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The salience of ethnic identity in entrepreneurship: an ethnic strategies of business action framework

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Abstract

Ethnicity not only shapes pathways to entry into entrepreneurship but also plays an important role in the organizing structure of the business. Previous research on ethnic entrepreneurs has focused on niche markets, their coethnic labor supply, and the spatial concentration of businesses (i.e., enclaves), overlooking the role that ethnicity plays in business strategies more broadly. I draw on 65 in-depth interviews and participant observations to examine how business owners make sense of their ethnoracial identity in the context of their business orientation and market reach. I propose an ethnic strategies of business action typology of the ways in which an ethnic identity is strategically invoked in the pursuit of profit. I find that ethnic strategies can yield benefits as a business strategy but choosing when and how to leverage an ethnic identity is largely reserved for entrepreneurs who have obtained higher education, the later generations, and those operating in professional industries. These strategies are intricately situated within the context of intersectionality and the larger social structure. Nevertheless, this expanded view of an ethnic economy accounts for socioeconomic diversity and a growing minority middle class largely unaccounted for in previous theorization. Understanding the diverse orientation of ethnic business owners provides empirical leverage to the affirming ethnic strategies in the repertoire of the minority culture of mobility.

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Notes

  1. Scholars have long detailed and debated the definitional and conceptual terms “ethnicity” and “race” ranging from a departure away from groupism, or bounded groups as fundamental units (Brubaker 2004); sociopolitical and historical projects (Omi and Winant 1994); or as essential social facts (Bonilla-Silva 1999). It is not the aim of this paper to weigh in on these debates. In practice, ethnicity has been thought of through national and cultural boundaries, but “Latino/Hispanic” and “Asian” are panethnic labels that encompass members of many ethnoracial and national-origin groups. I take up “ethnic” groups through an interpretive constructionist approach. That is, terms are taken up individually by each respondent and defined by their lived experience.

  2. Given the expansive characteristics of the Latino category, it is interchangeably referred to as an ethnoracial group in this paper.

  3. I define microbusinesses as companies with annual revenue of less than $250,000.

  4. Scaled businesses are those that are generating at least $1 million in annual revenue, establishing a proof of concept in their business strategy.

  5. All entrepreneurs were provided the option of having the interview in English or Spanish. None of the scaled business owners opted to do so although Spanish may have been peppered throughout the interview; one-third of the microbusiness interviews were in Spanish.

  6. Five microbusiness owners self-disclosed undocumented status.

  7. Most recently, immigrant waves have come from Central America but the dynamism of an existing panethnic group speaks to the expansive role of blurred boundary making.

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    Marlene Orozco

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Orozco, M. The salience of ethnic identity in entrepreneurship: an ethnic strategies of business action framework. Small Bus Econ 59, 243–268 (2022). https://doi.org/10.1007/s11187-021-00532-2

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