Global Entrepreneurship Global Entrepreneurship and Transnationalismand Transnationalism

ByByIvan Light Ivan Light

Professor of SociologyProfessor of SociologyUniversity of California, Los AngelesUniversity of California, Los Angeles

light@soc.ucla.edu light@soc.ucla.edu

Здравствуйте!Здравствуйте!

Hello!Hello!

My research concerns the role of migrants in My research concerns the role of migrants in international business, now and in the international business, now and in the past. past.

I begin with the past. I begin with the past.

Once diasporas were . . .Once diasporas were . . .

Ethno-national communities scattered Ethno-national communities scattered around the globe in continuous, long-term around the globe in continuous, long-term

contact with one another. contact with one another.

Hub and spokes organization with the Hub and spokes organization with the homeland as hubhomeland as hub

Rare even then Rare even then

DiasporasDiasporas

Diasporas are communicating international Diasporas are communicating international settlements organized around a putative or settlements organized around a putative or real homeland on a hub and spoke basis.real homeland on a hub and spoke basis.

1 21 2

\ /\ /

7 -- Homeland -- 37 -- Homeland -- 3

/ | \/ | \

6 5 46 5 4

Middleman minoritiesMiddleman minorities

Historic trading peoples who undertook Historic trading peoples who undertook commercial functions wherever they commercial functions wherever they

resided. resided.

Middleman minorities were organized into Middleman minorities were organized into diasporas.diasporas.

Six ExamplesSix Examples

Exemplary middleman minoritiesExemplary middleman minorities: :

Chinese in SE AsiaChinese in SE AsiaParsees of IndiaParsees of India

Sikhs of East AfricaSikhs of East AfricaArmenians of the LevantArmenians of the Levant

Jews of Europe and North AfricaJews of Europe and North AfricaHausa of Nigeria Hausa of Nigeria

Resisting AssimilationResisting Assimilation

Immigrants assimilated. Middleman Immigrants assimilated. Middleman minorities successfully resisted minorities successfully resisted assimilation often for assimilation often for centuriescenturies. Result: . Result: they were bi-cultural or multi-cultural in they were bi-cultural or multi-cultural in mono-cultural civilizations. mono-cultural civilizations.

Retention of their ethnic culture enabled Retention of their ethnic culture enabled them to retain the diasporic structure for them to retain the diasporic structure for centuriescenturies. .

Trading DiasporasTrading Diasporas

Middleman minorities exploited the commercial Middleman minorities exploited the commercial resources that their diasporic communities resources that their diasporic communities afforded them. afforded them.

BilingualismBilingualism

Quickly perceived business opportunitiesQuickly perceived business opportunities

International social networksInternational social networks

Enforceable TrustEnforceable Trust

Business skillsBusiness skills

BilingualismBilingualism

Speaking their ethnic language as well as Speaking their ethnic language as well as the vernacular of their country of the vernacular of their country of residence, middleman minorities could residence, middleman minorities could communicate across linguistic barriers that communicate across linguistic barriers that stymied others.stymied others.

In Turkey In Peru In Turkey In Peru

Turkish > Armenian > Armenian > SpanishTurkish > Armenian > Armenian > Spanish weaver merchant merchant customerweaver merchant merchant customer

Perception of opportunitiesPerception of opportunities

Living simultaneously in two or more Living simultaneously in two or more societies, middlemen minorities readily societies, middlemen minorities readily perceived entrepreneurial opportunitiesperceived entrepreneurial opportunities for for moving goods or services from one to the moving goods or services from one to the other. other.

Benson Honig called it, “Dual habitus.” Benson Honig called it, “Dual habitus.”

Popcorn in Chinese movie theaters

Introduced by returned students

International Social NetworksInternational Social Networks

Thanks to the hub and spoke organization of Thanks to the hub and spoke organization of their diasporas, middleman minorities their diasporas, middleman minorities could readily find co-ethnic trading could readily find co-ethnic trading partners abroad. partners abroad.

Diaspora and HomelandDiaspora and Homeland

d6 - d7 - d8d6 - d7 - d8

/ \ | / \/ \ | / \

d5 --- HL --- d1d5 --- HL --- d1

\ / | \ /\ / | \ /

d4 d3 d2d4 d3 d2

Enforceable TrustEnforceable Trust

The international social networks produced The international social networks produced an international system of enforceable an international system of enforceable trust that subjected to sanctions any who trust that subjected to sanctions any who violated the presumption of honesty. violated the presumption of honesty.

Example: Example:

Jewish diamond merchants in AmsterdamJewish diamond merchants in Amsterdam..

SanctionsSanctions

Social IsolationSocial Isolation

Exclusion from the ethnic economyExclusion from the ethnic economy

Legal penaltiesLegal penalties

““The ethnic economy”The ethnic economy”

Sector of independent business owned and Sector of independent business owned and operated by co-ethnics, their unpaid family operated by co-ethnics, their unpaid family workers, and co-ethnic employees. workers, and co-ethnic employees.

Business SkillsBusiness Skills

Middleman minorities acquired advanced Middleman minorities acquired advanced business skills and passed them along to business skills and passed them along to younger generations in hands-on younger generations in hands-on apprenticeships. apprenticeships.

There weren’t any business schools thenThere weren’t any business schools then!!

Resisting assimilation Resisting assimilation

When immigrants or ethnic minorities When immigrants or ethnic minorities assimilate, they assimilate, they loselose their former their former commercial advantages:commercial advantages:

Bi- or multi-lingualismBi- or multi-lingualism

international social networks with enforceable trustinternational social networks with enforceable trust

Network – wide repository of business skillsNetwork – wide repository of business skills

advantageous perception of market opportunityadvantageous perception of market opportunity

Assimilation brings:Assimilation brings:

Mono-lingualismMono-lingualism

No international social connectionsNo international social connections

No enforceable international trustNo enforceable international trust

Mono-habitus Mono-habitus

Reduced access to ethnic business skills Reduced access to ethnic business skills

What’s transnationalism? What’s transnationalism?

It’s the modern term currently given to the It’s the modern term currently given to the people who live abroad people who live abroad andand in their in their homelands more or less simultaneously. homelands more or less simultaneously.

A recent product of: jet airplanes, electronic A recent product of: jet airplanes, electronic communications, globalizationcommunications, globalization

Transnationalism NowTransnationalism Now

Transnationalism provides today’s migrants Transnationalism provides today’s migrants with most of the same diasporic with most of the same diasporic

advantages that were once in the past advantages that were once in the past reserved to middleman minoritiesreserved to middleman minorities. .

bi-lingualismbi-lingualism

international networks based on international networks based on enforceable trust enforceable trust

advantageous perception of opportunityadvantageous perception of opportunity

Transnationalism does not Transnationalism does not provide:provide:

Centuries – old repertoire of business skills Centuries – old repertoire of business skills that can be accessed from co-ethnic that can be accessed from co-ethnic communitycommunity

Multi-generation access to these resources. Multi-generation access to these resources.

Transnationals assimilate.Transnationals assimilate.

Transnationalism’s effectTransnationalism’s effect

Transnationalism Transnationalism increases the numberincreases the number of of people in the world who have access to people in the world who have access to the diasporic advantages that were in the the diasporic advantages that were in the past restricted to middleman minorities. past restricted to middleman minorities.

Transnationalism weakens but does not Transnationalism weakens but does not suppress or replace middleman minorities. suppress or replace middleman minorities.

Transnationalism, definedTransnationalism, defined

. . . persistent, multi-cultural diasporas that . . . persistent, multi-cultural diasporas that link a an ethnic homeland with multiple link a an ethnic homeland with multiple countries of settlement. countries of settlement.

TransmigrantsTransmigrants are resident in at least two are resident in at least two societies, and active participants in all at societies, and active participants in all at the same time. the same time.

What is Encouraging What is Encouraging Transnationalism? Transnationalism?

Instantaneous electronic communicationsInstantaneous electronic communications skype, email, webskype, email, web

Jet airplanes and low faresJet airplanes and low faresHost country multiculturalismHost country multiculturalismSending country retentionismSending country retentionism dual citizenship, voting privileges for expatriatesdual citizenship, voting privileges for expatriates

Entrepreneur visasEntrepreneur visas skip immigration queuesskip immigration queues

Transnational DiasporasTransnational Diasporas

Hub and spokes structureHub and spokes structure

Bi-lingualism Bi-lingualism

International social networks International social networks

Enforceable trust Enforceable trust

ButBut transnationals transnationals lack a cultural heritage of lack a cultural heritage of business skills that middlemen had!business skills that middlemen had!

From above and belowFrom above and below

““Transnationalism from below” refers to Transnationalism from below” refers to social conditions that result in wholesale social conditions that result in wholesale production of transnationals among production of transnationals among immigrant minorities. immigrant minorities.

““Transnationalism from above” refers to Transnationalism from above” refers to state policies that encourage state policies that encourage transnationalism among migratory elites transnationalism among migratory elites esp. jumping the immigration queue esp. jumping the immigration queue

Is transnationalism eternal?Is transnationalism eternal?

Will transnationals resist assimilation for Will transnationals resist assimilation for centuries? Probably not. Middlemen did.centuries? Probably not. Middlemen did.

However, possibly globalization creates a However, possibly globalization creates a new transnational for every one who finally new transnational for every one who finally assimilates.assimilates.

If so, transnationals assimilate, but If so, transnationals assimilate, but transnationalism persists!transnationalism persists!

Assimilation Assimilation

In the past, European immigrants to the In the past, European immigrants to the USA became monolingual in English in the USA became monolingual in English in the third generation. It now takes somewhat third generation. It now takes somewhat longer for immigrants today but the longer for immigrants today but the direction of change is the same. direction of change is the same. Monolingualism is a litmus test of Monolingualism is a litmus test of assimilation. assimilation.

GlobalizationGlobalization

Globalization means the accelerated Globalization means the accelerated economic integration of previously less economic integration of previously less integrated national economies.integrated national economies.

Globalization and TransnationalismGlobalization and Transnationalism

Transnationals are well endowed to do the Transnationals are well endowed to do the work of linking and integrating economies. work of linking and integrating economies.

bi-cultural, spoke and hub organization, international bi-cultural, spoke and hub organization, international networks, enforceable trust, prompt perception of networks, enforceable trust, prompt perception of opportunity conditionsopportunity conditions

Who’s in charge?Who’s in charge?

GlobalizationGlobalization is much bigger than is much bigger than transnationalism. transnationalism.

Transnationalism is globalization’s helper; it Transnationalism is globalization’s helper; it did not singly cause globalization. did not singly cause globalization.

Transnationalism accelerates globalization.Transnationalism accelerates globalization.

The dominance of EnglishThe dominance of English

English has become the dominant language English has become the dominant language of the world in science, business, and of the world in science, business, and diplomacy. diplomacy.

English is the second largest language English is the second largest language group in the world if we count only native group in the world if we count only native speakers. speakers.

World’s largest language groupsWorld’s largest language groups

# 1 Chinese # 1 Chinese

# 2 English # 2 English

# 3 Spanish# 3 Spanish

But English passes Chinese if non-native But English passes Chinese if non-native speakers are included. speakers are included.

Consequences of English Consequences of English dominancedominance

English-speaking business people in Turkey English-speaking business people in Turkey and Peru no longer need the intermediary and Peru no longer need the intermediary help of resident Armenians in order to do help of resident Armenians in order to do business. business.

This intermediary service was an important prop of This intermediary service was an important prop of middleman minorities’ commercial advantage and its middleman minorities’ commercial advantage and its loss undermines (but does not extinguish) the loss undermines (but does not extinguish) the

commercial advantage of transnational entrepreneurs.commercial advantage of transnational entrepreneurs.

Asymmetrical Effects of English Asymmetrical Effects of English dominancedominance

In the 1990s, immigration increased the In the 1990s, immigration increased the exportsexports of both Canada and the United of both Canada and the United States without increasing their imports. States without increasing their imports.

That is, after a lag, increased immigrants That is, after a lag, increased immigrants from country A increased Canadian and from country A increased Canadian and US exports to country A without increasing US exports to country A without increasing imports from A. imports from A.

A possible explanationA possible explanation

Foreigners now speak English so they need Foreigners now speak English so they need no help from transnational immigrants no help from transnational immigrants from the USA or from Canada in order to from the USA or from Canada in order to export to Canada or the USA.export to Canada or the USA.

Speaking English, Swedes don’t need transnational Speaking English, Swedes don’t need transnational Americans in Sweden in order to export to the United Americans in Sweden in order to export to the United

States.States.

True, Swedes made some True, Swedes made some mistakesmistakes

Vacuum cleaner advertising slogan: Vacuum cleaner advertising slogan: “Nothing sucks like Electrolux.” “Nothing sucks like Electrolux.”

If you don’t understand this joke, you are not a native speaker of If you don’t understand this joke, you are not a native speaker of American English. American English.

Jens and the “pirate ship” to Copenhagen Jens and the “pirate ship” to Copenhagen

But converselyBut conversely

Mono-lingual English-speakers Mono-lingual English-speakers need the need the helphelp of resident transnationals in order to of resident transnationals in order to export to the immigrants’ homelands. export to the immigrants’ homelands.

Speaking only English, Americans need the help of Speaking only English, Americans need the help of Swedish transnationals in the US in order to export to Swedish transnationals in the US in order to export to Sweden. Swedes already speak English; they don’t need Sweden. Swedes already speak English; they don’t need American helpers to export to the USA. American helpers to export to the USA.

My friend, Sharon CMy friend, Sharon C

Sharon C. speaks no Spanish. She could Sharon C. speaks no Spanish. She could not export American cheese to Mexico not export American cheese to Mexico until she hired a Mexican American until she hired a Mexican American salesman. Now he’s her partner. salesman. Now he’s her partner.

And they are exporting cheese to Mexico in And they are exporting cheese to Mexico in Spanish.Spanish.

Transnational EntrepreneursTransnational Entrepreneurs

Transnational entrepreneurs in English-Transnational entrepreneurs in English-speaking countries enjoy enhanced speaking countries enjoy enhanced opportunities in the export trade thanks to opportunities in the export trade thanks to their bi-cultural competence.their bi-cultural competence.

It’s better to be a transnational Polish entrepreneur in It’s better to be a transnational Polish entrepreneur in Canada than a transnational Canadian entrepreneur in Canada than a transnational Canadian entrepreneur in Poland because Poles speak English, but Canadians do Poland because Poles speak English, but Canadians do not speak Polish. not speak Polish.

““The merchant speaks the The merchant speaks the customers' language”customers' language”

This ancient adage of international This ancient adage of international commerce is still true, and it implies that commerce is still true, and it implies that mono-lingual Anglophone entrepreneurs mono-lingual Anglophone entrepreneurs

need bi-lingual helpers in order to need bi-lingual helpers in order to find/build markets abroad. find/build markets abroad.

Lost in translationLost in translation

Chevrolet Nova = Chevrolet Nova = Chevrolet no vaChevrolet no va = = “Chevrolet doesn’t go” in Spanish“Chevrolet doesn’t go” in Spanish

Chevrolet sales plunged in Latin America!Chevrolet sales plunged in Latin America!

Global EnglishGlobal English

English dominance is now a structure, not a English dominance is now a structure, not a friction. A friction would impose the same friction. A friction would impose the same transaction cost in either direction. transaction cost in either direction. However, the effects of global English However, the effects of global English dominance are asymmetricaldominance are asymmetrical. .

One asymmetrical advantage One asymmetrical advantage

Native speakers of English enjoy an Native speakers of English enjoy an asymmetrical commercial advantage in asymmetrical commercial advantage in that their foreign trade negotiations are that their foreign trade negotiations are carried on in their native language. carried on in their native language.

This situation confers an asymmetrical This situation confers an asymmetrical advantage too.advantage too.

A disadvantageA disadvantage

The English-speaking countries must rely on The English-speaking countries must rely on transnational business migrants who transnational business migrants who increase their exports without increasing increase their exports without increasing their imports.their imports.

Immigration provides the linguistic skills and Immigration provides the linguistic skills and foreign social networks that enable their foreign social networks that enable their exports. exports.

Who benefits? Who benefits?

Transnational entrepreneurship does not Transnational entrepreneurship does not have identical economic consequences or have identical economic consequences or bestow equal benefits everywhere in the bestow equal benefits everywhere in the world.world.

Conclusion 1Conclusion 1

Transnational entrepreneurs Transnational entrepreneurs enhance the international trade of enhance the international trade of

all countries. all countries. bi-cultural, spoke and hub organization, bi-cultural, spoke and hub organization,

international networks, enforceable trust, prompt international networks, enforceable trust, prompt perception of opportunity conditionsperception of opportunity conditions

Conclusion 2Conclusion 2

However, the English-speaking However, the English-speaking world obtains the most benefit world obtains the most benefit from immigrant transnationalism, from immigrant transnationalism, which confers linguistic skills the which confers linguistic skills the English-speaking countries lack.English-speaking countries lack.

Looking out of the goldfish bowl is their unique challenge. Looking out of the goldfish bowl is their unique challenge.

ImplicationImplication

The case for the advantageousness of The case for the advantageousness of transnational entrepreneurship is transnational entrepreneurship is somewhatsomewhat weaker in non-English- weaker in non-English-speaking countries than in Anglophone speaking countries than in Anglophone countries. countries.

Conclusion 3Conclusion 3

Country A’s expatriates are Country B’s Country A’s expatriates are Country B’s immigrants. immigrants.

Expatriates promote a source country’s Expatriates promote a source country’s international trade. international trade.

What about emigrants? What about emigrants?

Ireland is an English – speaking country with Ireland is an English – speaking country with many expatriates abroad, and immigrants many expatriates abroad, and immigrants at home. at home.

Other English-speaking countries have Other English-speaking countries have immigrants, but Ireland also has many immigrants, but Ireland also has many expatriatesexpatriates. .

The Irish DiasporaThe Irish Diaspora

expats expatsexpats expats

\ / \ / expats ---- IRELAND ---- expatsexpats ---- IRELAND ---- expats

/ \/ \

expats expatsexpats expats

Irish ExpatriatesIrish Expatriates

Speak English and foreign languagesSpeak English and foreign languages

Understand Irish society and foreign societyUnderstand Irish society and foreign society

Enjoy enforceable trust in two locationsEnjoy enforceable trust in two locations

“ “Dual habitus” improves perception of Dual habitus” improves perception of business opportunities business opportunities

Transnationals, Transnationals, notnot middleman minority middleman minority

Immigrants in IrelandImmigrants in Ireland

The same advantages as Irish expatsThe same advantages as Irish expats

Speak English and foreign languagesSpeak English and foreign languages

Understand Irish society and foreign societyUnderstand Irish society and foreign society

Enjoy enforceable trust in two locationsEnjoy enforceable trust in two locations

“ “Dual habitus” improves perception of business Dual habitus” improves perception of business

opportunitiesopportunities

Ireland’s International TradeIreland’s International Trade

Ireland’s immigrants and expats offer a Ireland’s immigrants and expats offer a possibility for expanding merchandise and possibility for expanding merchandise and

service exports of small & medium service exports of small & medium business sector that is usually business sector that is usually

underperforming big business in underperforming big business in international trade. international trade.

ReferencesReferences

Ivan Light. “Transnational Entrepreneurs in an Ivan Light. “Transnational Entrepreneurs in an English-Speaking World.” English-Speaking World.” Die Erde Die Erde 141 nos. 1-141 nos. 1-2 (2010): 1 – 16. 2 (2010): 1 – 16.

Ivan Light. “Foreword.” Pp. ix – xvi in Ivan Light. “Foreword.” Pp. ix – xvi in Transnational and Immigrant Entrepreneurship Transnational and Immigrant Entrepreneurship in a Globalized Worldin a Globalized World, edited byBenson Honig, , edited byBenson Honig, Israel Drori, and Barbara Carmichael. Toronto: Israel Drori, and Barbara Carmichael. Toronto: University of Toronto, 2010. University of Toronto, 2010.

EndEnd

Thanks for your attention.Thanks for your attention.

Gracias para su atenciGracias para su atenciónón

light@soc.ucla.edulight@soc.ucla.edu

Thanks/GoodbyeThanks/GoodbyeСпасибо/до свидания Спасибо/до свидания