Business ownership as a solution to unemployment : A case study of self-employed immigrants in Jonkoping municipality

Abstract: The issue of unemployment among immigrants in Sweden started from 1980s when a large amount of immigrants had no access to the labour market (Sördersten, 2004). Many foreign born citizens who could not find any jobs have to live on social welfare. Some of them have found a way to solve their unemployment by becoming self-employed. In 2003, Swedish Integration Board reported that the proportion of self-employment in Sweden was 7.4 percent. This proportion was higher among foreign-born (8.8 percent) compared to native Swedes (7.3 percent). It is of great academic interest for our group to conduct research on immigrant’s business entry decisions. This thesis specifically focuses on identifying and understanding the factors that influence immigrants’ decision to start up their business. This research was conducted in Jönköping municipality by doing a case study on nine ethnic entrepreneurs who come from Non-EU countries, namely: China, Iraq, Iran, Lebanon, Nigeria, Sri Lanka, Uganda and Vietnam. Many studies have been carried out on the topic of ethnic entrepreneurship by researchers such as Waldinger et al. (1990), Basu (1998), Curran and Blackburn (1993), Najib (1999) and Ram (1994). Previous studies will be treated in this thesis as a source of evidence and theoretical framework. Qualitative method was used in this thesis. Case study is particularly chosen as the most appropriate tool in qualitative method to conduct this specific research. In order to obtain information for this case study, semi-structured interview with guideline questions was used. Nine cases including: five restaurants, one clothing store, one cosmetic shop, one assembling company and one carpet shop were selected in this study. The results of this study showed that, the factors that motivated ethnic entrepreneurs’ decision to start their own business were: selective immigration, entrepreneurial traits, blocked mobility, opportunity recognition, level of education, desire for independence and autonomy, financial betterment, business background and previous business experience, business culture values, interests and hobbies. However, opportunity recognition, level of education, desire for independence and autonomy and financial betterment were the factors that played a significant role in immigrant business decision making process. The result also shows that positive (pull) factors outweighed negative (push) factors in immigrants’ decision to enter self-employment. One alternative to unemployment is to become self-employed. It is highly possible that self-employment will lead to lower unemployment among immigrants (Hammarstedt, 2001). It should be in interest of the Swedish government to support self-employment since it will contribute to the growth of the Swedish economy. This thesis may be of interest to Jönköping municipality and other governmental organizations as well as policy makers. It might help them to improve the integration level of immigrants into Swedish society, unemployment level or encourage self-employment by understanding the factors affecting immigrants to start up their own businesses.