Exploring the Drivers of Entrepreneurship in Indian Migrants to New Zealand. An enquiry into the personal, labour market and economic factors prompting entrepreneurial behaviours

This study examines the factors prompting Indian immigrants to become entrepreneurs in New Zealand. The study defines an entrepreneur as someone who has a business and employs at least one employee. Using this definition, and informed by census data it employs analysis of in-depth interviews with 11 Indian migrant entrepreneurs in Auckland. The participants were chosen through a purposive sampling method. Qualitative analysis was carried out using Nvivo data management software. The study discovered several factors relating to personal experiences, labour market trends and economic pressures which led to the participants taking an entrepreneurial path. Most of the motivating factors experienced by these Indian immigrant entrepreneurs are similar to entrepreneurs in general and are both positive and negative. Introduction New Zealand has been a destination for migrants since the first Polynesian settlers arrived about 1000 years ago. In 2009 thirty-seven percent of the people (i.e. more than a third of Auckland residents) were born overseas (Statistics New Zealand, 2009). There was an increase of 68.2% in this nation’s Indian population between 2001 at the last official census count in 2006 (Statistics New Zealand, 2006), making the Indian population, at 104, 583 second only to Chinese among Asian ethnic groups (Statistics New Zealand, 2006). Many Indian migrants run businesses, especially in retail, grocery and fast food. While research has been carried out on the economic, social and environmental impact of immigration (Singer, 1997; Poot and Cochrane, 2004), little attention has been given to the phenomenon of immigrant entrepreneurship in New Zealand. Given that the 2006 national census data shows 17.4% of Indians in the total labour force were self-employed (Statistics New Zealand, 2006), the primary aim of this study was to investigate the motivations held by people in this category to pursue entrepreneurship and become self-employed in Auckland. Literature Review The definition of an entrepreneur used in this enquiry involved the meeting of two criteria. The first being that the person was a business founder, a common definition used in other entrepreneurship research (Hamilton, 1987; Shane, Kolvereid and Westhead, 1991), and the second that an entrepreneur is an employer of others, thus distinguishing the sole-trader or the self-employed (without employees) from an entrepreneur. Most immigrants leave their home to search for a better life for themselves and their children (Singh and Denoble, 2004). Some find employment in the general labour market, depending on the education and language skills, or in the ethnic labour market (Portes, Guarnizo and Haller, 2002). Others pursue selfemployment and follow a path of entrepreneurship to economic mobility. Watson, Keasey and Baker (2000) argue that, by starting a business, they create their own job, which helps them avoid the barriers they may face in looking for a job in the labour market. Immigrant entrepreneurship is an important research topic from many perspectives, but it has taken time for this view to become widespread (Kloosterman and Rath, 2004). This recognition was first observed in United States, and later in the United Kingdom (Kloosterman and Rath, 2004). By 2004, the literature on immigrant entrepreneurship consisted of more than 1700 books, reports, monographs, chapters and journal articles and special issues (Kloosterman and Rath, 2004). Theories of Immigrant Entrepreneurship Several conceptual theories have been developed on immigrant entrepreneurship. Opportunity for a new immigrant can be found in locations where there are already businesses set up by the same ethnic group. This has been theorised as ‘ethnic enclave theory’ (Altinay, 2008). The second theoretical approach is the ‘middleman minority theory’ (Min and Bozorgmehr, 2003). This refers to the role a minority group has played in becoming a middleman between the immigrant market and suppliers of the dominant group (Bonacich, 1987; Min and Bozorgmehr, 2003). The third theory is called labour disadvantage theory, where immigrants face disadvantages in the primary labour markets, compared to the native-born people (Min and Bozorgmehr, 2003). According to this theory, there is no other option for some immigrants but to become self-employed for their economic survival. The fourth theory is cultural theory which was developed out of the field of sociology (Volery, 2007). Cultural theory suggests that ethnic and immigrant groups have culturally determined features such as commitment to hard work, living in austerity, membership in a strong ethnic community, accepting social value patterns and orientation towards self-employment (Masurel, Nijkamp and Vindigni, 2004). These features provide an ethnic resource that facilitates and encourages entrepreneurship and supports the immigrant entrepreneur (Fregetto, 2004). The fifth theory developed is called opportunity structure where ethnic resources such as family members, relatives and friends can provide an opportunity structure for a new migrant (Min and Bozorgmehr, 2003). Motivations of Migrants The main motivating factors for entrepreneurship extant in the cited literature for which empirical results are available and appear most frequently are as follows; independence, money, work-related factors, family-related factors, need for challenge, and opportunity. In research on entrepreneurial motivation, a distinction is also made between “pull” and “push” factors (Storey, 1994). Pull factors suggest positive motivations like a desire to be independent, have control over one’s future and increased social status (Morrison, 2001; Cassar, 2007). Push factors suggest negative experiences like the inability to find a job in the mainstream sector, underemployment, facing discrimination in the labour market, underpayment and possibility of redundancy (Basu and Goswami, 1999; Morrison, 2001; Dobrev and Barnett, 2005). Research findings suggest both push and pull factors to be important motivating factors for entrepreneurship (Kirkwood, 2009). There has been little research done on the motivation of immigrants to become self-employed in New Zealand. Research has been done on discrimination faced by immigrants in the labour market (Butcher, Spoonley and Trlin, 2006), but studies related to the phenomenon of immigrant entrepreneurship and especially the reasons for entrepreneurship are lacking. The researchers have reviewed research on the labour market experiences of migrants which will help us relate to the “Labour disadvantage theory’’ and understand the phenomenon of immigrant entrepreneurship in New Zealand context. This study therefore focuses on exploring the motivational factors of Indian migrants in Auckland. To this end the following research question was investigated: What are the dominant variables that prompt entrepreneurial behaviours on the part of Indian immigrants to New Zealand? Methodology There are two dominant research paradigms: positivistic and phenomenological. Studies have been conducted on entrepreneurial motivations based on a positivist paradigm (Kirkwood and Campbell-Hunt, 2007) and observed from a psychological perspective (Segal, Borgia and Schoenfeld, 2005). The motives for becoming entrepreneurs are complex and a checklist approach cannot “capture the complexity of the decision process” (Stevenson, 1990, p.442). These concerns make the phenomenological paradigm more attractive and better suited to understanding a complex phenomenon (Kirkwood, 2009). Qualitative approaches are widely used and research is often conducted using the phenomenological paradigm (Perren and Ram, 2004). Such a paradigm is more suited to understanding the motivation to become an entrepreneur in this study, which is consistent with other studies that have been done on entrepreneurship motivation (Kirkwood, 2009). Sample Selection, Data Collection and Data Analysis This study is on Indian migrants who fell under the skilled migrant category of Immigration in New Zealand and are self-employed, so standard probability-sampling methods would not succeed in locating this section of the Indian population. Purposive sampling was adopted in this study because it allowed the researcher to use his judgement in selecting participants who were best able to answer the research questions and meet the research objective (Saunders et al., 2009). The primary data was collected by semi-structured face-to-face interviews with the entrepreneurs themselves. Total of 11 interviews were conducted for this research. In this study, the researchers considered general analytical procedure to deal with qualitative data. Miles and Huberman (1994) define general analytical procedure as three linked processes: data reduction; data display; and conclusion drawing. The data was analysed using thematic content analysis focusing on investigating recurring answers in the data obtained (Miles and Huberman, 1994). Themes were chosen according to recurring answers for the questions provided. The software package Nvivo was used for data management (Richards, 2000). To ensure the research met ethical standards (Tolich and Davidson, 1999), ethics committee approval was obtained, participation in this study was voluntary, and participants’ anonymity was preserved. The following factors were investigated using the methodology outlined: motivation, labour market experience prior to entrepreneurship, the intention the participants had to open a business prior to migration and their previous skills and experience. Results of the Study The entrepreneurs in this study demonstrated six broad motivational variables Money, flexibility, gap in the market, make a living, necessary change and negative experience in the labour market. Nine participants mentioned money as one of the important motivating factor. Ten participants reported negative experience in the labour market as one of the factors. Eight