Professional Documents
Culture Documents
Journal of Small Business & Entrepreneurship: To Cite This Article: Leo Paul Dana (1993) AN INQUIRY INTO CULTURE AND
Journal of Small Business & Entrepreneurship: To Cite This Article: Leo Paul Dana (1993) AN INQUIRY INTO CULTURE AND
To cite this article: Leo Paul Dana (1993) AN INQUIRY INTO CULTURE AND
ENTREPRENEURSHIP: CASE STUDIES OF BUSINESS CREATION AMONG IMMIGRANTS
IN MONTREAL, Journal of Small Business & Entrepreneurship, 10:4, 16-31, DOI:
10.1080/08276331.1993.10600436
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AN INQUIRY INTO CULTURE AND
ENTREPRENEURSHIP: CASE STUDIES OF
BUSINESS CREATION AMONG
IMMIGRANTS IN MONTREAL
Leo Paul Dana, McGill University, Montreal
ABSTRACT
It has been recognized that marginality is the explanatory variable for entrepreneurship
among marginal groups, however, not all marginal groups are entrepreneurial. Some
ethnic groups, and as Haitians interviewed in this empirical study, have a culture
which neither looks favourably upon, nor encourages entrepreneurship as a desirable
means of livelihood. For some, entrepreneurship tends to be seen as an occupation
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SOMMAIRE
II est admis que Ia marginalite est Ia variable explicative de /'esprit d'entreprise parmi
/es groupes marginaux. Cependant, to us les groupes marginaux n 'en sont pas dotes.
Certains groupes ethniques, comme /es Hartiens interroges dans le cadre de cette etude
empirique, ont une culture qui ne considere pas favorab/ement ni n'encourage Ia
carriere de chef d'entreprise comme moyen de gagner sa vie. Pour d'autres, diriger
sa propre entreprise semble n 'etre qu 'un dernier recours.
En revanche, l'origine ethnique n'est pas en soi une explication suffisante. Les
entrepreneurs indiens protestent qu 'ils ne seraient pas devenus des chefs d'entreprise
dans leur environnement natal. Cet environnement, c'est-a-dire /es reg/ements, Ia
fiscalite, /e reseau ethnique, etc., peut encourager ou decourager /'esprit d'entreprise.
La culture de certains les porte a admirer /es chefs d'entreprise. Pour d'autres,
c'est un moyen de composer avec Ia marginalite : Ia necessite est Ia mere de toutes
/es en/reprises. Cette etude suggere ega/ement que les repondants etaient animes d'un
esprit d'entreprise avant de quitter leur terre natale et que leur immigration au Canada
etait en soi une preuve de cette caracteristique.
INTRODUCTION
The issue of immigration policy is a recurring one in national debates, as there are
numerous arguments for (1), and against (2) increased immigration. One concern is
that of cost/benefit to a host society. The global trend has been one of increased flow
of immigration. In Australia, for example, although immigration was traditionally
very selective (as to origin) the recent implementation of the Business Migration
16
Program permits entry to those with substantial cash available for new ventures
creating jobs (3).
In a session with the author, the Rt. Hon. Joe Clark, Secretary of State for
External Affairs of Canada, stated that immigrants bring with them to Canada not
only their cash and their talents, but also their problems. However, it would be a
fallacy to group all immigrants in a homogeneous category; there are important
differences due to cultural and other factors. A study by Multiculturalism Canada (4)
groups immigrants according to ethnocultural origin, revealing that Greeks and Jews
are the most entrepreneurial groups, tending to have a rate of self-employment
approximately eight times that of Filipinos in Canada.
In the past several years, considerable literature has been available on immigrants
and their ventures in new countries such as the US (5) and the UK (6). In Canada,
however, research is limited (7)(8)(9). If the government is interested in job creation,
it would be useful to know more about immigrants and their activities. When selecting
among potential applicants, the government may wish to attract those most likely
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to create employment.
The study of immigrant entrepreneurs is complex due to the interaction of
individual and societal variables, including factors which are functions of a host society
as well as the entrepreneur's country of origin and culture. Kets de Vries (10),
Brockhaus (11), Timmons, Smolla and Dingee (12), Brockhaus and Horwitz (13),
Gasse (14), Begley and Boyd (15), and Sexton and Upton (16) are among many who
focused onto psychological traits as major factors in the entrepreneur's ability to
perceive an opportunity and act entrepreneurially. When studying immigrant entre-
preneurs, one quickly learns that what may be perceived as an opportunity in one
culture may not constitute an opportunity for somebody conditioned in another culture.
Weber (17), Shapero and Sokol (18), Jenkins (19), Reeves and Ward (20),
Shapero (21), and Ward (22) are among many who noticed that there exists more
entrepreneurial behaviour in some cultures than in others. Boissevain and
Grotenbreg (23) noted that some cultures are particularly less entrepreneurial than
others.
Also in the culturalist vein is a study by Woodrun (24) who found participation
in religious activities and adherence_ to ethics to be predictors of motivation and
entrepreneurial success among Americans of Japanese origin. Min and Jaret (25)
linked cultural characteristics to entrepreneurial success among Koreans in Atlanta.
They found a strong positive correlation between success and adherence to the cultural
values of frugality and the work ethic. Min (26) also incorporated culture as an
explanatory variable for entrepreneurship. According to Min, some minority groups
have cultural characteristics which are conducive to entrepreneurship.
To Hagen (27), not culture, but marginality of a culture, is the explanatory
variable for entrepreneurship. Ladbury (28) provides empirical evidence to support
this approach. She found that Turkish Cypriots became entrepreneurs as a function
of marginalization. Min (29) also found such disadvantage to be a motivating factor
of entrepreneurship, in a study of Korean immigrants. Min (30) elaborated on the
same theme, explaining that his Korean sample was more entrepreneurial than his
Filipino sample because the Koreans perceived disadvantage to a greater degree.
Weaknesses of this approach include the fact that Hagen does not explain the case
where the marginals are not entrepreneurial. In Argentina, for example, the Mendocinos
are dominant entrepreneurs; yet they are not marginal, but are the elite. Sometimes
the minority is not entrepreneurial. Jenkins (31) pointed out that in Northern
Ireland it is the majority Protestants who dominate the entrepreneurship sector.
Hagen's approach does not explain such cases.
17
New Canadians own more than 16 per cent of the small-business sector in Canada,
yet little is known about them. Do some groups become entrepreneurs as suggested
by Weber ( 17) because of their native culture? Many successful immigrants from India
are entrepreneurs in Canada; however, India is not an environment which encourages
entrepreneurship. Hagen's (27) view, on the other hand, does not explain that some
marginal groups tend to refrain from entrepreneurial activity. A Government of
Canada study (4) shows that among immigrants from the Caribbean, the number
of self-employed is negligible.
The purpose of this exploratory study is to identify entrepreneurial activity in
three different immigrant groups in Montreal: Haitians, Indians and Italians.
Painchaud and Poulin (32) studied the Italians; less research is available on the other
two groups, perhaps because of their more recent arrival in Canada.
METHODOLOGY
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IMMIGRANTS
In other industrialized countries, immigrants own 8 per cent of the businesses; in
Canada, they own more than 16 per cent (33). Although they make up only 16 per
cent of the population in Canada, immigrants own 20 per cent of unincorporated
businesses. Ethnocultural communities have thus emerged as a significant sector of
the economy.
In the past, it was speculated that one reason for high levels of self-employment
among immigrants might be the lack of alternative employment due to discrimination,
disadvantage or, as Hagen (27) suggested, "social marginality". Such a theory does
not hold for all groups, however, as research findings reveal data indicating that:
those persons in the labour force who reported ethnic origins
considered as visible minorities, have a relatively smaller
representation in self-employment than those who reported other
origins. Out of every one hundred individuals considered to be visible
minorities, about seven are self-employed. This is in comparison to
nine in 100 of those with other ethnic origins. (4)
18
If immigrants opt for self-employment because of discrimination, the visible minorities
should not experience less discrimination than the others.
Might education be a causal variable? Hisrich and Brush (34) suggest minority
entrepreneurs lack managerial training. Bates (35) finds that most self-employed
immigrants who lack education go into retail business, while those with upgraded
education enter new fields.
HAITIANS
According to the 1981 Census, of the black/Caribbean immigrants to Canada, 14 per
cent, (i.e., 26,085) were born in Haiti; these are concentrated in Montreal, which
was already home to 23,685 Haitians, comprising 56 per cent of the city's
black/Caribbean population.
The unemployment rate among black/Caribbean immigrants to Canada is higher
than the national average (36). The greatest difference is between male groups:
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unemployment for black/Caribbean men is 7.2 per cent; national average 6.5 per cent.
The Census elaborates that the unemployment rate for adults of black/Caribbean
origin in Montreal was 15.4 per cent, about twice the rate of unemployment for
Montreal. Given that most of Canada's Haitians live in Montreal, and that 56 per cent
of Montreal's black/Caribbean people are from Haiti, the fact that unemployment
among Montreal's black/Caribbean people is substantially higher than that for the
city average, the national average and even the national black/Caribbean average
suggests it will be interesting to learn more &bout Haitians, especially since statistics
for them are so unusual.
The process of interviewing entrepreneurs who had immigrated from Haiti was
greatly facilitated when the initial contact was carried out in person. Of the five
successfully interviewed, three were first contacted by telephone. Their initial response
was to not comply with the request for information. They were unwilling to commit
to an interview over the phone, and all three stated that they were simply too busy
and not interested to pursue the conversation. Their reluctance to comply was appeased
when they were assured that the endeavour was in their best interests. The two entre-
preneurs who were contacted in person demonstrated a significantly lower level of
resistance when asked to participate in the interview. In all five cases, the process
was initiated by discussing the individual's establishment and difficulties encountered
in owning a business. The respondents demonstrated a willingness to participate in
the process when the interviewer engaged them in a personal conversation prior to
commencing the actual interview.
There is a large concentration of Haitians in Montreal's East End. Their presence
within the community, however, is restricted to their establishment's physical location.
Although they acknowledged the existence of other Haitians in the vicinity, all five
respondents refused to provide their names as a personal reference with which to
contact other Haitians, claiming their ties to the Haitian population were limited to
their customer base.
Of the five Haitian entrepreneurs who completed interviews, four were male and
one was female; the youngest male was 31 and the oldest 45. The female entrepreneur
was in her early 50s. Only one was in business with his wife (who immigrated to Canada
from the West Indies); she maintained the financial records. The female entrepreneur
operated in a partnership with her brother and did not involve her husband in running
the business. Four of the respondents had basic secondary education; one had pursued
a college degree.
19
The sample of Haitian entrepreneurs operated businesses in various sectors. Two
of the respondents had establishments in the clothing industry. One operated a retail
outlet catering to both men and women; the other, also a retail outlet, sold only men's
clothing and offered a tailoring service. The three other entrepreneurs within the
sample respectively operated an insurance firm, hair salon and grocery store.
All stated that they had not envisioned starting their own businesses when
immigrating to Canada. They did not come from entrepreneurial families and, in
all five cases, the stated reason for having created a business was to gain independence
and utilize their skills and expertise. The female entrepreneur, when asked why she
had gone into business for herself, stated that she has always wanted to work with
her brother. They got along well and, although she had not originally intended to
create a business when immigrating to Canada, had always felt that they would
eventually work together. The decision to open a grocery store was, in her opinion,
a viable option; "everyone has to eat".
All respondents stated that they had encountered a great deal of difficulty in
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negotiating a loan with a financial institution. One in particular felt that he had been
the victim of discrimination in that the bank manager would not consider him as
a potential client. The entrepreneur considered the manager's actions as discriminatory
behaviour and could secure a loan only after approaching the vice president of the
said institution. All five respondents had provided 100 per cent of the start-up costs
out of their personal savings. The tailor had invested $35,000 of his own savings;
the proprietor of the hair salon, $25,000; and the other three entrepreneurs had
contributed an average of $5,000 of their savings.
The five catered to a predominantly Haitian clientele. The sample had strong
ties with the Haitian community in that they stated their desire to provide a product
or service to other members of their ethnic group. This suggested the existence of
an ethnic enclave, as discussed by Aldrich, Jones and McEvoy (37), Auster and
Aldrich (38), Palmer (39) and Wong (40).
The entrepreneurs within the sample demonstrated business sense in that they saw
an opportunity within their respective niches in the marketplace and created a business
to fulfill that need. Of the five interviewed, two stated that the most difficult task they
encountered in their endeavour to create the business was to obtain proper financing.
In essence, only one of the entrepreneurs had secured a loan with a financial institution.
One respondent who operates two insurance firms had initially encountered difficulties
in meeting his financial and business obligations. He took on a partner and subse-
quently created a second business which he operated on his own. Two others stated
that their most difficult task in starting the business was to get accustomed to the
environment and provide a product and service that would satisfy the seemingly diffi-
cult clientele. All but two of the sample mentioned a relatively easy task in undertaking
the creation of their business venture. They had a facility in selling the product or
service and possessed the expertise to conduct business in their chosen domains.
Three of the five respondents were sole proprietors of their respective businesses.
One of these individuals had originally gone into business with two associates (also
Haitian), but had later terminated the partnership. He had requested their assistance
in financing the venture but, when their physical contribution to the business had
diminished to a minimum, the respondent repurchased their shares in the venture.
He maintained that he could run the business only if he had complete control over
its operation. Of the two respondents who were in a partnership, one was in business
with a family member, the other with a Canadian. The latter operated two insurance
firms (covering different segments of the market) and the partner maintained a 25 per
cent share of one of the firms.
20
Within the sample, two of the entrepreneurs had previously operated another
business. They had both been involved in running a dealership. They had since left
these operations and concentrated their efforts in promoting their current lines of
business in insurance and hair dressing.
Four of the five respondents had turned to their spouses, family or friends for
advice when preparing to open their business venture. They received a great deal of
support and in some cases, financial assistance. Only one of the entrepreneurs had
decided to undertake his venture alone. He did not seek any advice from family or
friends. Three of the respondents consulted an accountant, one sought legal advice,
and two approached their bank managers for financial assistance. The last did not
meet with success. The bank managers provided them only with advice. None of the
sample entrepreneurs had approached government agencies.
A question arises at this point in the study regarding these individuals' awareness
of government programs in existence that assist entrepreneurs in starting a business.
Consideration should also be taken to evaluate their knowledge regarding government
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and private institutions that could provide financial assistance and advice to small
and medium-size businesses.
The majority undertook the endeavour to start the new venture without any
financial or legal assistance. Although the five respondents stated that they had
encountered difficulty in obtaining any financial assistance, it would appear that they
may not have been informed of the services available to the new entrepreneur. Be
that as it may, these businesses have been in existence for an average of five years,
all but one are declaring a profit and all five entrepreneurs have stated their satisfaction
in running their own enterprises.
Of the five respondents, only two had envisioned starting their own businesses
when immigrating to Canada. In Haitian culture, entrepreneurship is not a most
respected or desired occupation. In the case of the Haitians in Montreal, there is
empirical evidence to support Hagen's (27) position.
INDIANS
The 1986 Census reveals 43 per cent of immigrants to Canada come from Asia, among
them many from India; these Indians are included in this study. On making initial
contact, considerable effort was made to convince these individuals that the
information they would provide would be kept in strictest confidence and that their
names and places of business would not be mentioned within the study. With this
said, four of the entrepreneurs who finally completed usable interviews had previously
stated that they were not interested in complying with our request and abruptly
terminated the conversation. Those who did eventually agree to take part in the study
continued to display a great deal of hesitation and skepticism throughout the interview.
All interviews with Indian entrepreneurs were conducted in English, perhaps a
methodological drawback, considering 48 per cent of immigrants to Canada from
South Asia indicate Punjabi as mother tongue- even among Canadian-born people
identifying themselves as Indo-Pakistani, 20 per cent indicated Punjabi as mother
tongue (36, 82).
Respondents were reluctant to reveal any financial data pertaining to their
businesses. In effect, even after having been told that the study was an academic
endeavour, their suspicions continued to manifest themselves throughout the process.
A number of respondents interrupted the interview on several occasions to ask why
and what purpose could justify asking such personal questions.
21
In only a few cases were the respondents not able to provide some of the required
data. Although they were the proprietors of their own establishments, they were not
familiar with all aspects of the business. Their associate(s), usually family, "would
know more", the researcher was told. When asked to either obtain the information
or permit the researcher to contact the associate, the respondent's typical response
was "Oh no. They will not think it is right." In effect, these respondents had never
felt at ease in submitting to a complete interview.
It was finally possible to convince six entrepreneurs of Indian ethnicity to
complete the interviews. The Indian entrepreneurs interviewed were from different
religious denominations. Three were Hindu (one had immigrated from Kenya), two
were Sikh and one Christian. All six respondents were male; the youngest was 39
and the oldest 54. One had a Master of Science degree, one a Master's degree in
Business Administration, two had Bachelor degrees in the Arts, and two had college
certificates. Most respondents had parents with minimal or no education. Only one
involved had a parent who had undergone training (in police technology) to pursue
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his career.
Some of the entrepreneurs in our sample had family members who at one stage
of their lives had owned or are still operating a business. Two of our respondents
had entrepreneurial parents, and four out of the six had brothers who were or are
still operating their respective enterprises. One of the respondent's brothers had
established and are still operating (in India) several businesses (petroleum transport,
the distribution of automotive spare parts, a gas station and sawmill). Prior to
immigrating to Canada, he was actively involved in running these family businesses.
Another respondent had four brothers residing in Kenya, Toronto and Montreal who
were importers; another had a brother conducting business within his own financial
institution; and yet another respondent's brother, residing in Oakland, Ontario,
manufactured gears for the automotive industry. This was of particular interest
because in Canada the automotive sector is largely associated with big business; in
India, however, government regulation reserves the manufacturing of automobile
components to small businesses and in some cases to medium-size businesses.
The businesses created (of which two were initially purchased) could be classified
in two categories. The first was the one of firms providing a specific service to the
Indian community. Two of the entrepreneurs in this category were Hindu, one was
Christian. These respondents were respectively owners of a travel agency, an insurance
firm and printing company. The printing company required the largest capital
investment: $15,000. The insurance firm required an initial investment of $500, and
the travel agency was a going concern. The respondent refused to disclose the agency's
purchase price. The entrepreneurs in this category were 54, 42 and 39 years old.
Two out of the three respondents had respectively completed graduate and post-
graduate studies; the other had completed collegiate studies. Two of the three had
previous experience in their chosen domain, the third had been a teacher for a number
of years prior to establishing his (insurance) firm which in his words, "was a good
opportunity". Two of the respondents felt that their experience was their source of
motivation in establishing their respective enterprises. The third sought an opportunity
to fulfill a need within his niche in the marketplace.
The second category consists of businesses that cannot be classified when dealing
with such a small sample: one bakery, one manufacturer and one importer/distributor.
Two of the entrepreneurs in this category were Sikh, one is Hindu. The oldest was
54 years old, the younger two were 42. They are also fairly well-educated. As in the
first category, two had respectively obtained graduate and post-graduate degrees, and
one had a collegiate certificate. Some of these businesses required a rather large capital
22
investment. The importer outlaid an initial investment of $7,000. He obtained
$5-million from the bank after a year in operation. The manufacturer provided the
initial investment of $250,000 from his own savings. One respondent who operated
the bakery would not disclose the amount of his initial investment. The justification
given for the larger initial outlay on the part of two of the enterprises within this
category was that the manufacturer was capital-intensive and the importer conducted
his business on a cash basis. Hence, their need for a larger capital investment than
that which was disbursed by the respondents in the first category.
Two of the entrepreneurs expressed their desire for autonomy in owning their
own businesses. They had previous experience and connections within their respective
fields and one in particular stated that in creating his enterprise, he felt that he could
improve upon his quality of life and get "peace" within himself. The third respondent
had always been an entrepreneur. It would appear that he had had numerous years
of experience in establishing and managing his own businesses. He successfully
operated, in a partnership with his brothers, several enterprises within various sectors
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of the Indian economy. The entrepreneur had envisioned owning his own business
when immigrating to Canada. When asked why he had decided to purchase the bakery,
he replied that "it was easy to run" and simply "a change of pace".
Two of the entrepreneurs in our sample employed people from their own ethnic
group. The majority of these employees were from different religious denominations.
These entrepreneurs provide a specific service to a predominantly Indian clientele
and, therefore, felt that knowledge of the language and customs was essential. They
insisted that in some part, their organizations' success is contingent on the employees'
ability to serve and adapt to their clientele. The four other respondents in our sample
stated that they did not have a preference in hiring people from their own ethnic group.
A number of our sample entrepreneurs sought professional advice. Four spoke
with an accountant, two sought legal advice and, of the two respondents who consulted
their bank manager, only one regarded the manager's contribution as useful. Only one
respondent approached a government agency for assistance in establishing his business.
All six respondents acknowledged difficulties in running their own enterprises.
Their comments and concerns pertained in most part to: long hours, difficulties
encountered in drumming up new business, obtaining proper financing, training
personnel and capacity management. All six respondents were, however, satisfied
with their chosen endeavour and would continue to run their own business. One of
the entrepreneurs in our sample expressed his desire to expand on his existing customer
base. His service is provided to a 20 per cent Canadian and 80 per cent ethnic (Indian
subcontinent) market. He plans to broaden his scope by offering a more diversified
service to capture a larger share of the Canadian market. Another respondent felt
that his organization would have been more profitable in the US. As an importer,
he felt that his firm would have prospered within the larger and more "lucrative"
US market.
The entrepreneurs in this study had operated their respective businesses for an
average of 12.5 years. The youngest enterprise had been in existence for four years,
and the longest one in operation had been in existence for 17 years. Only one of the
respondents had possibly encountered discriminatory behaviour when conducting
business. He cited cases in which the loss of several contracts might have been
attributed to his ethnic background. Nevertheless, all of our sample entrepreneurs
were satisfied with their chosen domain and, although only half of the respondents
had originally intended to create a business for themselves when immigrating to
Canada, their experiences in pursuing this endeavour had been extremely challenging
and rewarding.
23
ITALIANS
Of the 871,695 Canadians who reported themselves as having Italian cultural origins
in the 1981 Census, 54 per cent were Canadian-born. The 1986 Census indicated
1,006,920 persons of Italian origin. Toronto is home to half-a-million persons of
Italian origin, Montreal to 323,395, and Vancouver to 40,425. Of those who
immigrated to Canada, 43 per cent came as youths, 50 per cent between the ages
of 20 and 40, and only 7 per cent over 45. Of the immigrants, 378,250, representing
94 per cent, were born in Italy; 84 per cent of the immigration took place between
1950 and 1969.
Sixty per cent of them listed Italian as their first language; 37 per cent English
and 3 per cent French. In Montreal, 76 per cent indicate Italian as mother tongue;
in Toronto 67 per cent and in Vancouver 47 per cent. This is relevant to the discussion
of networks below - the Italians have a strong network in Montreal and are less
assimilated than in Toronto, even though their population is greater in Toronto.
The proportion of people of Italian origin in the labour force was greater (82 per
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cent for men; 56 per cent for women) than the Canadian average (78 per cent for
men; 52 per cent for women). While unemployment in Canada was 7.4 per cent
(6.5 per cent for men; 8.7 per cent for women), only 5.5 per cent of those of Italian
origin were unemployed (men 4.5 per cent; women 7.1 per cent). Italians born outside
Canada had an unemployment rate of 4.5 per cent, while ethnic Italians born in
Canada had an unemployment rate of 6.9 per cent.
Eighteen per cent worked in machine assembly and product fabrication, almost
twice the national average. The manufacturing industry employed 26 per cent of ethnic
Italians in Canada, construction 18 per cent, services 18 per cent, trade 18 per cent,
transportation and communications 6 per cent, finance and real estate 5 per cent.
Average income of Italians born outside Canada was $11,440, lower than those who
immigrated as children ($14, 194) or those who immigrated as adults ($13,091).
Over one-third of Canadians of Italian origin reported they had minimal
education, compared with a national average of one out of five. Those born in Canada
had considerably more education than the immigrants. Only 8 per cent of the
Canadian-born Italians did not progress beyond ninth grade, compared to 65 per
cent of adult immigrants. Self-employed Italians made up 4 per cent of the total self-
employed in Canada.
Of the three ethnic groups investigated in this study, the Italian owner /managers
were the most co-operative. They were given the choice to be interviewed in English,
French or Italian. Four out of five chose English; one out of five selected French.
Yet, in each case, the individual eventually opened up in Italian.
In the original sample of 25 Italian entrepreneurs who were approached, 21 were
born in Italy. Of the others, all were ethnic Italian, but one was born in the former
Italian colony, Libya; one was from Malta, one from Ethiopia, and the youngest,
born in 1958, was first-generation Canadian, his parents having emigrated from Italy
in 1952. He won third prize in the Ace Young Entrepreneurs Competition.
Of the 24 ethnic Italians who immigrated to Canada, 23 arrived in Canada
between 1951 and 1953. The one who was born in Libya went to Europe to escape
hostile Arab nationalism, resided in Italy during the early fifties, and then decided
to come to Canada; 24 of the entrepreneurs interviewed were Catholic.
Despite relative co-operation from the sample of Italian entrepreneurs, the
questionnaire being eight pages long in English, (in French nine pages long) involving
personal questions, it was possible to complete only five interviews despite the larger
number of entrepreneurs originally indicating a willingness to participate. The analysis
below is based on the five completed questionnaires.
24
All of the respondents who immigrated to Canada from Italy - all males -
became owner/managers three to seven years following arrival in Canada. As financial
commitments grew, each business became incorporated.
The youngest respondent, born in 1958 to parents having immigrated in 1952,
founded his new venture in 1987. He was the only one with higher education and
the only one still single - the others were married and had children. As a physical-
education teacher, he invented a sporting aid and now sells it.
The respondent born in 1946 arrived in Canada in 1955 and launched a new
venture in insurance, in 1961. The other founder of a new venture was born in 1937,
creating an electrical fixture firm in 195 5.
The eldest respondents, one born in 1930, arriving in Canada in 1951, and the
other born in 1935 and immigrating in 1953, purchased existing businesses in 1956
and 1958 respectively. Both of these purchased the businesses in which they had been
working: one a fruit store, the other a publishing company. The publisher had worked
as editor of a newspaper since 1954. In 1958, he bought the newspaper firm and
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25
the insurance business obtained moral support from his wife and no other assistance
except from a lawyer incorporating his operation for $1 ,000. The sculptor consulted
only an accountant when launching his new venture. He described the cost as very
reasonable and the consultation most useful, explaining that he approached a
qualified accountant and so could not go wrong.
The winner of an Ace award found government assistance very helpful,
including a market study which the Federal Business Development Bank did at a cost
to him of $1,000. He says SBIC was also very useful. He appreciated low-cost rent
and free use of equipment as well as ongoing consultation from management
specialists, a service provided free from his incubator. Most difficult in his start-up,
he reported, was financing, production and obtaining confidence from clients.
Easiest, he said, was marketing, selling and meeting people.
Other respondents cited the following as difficult: establishing a market share;
communication in English and French as well as Italian; and reaching the first
$!-million of sales. One said nothing was easy; two others mentioned that operating
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with other Italians facilitated business; the sculptor said that although the
beginnings were tough (1955/1960), he made sales of $3-million in 1970, and
$10-million thereafter.
All the shares of these "Italian" businesses were owned by people identifying
themselves as being of Italian ethnic origin. In most cases, one man owns 100 per
cent. One entrepreneur had two partners to replace him while he travelled six
months of the year. Another, the Canadian-born entrepreneur, explained 20 per
cent of the equity belonged to other members of his family, and that the reason was
to share costs. In his case, his set-up costs were $100,000, sourced as follows: 20 per
cent personal savings; 20 per cent family; 35 per cent bank; 25 per cent government
subsidy. He employed one secretary 40 hours per week. Despite first-year sales of
$250,000, his profit is nil.
The Italian-born entrepreneurs needed substantially less start-up capital. The
sculptor (with sales of $10,000,000 each of the past five years), declared profits of
$500,000, $750,000 and $1,000,000 in recent years. His start-up capital was $350 of
personal savings. Today, 110 people work for him, half of them Italian, and the
other half French-Canadian. He said, "Les Italiens travailent plus fort que les
fran9ais-canadiens." Another entrepreneur justified hiring mostly Italians to please
his Italian market segment.
Indeed, there appeared to be affinity for one another within a group. All the
Italian respondents belonged to an association of business people; most of them also
belonged to an ethnic organization. General consensus was that discrimination had
decreased in recent years. Some indicated a willingness to help others start out
regardless of ethnic origin, others said they would not. Only one actually did help
others.
26
within close proximity of others having the same ethnic origin; this might facilitate
access, allowing immigrants to call on one another, benefiting from such contacts.
Networking, calling upon a web of contacts for information, support and/ or
assistance, is indeed a fundamental tool which should not be ignored (47). It is
described as an invaluable system, by Fleming who finds that "entrepreneurs seek
their own kind (48)." In Australia, he discovered among business owners a strong
barter system providing services within the network, tax free. He found that less
than 4 per cent listed accountants as a source of knowledge; bankers helped 2 per
cent; lawyers less than I per cent.
In this pilot study of immigrant entrepreneurs in Montreal, entrepreneurs
seemed to rely on themselves, a mentor, family and their ethnic network more than
on accountants or lawyers. None of the owner/managers spoke enthusiastically
about either an accountant or lawyer, except one Italian who was preoccupied with
his accountant's religion.
The reliance on one's intraethnic network facilitates exchange of information
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in one's native tongue; the network provides a market, employees and informal
financing, as confirmed by the interviews. Each of the immigrants in this study
launched a business with little start-up capital; only the Canadian-born Italian
inventor needed $100,000, and only he relied on a bank as well as his network. As
concluded by Hisrich and Brush (34), support systems and a mentor seem to be of
great help to the minority entrepreneur.
In summary, the immigrant who has a need beyond having a normal job
(perhaps because of a cultural responsibility for an extended family rather than a
nuclear family) may resort to entrepreneurship, and the ethnic network contributes
to his/her success providing: (a) information and assistance; (b) capital; and
(c) manpower.
The immigrant contributes back to the network by providing: (a) a product or
service to the community; (b) jobs; and (c) information and assistance to other
members of the network.
27
To some ethnic groups, entrepreneurship is (a) culturally desirable. To other
groups , it is (b) a means of coping with marginality.
In the first instance, where entrepreneurship is (a) culturally desirable, people's
values encourage venture creation. Different groups have a culture which supports
small-business ownership for religious, ethical or other reasons. Individuals coming
from such cultures may be more likely to establish a business than others with non-
entrepreneurial cultures.
People with non-entrepreneurial cultures may also become entrepreneurs if
sociodemographic factors push them that way. They become entrepreneurs as (b) a
means of coping with marginality. The Haitians in Montreal generally valued a job
in the civil service more than self-employment. However, those who are unsuccessful
at obtaining white collar employment may become entrepreneurs more out of
necessity than desire (i.e. necessity breeds entrepreneurship). Empirical findings
suggest that they are entrepreneurs not as an expression of cultural values but,
rather, for survival.
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