Our findings suggest we should theorize refugee entrepreneurs as highly active social agents, displaying considerable inventiveness in their deployment of a multitude of strategies in the face of disadvantage. We argue that refugee entrepreneurs re-work their condition in a manner that is much more proactive and resilient than extant accounts suggest. Some even achieve significant growth. The range of outcomes is explained by social positioning (e.g. access to financial capital, Malki, Uman, and Pittino 2020), market strategies, mobilization of resources and links with wider business support networks. Consequently, we demonstrate how an interdisciplinary approach, drawing on novel empirical evidence based on qualitative longitudinal research, can add a new and dynamic dimension to the analysis of refugee entrepreneurship.

Conceptualizing refugee business context and development

The United Nation’s High Commissioner for Refugees (UNHCR) regards refugees as people who have fled war, violence, or persecution and have crossed an international border to find safety in another country. This definition draws on the 1951 Convention Relation to the Status of Refugees. Holders of asylum status in a receiving country are considered refugees and receive legal protection and material assistance (UNHCR 2018). Our main interest is in “refugee-origin” entrepreneurs – business owners with a history of forced migration, including those who are naturalized citizens of the host country. When setting up as business owners, they face the same structural barriers as all outsider entrepreneurs (Kloosterman 2010) but, at times, in a magnified form due to the loss of financial assets in transit and to resistance at both grass roots and governmental levels in the receiving country where they often experience “substantial and persistent adversity” (Shepherd, Saade, and Wincent 2020, 13).

Aspiring refugee entrepreneurs have to overcome significant barriers. After acquiring refugee status, sometimes after years in a legal status limbo, non-recognition of homeland qualifications places them at the bottom of the labour market (Hall 2020), where low pay depresses the personal savings needed for business start-up. Educated refugees are further thwarted by labour market discrimination and regulatory hurdles that influence entry into occupations and business niches (Obschonka, Hahn, and Bajwa 2018). Many are therefore reliant on social networks for job information and for the pursuit of entrepreneurial aspirations, which usually results in downward mobility (Campion 2018). Business start-up for refugees usually occurs in the least profitable market sectors (Kloosterman 2010); insofar as this exclusion is driven by racism (Jones et al. 2014), they face an aggravated version driven by the anti-refugee hysteria generated by mass movements of displaced people (Hall 2020). Evidently these obstacles are consistent with what Collins, Watson, and Krivokapic-Skoko (2017, 33) call “the paradox of refugee entrepreneurship”, the contradiction that “ … while refugees face perhaps the greatest barriers to entrepreneurship of any immigrant group, they have the highest rates of entrepreneurship of any immigrant group” (see also Bizri 2017; Heilbrunn 2019; Sandberg, Immonen, and Kok 2018; Shneikat and Alrawadieh 2019).

To grasp these structural constraints, mixed embeddedness (ME) is an apt theoretical lens to study the way in which refugee-origin entrepreneurs occupy the spaces left in the market. Emerging in the late 90s and inspired by Polanyi’s embeddedness, ME offers a corrective to previous theories of migrant entrepreneurship based on supply side analysis, which focused on the characteristics of migrants. Following Light (1972), researchers built up comprehensive analyses of the forces creating the surprisingly high rates of entrepreneurial self-employment among migrant-origin groups in advanced Western countries but largely ignored questions about the demand for these firms and the opportunities thereby created (Kloosterman 2010; Jones and Ram 2007). Striving for balance, ME’s contribution was to show these opportunities were generally restricted to low-value market sectors, where many newcomers were forced to struggle for survival. Their main hope of upward mobility was to acquire educational credentials and other skills as a means of entry to mainstream markets yielding a higher rate of return than the migrant economy.

ME is increasingly being used to conceptualize refugee entrepreneurship (Bizri 2017). However, the weight attached to structural constraints in ME underplays the strategies entrepreneurs deploy to navigate and sometimes thrive in low-value sectors. The varied entrepreneurial experiences of migrants and refugees (Hall 2015; Ram et al. 2020) also suggest a more nuanced repertoire of agential capacities than ME envisages. For example, Hall (2015) emphasizes migrants’ reimagining of the prosaic and precarious market and urban spaces in which they live and create businesses. Migrant creativity is evident in the “loose infrastructure … [in which] … shop interior and exteriors are constantly mixed and rearranged, where a hair salon merges with house cleaning services in one shop”. Innovative market strategies are facilitated by varied forms of “patch-working” or “bricolage” (Villares-Varela, Ram, and Jones 2018), where two or more earning activities are combined to maximize revenue in the interest of survival or even growth. Growth was also evident in Ram et al.’s (2020) longitudinal study of businesses run by established and more recent migrant communities (the latter included refugees); the use of formal business networks was a factor in facilitating business development.

These illustrations highlight the importance of augmenting ME’s structural analysis with the strategies deployed by entrepreneurial agents. Edwards and Ram’s (2006) framework on small firm behaviour – drawn from the field of work sociology and inductively derived from the experiences of migrant businesses – complements ME by emphasizing the strategies, resources and networks of business owners. By bringing together ME and Edwards’s framework on business dynamics we attempt to make sense of the variations in performance within our sample by exploring business owners’: (1) mobilization of resources,(2) the use of formal business networks, and (3) strategic choice. For accuracy, both resources and networks should be regarded as structural rather than agential elements, but with an important distinction. Following Archer (2003), we recognize these as enabling rather than constraining factors, facilitators rather than impediments to action. Our main concern is with their proactive deployment and whether entrepreneurs are willing and able to take advantage of the opportunities provided, to be actors rather than acted upon.

• Within the resources (1) category, our starting point is that minority business owners tend to have access to low-cost family and co-ethnic labour power. However, this cheap flexibility can often be offset by lack of skills. Other items in the resource package are as influential, with prior entrepreneurial experience in the homeland providing the basis for the creative strategizing characteristic of our sample, an approach often underpinned by advanced educational qualifications (Hall 2020). Perhaps the most potent of all assets is funding, seen by Bates and Robb (2014) as the key to minority business success (but not a focus for ME or Edwards and Ram [2006]).

• Our consideration of formal networks (2) recognizes that embeddedness in external institutions can promote growth: firms that are integrated into business support networks are more likely to be receptive to new ideas that promote business development (Ram et al. 2020). Extant literature dwells on informal networks and community links (Halilovich and Efendić 2021); we move beyond informal social capital networks by examining links with formal mainstream institutions, whose effectiveness was noted in recent study of migrant entrepreneurs (Ram et al. 2020).In the present case, we look at the use of accountants and other types of formal business support (like consultants and professional associations).

• Strategic choice (3) refers to the extent to which the firm has a clear approach on its business direction; proactive business owners are contrasted with those who are largely reactive to events. Examples of the former are in Hall’s (2015, 854) account of “migration as a participatory rather than an invasive process of change … [in which migrants] … actively participate in and shape core aspects of life in the UK”. This suggests that migrant and refugee entrepreneurship can be an assertive force carving out space on its own terms rather than, as seen by ME, existing on unwanted scraps. Typical of this is the way many of those operating in low value sectors, such as food retailing, have successfully targeted the growing migrant populations in inner cities through the import and sale of products from their countries of origin.

We suggest that variations in the permutation of strategic choice, resources and networks help to explain contrasts in the pathways of the individual firms over time for refugee-origin entrepreneurs. We argue that the Edwards and Ram (2006) approach, with its close attention to proactive resource deployment, is applicable to the special case of refugee entrepreneurs in a longitudinal study since it nuances the varied paths they take in and outside the migrant economy over time. Having been obliged to fight for survival in the literal sense, this will to live continues powerfully in their business life (Collins, Watson, and Krivokapic-Skoko 2017; Hall 2020), drawing upon creativity as well as sheer hard work.

Research design and methods

Our theoretical concern with the dynamics of refugee entrepreneurship is conducive to “qualitative longitudinal research”, which is more of a “sensibility and orientation rather than a specific research design” (Thomson and McLeod 2015, 245). It is an approach that eschews a preoccupation with the present and allows instead for an understanding of social phenomena in greater time perspective. Qualitative longitudinal research takes human agency seriously by focusing on how people “shape their evolving lives and are shaped by the evolving world of which they are a part” (Neale 2021, 2). Accordingly, our data is drawn from two waves of qualitative interviews with thirty-four refugee-origin entrepreneurs. Face to face in-depth interviews were carried out with business owners and their workers in the West Midlands (UK). The first wave was undertaken in 2010 as part of a larger study of forty-nine new migrant business owners and sixty workers (Edwards et al. 2016). The 2010 interviews focused on the experience of newly arrived migrant entrepreneurs and the sampling strategy followed purposeful criterion based on occupation (owner and workers); and year of arrival to the UK (post 2000) to distinguish these entrepreneurs from business owners from “traditional” flows of migrants. Originating in a variety of countries, our first wave respondents included ten A8 migrant-owned firms (an overwhelming majority of whom were Poles) and thirty-five African and Asian refugee-origin (Somalis, Kurds, and Zimbabweans the most numerous). Given that migrant and refugee entrepreneurs are often designed as “hard to reach” populations (Edwards et al. 2016), we relied on four trusted intermediaries trained in research methods from diverse backgrounds with access to different communities which helped us to gain access to a varied range of businesses and entrepreneurs.

The second wave interviews focused on thirty-four refugee-origin entrepreneurs from the second group of countries. This means we were able to revisit the overwhelming majority (thirty-four out of thirty-five) of refugee-origin businesses involved in the first phase. Of the thirty-four entrepreneurs in the second phase, nineteen were refugees to UK while fifteen had secured refugee status in other European countries before migrating. Although we interviewed business owners and workers, in this paper we focus on the narratives of business owners only. The business owners are predominantly male (see summary tables for breakdown by gender). The lower number of women-owned businesses in our sample is due to several factors such as the masculinized composition of the flow from the countries of origin of the refugees interviewed, but also the added barriers migrant women entrepreneurs tend to confront when aspiring to set up their businesses (Carter et al. 2015). In addition, some of these businesses might be led by male entrepreneurs but rely on family support which frequently comes from women in the family (for a discussion on the gendered dimensions of migrant entrepreneurship see Villares-Varela, Ram, and Jones 2017).

Their businesses were concentrated in a narrow range of economic sectors, notably low-end retail, catering, and personal services. Most of the businesses were in the city of Birmingham and its surrounding areas. Our focus in Birmingham helps us to move from the heavy focus on London in UK migration studies.

These in-depth interviews combined standard questions that facilitated cross-comparability between 2010 and 2018 with in-depth qualitative questions on strategic decisions and change (or the lack thereof) to capture the social mechanisms underpinning change between the two time points. Standard questions were used to establish the structure of the firm, competitive position, role and use of labour (family and non-family), use of business support, turnover, and perceived performance. This was augmented by a more exploratory approach to capture narratives on change and survival. These types of questions address key agency and choice dimensions identified by Edwards and Ram (2006), notably: strategy (especially, approach to the market); use of resources; and role of formal networks. The 2018 interviews therefore focused on changes to the business and the interplay of owner agency and structure.

We analysed the data iteratively by following a “circular-spiral pattern” (Schwartz-Shea and Yanow 2012, 28), moving back and forth between the data, emerging themes and refugee/migrant entrepreneurship literature. We followed a four-stage procedure and coded the data following template analysis (King 2012). First, informed by an inductive approach, we began by reading the transcripts of 2010 interviews, we ranked our sample’s business performance against a fourfold typology used in an earlier article (Edwards et al. 2016), in which the categories struggling, satisfactory, thriving, fast track are derived from a combination of turnover and self-assessment (Edwards et al. 2016). Thus “struggling” indicates that the business that is perceived by the owners as not generating sufficient means to survive. “Satisfactory” describes entrepreneurs who earn enough to get by but often at the cost of long working hours. The “thriving” category “indicates a living standard that is ample but falls short of the self-enrichment achieved by the fast trackers and described by the owners themselves in such terms as ‘very happy with the revenue’ or ‘very comfortable living standard’” (Edwards et al. 2016, 1596). “Fast track” is attributed to those businesses whose owners stated that they have a high income and have solid growth strategies.

Next, we immersed ourselves in the transcripts of the 2018 interviews independently. Drawing on our longitudinal data, we compared the data fragments captured in two waves to discern differences in performance. This process of analysis allowed us to clarify “what” change happened to the respondents and their firms. The third stage focused on analysing the social mechanisms underpinning this change, the “how” and “why” leading to the varied trajectories. We examined the factors that facilitated or blocked change episodes to produce an in-depth understanding of “what’s the story here?” (Weick et al. 2005, 410). Three second-order themes emerged from this process. Specifically, we clustered finance (financial assets on arrival), social capital (informal, often un-costed help from family and co-migrants), human capital (homeland experience and education level) into “resources”. We assessed entrepreneurial agency through “strategic choices”: the respondents who made proactive efforts to set up a business agenda were coded as “proactive”, and those who were passive to respond to external forces were coded as “reactive”. We also examined owners’ use of formal business “networks”, including accountants.

In the final stage, the research team brainstormed alternative themes and sub-themes (Kyratsis, Ahmad, and Holmes 2017), re-visited the whole set of sixty-eight transcripts, and holistically re-examined the (mis)fit and coherence between the data and themes. In so doing, we developed an overarching appreciation (Corley and Gioia 2004) of “what”, “how” and “why” of change in relation to refugee-origin entrepreneurs and their businesses spanning eight years.

Findings

After analysing the baseline of the 2010 categories described above, we revisited the thirty-four accounts of refugee-origin business owners and we considered several indicators: first, their structural position, which is recorded as whether firms are confined to the “migrant economy” of low-level market opportunities (Kloosterman 2010) or have broken out into mainstream market sectors. Secondly, we recorded their resources as the possession or not of financial assets on arrival in Britain, the use of informal networks (help from family and co-migrants, usually taking the form of un-costed labour) and human capital in the form of qualifications and previous business experience. We also examined the use of formal business support (like accountants, consultants, and professional associations). To represent entrepreneurial agency, we record whether they are proactive strategic planners, attempting to set a business agenda and employing a multiplicity of revenue-generating activities to underpin survival and growth. This analysis shows that our four a priori themes are re-defined into five different outcomes combining the structure-strategy-resources framework: continuing strugglers (1), upwardly mobile from “struggling” (2), satisfactory but stagnant (3), upwardly mobile from satisfactory (4) and riches to richer (5). We structure our findings around these different outcomes.

1. Continuing strugglers

Table 1 comprises nine firms that continue to struggle in the same precarious position as in 2010, highlighting the force of the structural constraints emphasized by ME. The cases illustrate the effect of a dearth of resources, networks and strategizing, the activation of which is important to business development (Edwards and Ram 2006). Common to all was inadequate funding and to all but one the absence of prior experience and networks, while reactive behaviour was also the norm. Downward mobility is most evident here since all possessed advanced educational credentials but have fallen victim to the standard non-recognition of overseas qualifications. The case of internet café owner MU10 is instructive:

I have a qualification back home … and I was at university, progressing in Health … I was trying to get a job but I couldn’t get any. It was hard to get a permanent job to support my family. So I decided to start my own business. I didn’t know how to get back into my nursing career or if my qualification was going to be accepted here in this country. I started my own business

Applying the strategy-structure-resources rubric, the key findings here are a concentration in low-end market sectors and a lack of both funding and homeland business experience. Viability was compromised from the outset by meagre financial resources on arrival, often compounded by an inability to accumulate personal savings from low wage employment. Occasionally negative experiences in the British labour market have catapulted the respondent directly into self-employment, as with Zimbabwean window cleaner MU7 who “left my previous job after suffering racial and physical abuse from fellow workers”.

Table 1. Firms continuing to struggle 2010–18.

Interviewee ID	Type of Business	Country of Origin	Gender	Sector	2010 Performance	2018 Performance	Resources (2018)				Formal networks (2018)		Strategic choice (Proactive/Reactive)
							Finance	Informal social capital	Homeland business experience	Education level	Business support networks	Accountant
MU1	Internet café	Ghana	Male	Migrant economy	Struggling	Struggling	Minimal	Fam	No	Higher Education	No	Yes	Proactive
MU5	Hair/beauty	Zimbabwe	Male	Migrant economy	Struggling	Struggling	Minimal	Fam	No	Higher Education	No	No	Reactive
MU6	African food shop	Nigeria	Female	Migrant economy	Struggling	Struggling	Minimal	Fri	No	Higher Education	No	No	Reactive
MU7	Window cleaner	Zimbabwe	Male	Migrant economy	Struggling	Struggling	Minimal	Fri	No	Higher Education	No	No	Reactive
MU9	Driving tuition	Tanzania	Male	Mainstream	Struggling	Struggling	Minimal	Fam	No	Higher Education	No	No	Reactive
MU10	Internet café	Somalia	Male	Migrant economy	Struggling	Struggling	Minimal	Fam	Yes	Higher Education	No	No	Reactive
MU12	IT	Rwanda	Male	Mainstream	Struggling	Struggling	Minimal	Fam	No	Higher Education	No	No	Proactive
HM2	Butcher	Iraq (Kurdish)	Male	Migrant economy	Struggling	Struggling	Minimal	Fam & Fri	No	Higher Education	No	No	Reactive
HM3	Internet cafe	Iraq (Kurdish)	Male	Migrant economy	Struggling	Struggling	Minimal	Fam & Fri	No	Higher Education	No	No	Proactive

Structural factors aggravate matters further, as with MU1’s internet café venture operating amid the spatial disadvantage of a low-income Birmingham neighbourhood, a poverty-stricken market fought over by “many internet cafes and money transfer agencies”. As the owner laments in his 2018 interview

This is a very poor deprived place, many people are jobless, on benefits, drug addicts and alcoholics and people do not have enough money to transfer abroad, or to send emails or use phones. (MU1, owner of internet café, Ghana)

This is also a case of weak entrepreneurial agency, with the owner failing to take proactive measures for improvement, a feature common to all Table 1 respondents, only three of whom developed the supplementary earning streams characteristic of their upwardly mobile counterparts.

Overcrowded markets and a dearth of custom blight this group, with Rwandan IT repairer MU12 on the brink of closure despite being propped up by the unpaid labour of his wife. Others surviving by virtue of unwaged assistants are MU6, MU7 and Tanzanian driving instructor MU9 whose paperwork is undertaken by his wife. Additionally, we note that patch-working generally takes the low-level stopgap form of second job-holding, most often on the part of a spouse or other relative.

The parlous finances of the strugglers are starkly illustrated by MU5, a Zimbabwean hairdresser who remains stuck on an annual turnover of less than £10,000, while for MU9 his driving school revenue has shrunk from 2010–18:

Now’s it’s even worse. 2010 was far better when there were … few businesses of my type … . Now there are very many … I don’t know what to do. (MU9, driving tuition, Tanzania)

This respondent’s attempt to break out into the market mainstream has been thwarted, as has MU12’s IT venture, a sad lack of reward for the initiative. MU12, like others in this category, was detached from formal networks that might have the specialist expertise to help modernize his business: “The people I turn to for business advice is my helper. Otherwise I don’t know where to turn to … I [would be] really happy to get the support that I need”.

Extreme competition, austerity (impoverishing owners and customers alike) and an overdependence on family support fuelled a decade long struggle for survival. Such powerful structural constraints were unlikely to be overturned by owners with meagre finances, the sweating of family and co-migrant labour, and a lack of knowledge of more productive ways of working.

• (2) Upwardly mobile from “struggling”

This category comprises businesses which have shifted upwards from a “struggling” position in 2010. “Upwardly mobile” is used as a shorthand for a shift from one business performance category to another. The modest uplift secured by the five owners in Table 2 entailed pitting arduous and sometimes highly creative effort against meagre resources, an intense battle in which entrepreneurial agency strives to free itself from rigid structural boundaries; this in itself justifies examining this group separately.

Table 2. Firms upwardly mobile from “struggling” to “satisfactory” (2010–18).

Interviewee ID	Type of Business	Country of Origin	Gender	Sector	2010 Performance	2018 Performance	Resources (2018)				Formal networks (2018)		Strategic choice (Proactive/Reactive)
							Finance	Informal social capital	Homeland business experience	Education level	Business support networks	Accountant
MU3	Fabric design	Zimbabwe	Female	Mainstream	Struggling	Satisfactory	Minimal	Fam & Fri	No	Higher Education	Yes	No	Reactive
MU4	Fish stall	Tanzania	Male	Migrant economy	Struggling	Satisfactory	Minimal	Fam &Fri	No	Higher Education	No	No	Reactive
HM4	Mini market	Iraq (Kurdish)	Male	Migrant economy	Struggling	Satisfactory	Adequate	Friends	Yes	Secondary Education	No	No	Reactive
LO4	Money transfer/travel agency	Somalia	Male	Migrant economy	Struggling	Satisfactory	Adequate	Family	No	Higher Education	Yes	Yes	Reactive
LO5	Mini market	Somalia	Male	Migrant economy	Struggling	Satisfactory	Adequate	No	No	Higher Education	Yes	Yes	Proactive

Illustrative is MU3, a young Zimbabwean woman whose business problems – “I have made very little money to live on” – are aggravated by her status as a single mother. She describes her business as “[fashion] design plus designing wallpaper, rugs and fabrics for interiors”. Although this specialism (based on a degree in Textile Design) is a departure from the typically narrow range of migrant specializations, her difficulties in establishing herself may explain why most migrants prefer easier-to-enter sectors. Mainstream sectors are simply more capital intensive and in her 2010 interview she cites under-capitalization as her main barrier, “lack of funds to purchase all the equipment needed. It has been a very slow start”. Informal social capital coupled with extra-mural employment offers salvation of sorts, “I just have donations from friends and income from a part-time job”. Friends and family supply labour but “I can’t pay them any wages”.

In the case of MU4, Tanzanian owner of a fish stall in Wolverhampton market, turnover has doubled over the 2010–18 period. Even so he finds it “hard to make ends meet because we are three people working in this business – although I don’t pay them”. Somewhat ironically this looks like a growth business according to its revenue figures but obviously feels like a struggling survivor to those within. A highly competitive market is the immediate problem while a long-term threat looms over the leasing of the premises. This case, like others in this category, illustrates co-existence of economic dexterity and precarity. A “litmus-like response to the less affluent urban population that it communicates with” (Hall 2020, 146) is crucial to the survival of progress of these firms.

If these owners did seek guidance, it was within confines of social networks, “I don’t go to anybody for advice except my family and friends … I don’t know anybody who can give me advice … I do operate the way I think is the best” (MU4). But LO4 and the even higher-performing LO5 were different in this respect, with a more strategic approach to the market. LO4 and LO5 were integrated into the kind of formal business networks associated with business growth (for example employer associations and business support agencies). LO4 compensated for the dwindling fortunes of his money transfer business by securing a grant to diversify his business into travel, specializing in religious pilgrimages, “I think this will complement the drop in our customers from the money transfer business”. This proactive managerial approach is more characteristic of higher performing firms, as his use of formal sources of business advice from consultants and specialist agencies (Edwards and Ram 2006). The modest overall increase in turnover differentiates this firm from those in a higher classification.

LO5 also made the transition from struggling to satisfactory. The owner – a graduate in business administration – claims he is “proactive” and collaborates by “sharing intelligence” with other firms. He actively “markets the business to the local migrant community”, and has diversified his operations to incorporate a butcher’s shop within a mini-market. He gets “regular” advice from a business adviser, his accountant and a “loyal network of business associates”. Significantly LO5 is one of several respondents who have migrated to Britain from their initial country of asylum with the express intention of business entry. “I came to UK to establish a business because there are no opportunities for establishing a business in Denmark”.

• (3) Satisfactory but stagnant

This category includes owners who were satisfied with their business performance despite remaining stagnant. In this instance, we see another distinct permutation of agency and resources. Prominent here is the proactivity of all six owners, a factor compensating for rather modest resources. However, this has not been devoted to growth but to consolidating satisfactory living standards and lifestyle (Table 3).

Table 3. Satisfactory but stagnant firms.

Interviewee ID	Type of Business	Country of Origin	Gender	Sector	2010 Performance	2018 Performance	Resources (2018)				Formal networks (2018)		Strategic choice (Proactive/Reactive)
							Finance	Informal social capital	Homeland business experience	Education level	Business support networks	Accountant
HM1	Mini market	Iraq (Kurdish)	Male	Migrant Economy	Satisfactory	Satisfactory	Minimal	Friends	No	Higher Education	No	No	Proactive
LO7	Computer phone shop	Somalia	Male	Migrant economy	Satisfactory	Satisfactory	Minimal	Fam	No	Postgraduate	No	Yes	Proactive
LO8	Computer phone shop	Somalia	Male	Migrant economy	Satisfactory	Satisfactory	Adequate	Fam & Fri	No	Higher Education	No	Yes	Proactive
LO11	Accessories shop	Somalia	Male	Migrant economy	Satisfactory	Satisfactory	Adequate	Fam & Fri	No	Higher Education	No	Yes	Proactive

Earlier studies (Jones, McEvoy, and Barrett 1993) have shown this comfortable stasis to be typical of immigrant firms; but only four are in this category here, rather less than one fifth of the total. Some common themes unite this eclectic group (Halal butcher, clothing importer and two computer stores). First, there is general acceptance – and satisfaction – with the business position. The Kurdish owner of a Halal butcher shop and convenience store reflected on his business goals: “My main goals were to establish a convenience store … [for] Kurdish people living locally … I have achieved my goals … because the business has permitted me to have an adequate living … nice car and my family are happy” (HM1).

For Somali computer shop owner LO7 satisfaction lies in the “craft ethic” (Storey 1994), pleasure in using refined skills, “I decided to go into buying, selling and servicing computers … because I have a wealth of knowledge and skills in IT”. Note here that this is another aspect of the complex pattern of entry motives. Echoing the key element of personal choice in the Edwards and Ram (2006) framework, these owners prioritize subjective measures of success – for example, strength of social ties and life satisfaction, rather than objective notions of business growth and turnover (see also Campion 2018).

Second, the most common managerial response to tough competition – mentioned by all business owners – was to rely on a loyal group of customers. These owners are part of “an economy sustained by regular clients and their ongoing commitments to investments of time and money” (Hall 2020, 140). Strong links with the local Kurdish community were vital to HM1. Clothing importer LO11 relied on a “network of business contacts” for his sales. Local networks were also important to the two computer stores located in different parts of the City (LO7 and LO8). As LO8 conveyed:

The competition is tough, and rivals … copy [our] products and prices … It depends [if] customers … trust in you … We have maintained … trust in what we do and that’s why customers keep coming. (LO8, computer repair shop, Somalia)

Third, there was little incentive to look beyond close social networks for guidance to alter business models that had proved satisfactory, “[t]he advice I get is mainly from my Kurdish social network circles … They know what [I] need … and I speak to them often for advice” (HM1). All four firms have cushioned themselves through bricolage, in each case running two or more revenue streams. This suggests that entrepreneurs are prepared to take proactive measures to maintain their position.

• (4) Upwardly mobile from satisfactory

This category includes businesses whose growth between 2010 and 2018 was strong enough to propel them into the “thriving” category. Here again is a distinctive permutation of the agency-resources framework, with every one of the six entrepreneurs proactively seeking to maximize revenue and compensate for a modest resource base (Table 4).

Table 4. Firms rising from “satisfactory” 2010–18.

Interviewee ID	Type of Business	Country of Origin	Gender	Sector	2010 Performance	2018 Performance	Resources (2018)				Formal networks (2018)		Strategic choice (Proactive/Reactive)
							Finance	Informal social capital	Homeland business experience	Education level	Business support networks	Accountant
MU2	Food shop	DRC	Male	Migrant Economy	Satisfactory	Thriving	Minimal	Fam	Yes	Higher Education	No	No	Proactive
MU8	Bar/rest	Uganda	Male	Migrant Economy	Satisfactory	Thriving	Minimal	Fam	Yes	Higher Education	No	No	Proactive
MU11	Butcher	Zimbabwe	Male	Migrant Economy	Satisfactory	Thriving	Minimal	Fam	No	Postgraduate	No	No	Proactive
LO6	General store	Somalia	Male	Migrant Economy	Satisfactory	Thriving	Adequate	No	Yes	College	No	Yes	Proactive
LO9	Restaurant	Somalia	Male	Migrant Economy	Satisfactory	Thriving	Adequate	Fam & Fri	No	Higher Education	No	Yes	Proactive
LO10	Mini market	Somalia	Male	Migrant Economy	Satisfactory	Thriving	Adequate	Fam	No	Higher Education	No	Yes	Proactive

These owners displayed considerable insight into the needs of the cosmopolitan communities in which they operated, frequently responding by changing their market strategies and business models. LO6, a veterinary science graduate with homeland business experience, sold his general food store and started another business as a specialist coffee shop with restaurant facilities. His focus on “quality” and “taste” led to a five-fold increase in turnover: “Many Somali and people of Arab origin … are coffee addicts/Arab tea addicts, so our restaurants and coffee shop [have] high number of customers”. The “unique” cuts of meat produced by butcher MU11 proved so popular among his African clientele that he opened another store in a nearby town where many of his customers travelled from. MU8’s status as one of the few African bar/restaurants in West Midlands with a city centre location allowed him to triple his turnover, a considerable achievement in the face of initial under-capitalization and poor savings from previous employment, “I got tired of working for other people with no good pay and no respect”.

MU2’s acute reading of consumer preferences prompted him to source foodstuffs from Africa and other parts of Europe, mobilizing the kind of diasporic ties alluded to by Hall (2020):

Many [customers] like food from their countries of origin … I import from France and Belgium [too]. Without those services we wouldn’t have achieved our goals. We listened to our customers [It’s] is the reason … why … we succeed … We diversify … [in response to] market demands … defined by our customers. (MU2, food shop, DRC)

MU 2 has even opened a barbershop since 2010; it employs migrants from his country of origin and provides a local service. This respondent’s track record of homeland business experience may well be a factor in his confident matching of supplies to customer demand. His background, closeness to customers and fellow proprietors allowed him to “respond a regular basis to the nuances of the market and emerging trends” (Hall 2020, 143).

“Flexible” labour use and deployment – paid and unpaid – enabled business growth without significant increases in formal employees. Spouses played a key role. Scrutiny of his 2010 interview also revealed a sizable injection of start-up capital from MU2’s family members, which financed major alterations to his premises changing it into “a very good building … a very nice place according to feedback from the people who come here”. Creating an attractive social venue has evidently maximized what otherwise would have been limited market potential. The unpaid labour of MU 11’s wife in the business allowed him to work as full-time nurse and pursue a Master’s level qualification. MU2’s wife’s income as a full-time social worker is an important source of financial stability. Unofficial “helpers” – often paid cash-in-hand – were routinely used by these firms and complemented the efforts of family members and formal employees. They were integral to LO10’s supermarket chain, acting as a buffer against trade fluctuations: “[Helpers] don’t have contracts. They are important … I can hire them at any time and can be called when the need arises”.

The proactive cultivation of social and customer networks was a recurring theme and the main source of business support for these firms. MU11’s social networks and regular customers were a critical resource:

I do ask them what products they would like to see in the shop … Also, I do ask them to speak to their social networks and they bring more customers in this business. … Their advice is important to us and it makes the business what it is now. (MU11, butcher, Zimbabwe)

Similarly, MU2 consults his social circles and customers for advice about marketing and products, “you can’t do business without them”. MU8 doubts if there is “much business help that is outside there for us” and relies on friends and family.

• (5) Riches to richer

The dynamic nature of refugee entrepreneurship is illustrated by an impressive ten firms in our highest performance category, the fast trackers. Previous research (e.g. Storey 1994) on small businesses suggests that genuine fast trackers are rare; but this ratio exceeds one in four in our sample. When we come to explain this success within the synthesis of ME and activation of strategy-resources-networks in Edwards et al.’s dynamic model, we find that the firms have climbed to the summit via different pathways. At the same time every single asset has been brought to bear; in addition to generous funding, prior experience, formal support and proactive deployment of resources.

The critical role of financial capital is pronounced at this level of performance. Important though it is to acknowledge entrepreneurial agency. The authoritative definition of social agency offered by Emirbayer and Mische (1998, 1005) emphasizes the “capacity of resource-equipped actors to act creatively” [our italics], a formulation which identifies the possession of resources as a prerequisite for effective action. In the realm of enterprise, financial capital has repeatedly been shown to be a critical resource (Bates and Robb 2014). This is evident in the present sample. Table 5 profiles three firms classified as “fast track” in both 2010 and 2018, together with seven businesses moving from thriving to fast track over that period.

Table 5. Fast track enterprises.

Interviewee ID	Type of business	Country of Origin	Gender	Sector	2010 Performance	2018 Performance	Resources (2018)				Formal networks (2018)		Strategic choice (Proactive/Reactive)
							Finance	Informal social capital	Homeland business experience	Education level	Business support networks	Accountant
LO1	Supermarket	Somalia	Male	Migrant Economy	Thriving	Fast Track	Adequate	Fam & Fri	Yes	Higher Education	Yes	Yes	Reactive
LO2	Clothing	Somalia	Female	Migrant Economy	Thriving	Fast Track	Adequate	Fam	Yes	Secondary Education	Yes	Yes	Reactive
LO3	Mini market and money transfer	Somalia	Male	Migrant Economy	Thriving	Fast Track	Adequate	Fam & Fri	No	Higher Education	Yes	Yes	Reactive
LO12	Pizza/burger	Iran	Male	Migrant Economy	Thriving	Fast Track	Considerable	Fam	Yes	Higher Education	Yes	Yes	Reactive
LO13	Grocery shop	Iraq	Male	Migrant Economy	Thriving	Fast Track	Considerable	No	No	Postgraduate	Yes	Yes	Proactive
LO14	Restaurant	Iraq	Male	Migrant Economy	Thriving	Fast Track	Considerable	Fam	Yes	Higher Education	Yes	Yes	Proactive
LO15	Supermarket	Afghanistan	Male	Migrant Economy	Thriving	Fast Track	Considerable	Fam & Fri	Yes	Higher Education	Yes	Yes	Proactive
LO16	Restaurant	Iraq	Male	Migrant Economy	Thriving	Fast Track	Adequate	Fam & Fri	Yes	Higher Education	Yes	Yes	Proactive
LO17	Restaurant	Iraq (Kurdish)	Male	Migrant Economy	Thriving	Fast Track	Adequate	Fam & Fri	Yes	Higher Education	Yes	Yes	Proactive
LO18	Supermarket	Afghanistan	Male	Migrant Economy	Thriving	Fast Track	Adequate	Fam & Fri	Yes	Higher Education	Yes	Yes	Proactive

A significant feature of this group is their access to large amounts of financial capital with five of the above respondents describing having sizeable financial assets on arrival. Despite fleeing persecution, they have nevertheless contrived to transfer significant sums from homeland to Britain, a manoeuvre demonstrated by LO15, who, in retreat from the Taliban, has in effect relocated his entire family retail business from Afghanistan to Birmingham. When first interviewed in 2010 his annual revenue was recorded as between £250,000 and £1 million and by 2018 had exceeded £3 million. This vigorous growth tendency is common to all in this group; LO13’s turnover has doubled over 2010 to 2018 and LO16’s has tripled, while many others reporting similar increases in revenue.

An abundance of capital is not the sole reason for success. A judicious combination of resources with the entrepreneurial agency was evident in many cases. For example, LO15’s original retail food outlet was carefully located to tap into a neighbourhood consumer market dominated by migrants, students and other youthful shoppers, all the better to appreciate his wide range of exotic imports. Subsequent growth has been underpinned by strategic and proactive decision-making,

We took a risk … we sold six businesses at a substantial profit and maintained four others … We continually assess our core exotic products, our efficiency and financial position, our suppliers, maintaining the same level of employees and paying them well. We also regularly review our competitiveness and we conduct customer satisfaction and market analysis surveys. (LO15, supermarket, Afghanistan, 2018 interview)

A similar attentiveness to quality and distinctiveness eased restaurateur LO9 from “upwardly mobile” to the “fast track category”. Despite fierce competition, he maintains “not a single one is near to our standard”.

For these entrepreneurs, funding is more effective when deployed with proactive management. However, this is not a simple combination. Rather it is a dynamic interplay in which access to resources enables agency to take flight. Whereas with smaller under-capitalized firms patch-working is a matter of bolting on extra earning lines in a single site, with firms like L015 it is more a matter of acquiring whole new branches.

Even greater territorial expansion is achieved by LO12, the Iranian co-owner of a pizza and burger chain in the West Midlands with over 100 employees. He started with eight full-time workers and a turnover in excess of £2 million. The owner invested in technology and embraced online orders and home delivery. Once again, we note the combination of ample resources and proactive agency. In his 2010 interview, LO12 described his start-up capital as deriving from “my previous investment in my home country” together with inputs from a partnership with several fellow Iranians. But the initial stages were bumpy, “we were really struggling to keep the business running due to financial constraints and being new to the West Midlands”. A bank loan (subsequently repaid) overcame what now looks like a hiccup and the venture recovered and blossomed “until where it is now”. As with LO15, the effectiveness of resources has been magnified by their carefully targeted deployment, “I decided to go into this business because there is a need for … cheap food at a convenient place … people who are unemployed or working in low-income jobs are not prepared to purchase from very expensive restaurants”. While this is admirable strategizing, its effectiveness is critically enhanced by financial resources. LO14’s success exemplifies the importance of strategizing, a rich resource base, appropriately skilled staff, and business networks (key elements in Edward et al.’s framework).

I went to Dubai and brought a key unique selling point by injecting huge sums of money, rebranded the business … employing professional trained chefs, … agreed with several suppliers what to supply … We took risk, and the business has massively changed in the past year.

Despite the importance of funding, several upwardly mobile fast trackers enjoyed success with moderate funding. For example, LO1 is a Birmingham-based food retailer, whose start-up capital was pooled from a small group of co-nationals and whose subsequent development seems to have been driven by energetic and well-planned patch-working, his initial food retailing now accompanied by a halal butchery, a restaurant and a money transfer facility. Not only does each of these lines create its own revenue but by helping to increase his customer footfall they also boost the others.

Many firms in the sample utilized external expertise. LO1 – “comfortable enough with … informal advice” in 2010 – now looks to his bank adviser and accountant to guide him on business issues. The owner relied on friends and family in 2010 because he had little knowledge of the business environment in the UK before he migrated from Demark. In 2018, he uses advisors routinely:

as business grows financially, you need to show … good practice … I can’t do it with the help of my family or friends, but with competent, highly skilled and professional advisors … These sources … know the business environment, … its regulations and policies. (LO1, supermarket, Somalia) (Ram et al. 2017a, 59)

Accountants are an important source of support in virtually all the cases and appeared to be used for advice on employment as well as financial matters. Yet the use of external business support and significant growth did not signal the end of “informal” practices like the use of helpers. They were instrumental to LO16’s growth from a single restaurant in 2010 to a chain of three in 2018: “Yes, we use a lot of workers to help out, but they don’t have contracts. The difference between employees and helpers is that they are not paid on payslips and don’t have contracts of employment”. For workers then if not for owners, precarity was an endemic feature of life in a “successful” refugee enterprise.

Discussion

A temporal approach sensitive to the shifting dynamics of context and the evolution of agential strategies is important to explain the entrepreneurial performance of refugees. As others have noted, ME foregrounds the role of market exclusion in frustrating the potential of migrant entrepreneurs and compelling them to operate in the under-rewarded sectors unwanted by indigenous firms (Ram et al. 2017a; Ram, Jones, and Villares-Varela 2017b). ME insists that market segregation is the main obstacle for these entrepreneurs. But strategic choice matters; and the agency aspects of Edwards and Ram’s (2006) framework, augmented by financial resources, helps to explain the varying outcomes of entrepreneurial refugees. It highlights sectoral norms, the often local and highly specific character of the markets, and the “entrepreneurial effect” of different levels of management expertise, experience, strategies and access to capital (Arrowsmith et al. 2003).

The trajectories of refugee-origin entrepreneurs operating in similar circumstances are surprisingly diverse. At one pole we discover a handful of businesses with multi-site outlets, turning over millions of pounds and growing vigorously. These ambitious entrepreneurs possess significant financial capital, use inventive market strategies, and draw on “flexible” labour to meet fluctuating consumer demand. Surprisingly, many utilize external expertise (notably accountants) and business support intermediaries to help them grow and engage (selectively) with regulatory requirements. In contrast, the “strugglers” are more consistent with extant studies (Barak-Bianco and Raijman 2015) informed by structural perspectives. They arrived in the UK with minimal capital, little or no job choice, founded small ventures from meagre resources and were still struggling on the margins when interviewed a second time. Their continued survival is testimony to the refugee resilience highlighted by Collins, Watson, and Krivokapic-Skoko (2017).

Between the two extremes, however, there is considerable movement, much of it upward and expressing the way in which many of these new arrivals have overcome myriad obstacles in an alien environment. For the majority, growth is a common experience, its magnitude and form varying from firm to firm according to the mix of proactivity, structure and resources, sometimes producing unexpected outcomes. Financial resources – absent in ME and Edwards and Ram (2006) – clearly facilitate the capacity for survival. On the one hand, agential initiative tends to be constrained by its absence, when business owners stepped outside the narrow market space reserved for outsiders and found themselves under-capitalized for these more demanding mainstream markets. On the other hand its availability allows respondents to actually flourish in that self-same space in the face of harsh competition.

Refugee entrepreneurs’ surprising durability, growth, and engagement with formal institutions did not necessarily result in more enlightened approaches to labour management. The model of a socially tied core of workers (paid and unpaid) co-existing with a disposable periphery was common across the categories. This suggests that contemporary interest in refugee entrepreneurship as a means of “integration” needs to be more nuanced: inequality and exploitation co-exists with business survival and growth.

Conclusion

Our research has examined how refugee-origin entrepreneurs in the UK fared during a time-span disfigured by Brexit and austerity (Hall 2020). Despite a public discourse of pessimism and a hostile market environment, our sample of firms survived without a single failure, and in some cases thrived. Quite how remarkable this is can be judged from a comparison with the general small firm population, where it is suggested that one in five owners abandon their start-ups after less than one year (Shane 2008). In this article, we contribute to the refugee and migrant entrepreneurship discourse by providing a temporal approach which not only supplies empirical data about survival rates but also allows for a dynamic understanding of social agency (Emirbayer and Mische 1998). Our theoretical contribution has been to create a fusion between the stringent structural constraints laid down by ME and the strategic choice and resource deployment highlighted by Edwards and Ram (2006). In this way we give full play to entrepreneurial agency, a factor denied by pure ME but which is vital in the case of actors whose will to survive has been put to the test during their often perilous flight.

Our formulation chimes closely with the growing application of what Obschonka, Hahn, and Bajwa (2018, 173) call “an agentic perspective in the study of refugees”, though it avoids the rather narrow psychological approach of these authors. Instead, it sets up a combination of strategic choice, resource deployment and business support (Edwards and Ram 2006) to complement the structural framing of ME. In this way the study showed how entrepreneurs in mundane and precarious market sectors mobilized resources and networks to develop innovative survival and growth strategies. This integrated approach helps to explain the role of migrants in the “day-to-day arrangements of micro-economies that emerge from local and global connections” (Hall 2015, 857), and the many creative ways in which refugee entrepreneurs cope with precarity.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Correction Statement

This article has been corrected with minor changes. These changes do not impact the academic content of the article.

Additional information

Funding

This work was supported by Low Pay Commission.