Social and human capital in immigrant adaptation

Abstract Purpose: With the resurgence of immigration to North America in the past three decades, research on immigrant adaptation and the attendant issues of assimilation has burgeoned. A prevailing assumption of much of this research is that social capital is a vital resource enabling immigrants to find their economic and social niches in the host society. In a word, social capital is a key factor in the immigrant adaptation process. This assumption has been especially prominent in research focusing on one specific subset of immigrants: entrepreneurs. Social capital in the form of ethnic networks and family ties is assumed to function critically in the establishment and operation of immigrant-owned businesses. This paper argues that although the formation and expenditure of social capital may typify the experiences of many or even most immigrant entrepreneurs, some enter the host society with sufficient human and/or financial capital that enables them to forego the utilization of social capital in the adaptation process. Methods: To demonstrate, I draw upon in-depth interviews conducted with 70 immigrant entrepreneurs in the province of Ontario, Canada between 1993 and 1995. All interviewees entered Canada under the auspices of the Canadian Business Immigration Program, a federal program designed to attract immigrants with demonstrable business and managerial skills that presumably will lead to the establishment of a firm and thus to the subsequent creation of jobs and economic activity. A formal requirement of their entrance, then, is the possession of proven business skills, a critical form of human capital that facilitates successful economic adaptation in the host society. Forms of social capital are described and their applicability to the adaptation experiences of the interviewees is analyzed. What is found among these business immigrants is a minimal reliance on social capital in establishing and operating their firms. In securing investment capital, finding a work force, and acquiring information, ethnic and family ties, the most common forms of social capital for immigrants generally and for immigrant entrepreneurs in particular, do not play a major role. Solidarity with co-ethnics and the use of family labor, so common among conventional immigrant entrepreneurs, are not of significant import in the economic adaptation of these business immigrants. Moreover, ties to coethnics are only minimally significant in patterns of social adaptation as well. Results: It is concluded that immigrants entering the host society with pre-migration intentions of business ownership possess sufficient human capital that enables them to disregard the formation and utilization of social capital in their economic and social adaptation. In this they differ from immigrants who take a more conventional path to business ownership, that is, laboring in the mainstream work force following entrance into the host society and gradually accumulating resources that lead to entrepreneurship. For business immigrants with children, however, social capital does play a key role in the decision to immigrate. Business immigrants are prepared to abandon successful firms in the origin society in order to provide their children with a more promising socioeconomic environment, including above all what is viewed as superior opportunities for education. Hence, the social capital that inheres in close-knit family arrangements provides incentive for parents to accept losses in financial capital in order to increase their children’s human capital. Conclusion: The context of the receiving society may also be seen as a form of social capital for Canadian business immigrants. All declare that quality of life, rather than the lure of financial success, serves as their major incentive to immigrate to Canada. Moreover, the fact that they enter a society that officially proclaims its multicultural character offers them the opportunity to become Canadian but to retain their ethnicity. The source of social capital in this case, then, is not the ethnic community, but the broader society.