Global Entrepreneurship and Transnationalism By Ivan Light Professor of Sociology University of California, Los Angeles

Здравствуйте! Hello! My research concerns the role of migrants in international business, now and in the past. I begin with the past.

Once diasporas were... Ethno-national communities scattered around the globe in continuous, long-term contact with one another. Hub and spokes organization with the homeland as hub Rare even then

Diasporas Diasporas are communicating international settlements organized around a putative or real homeland on a hub and spoke basis. 1 2 \ / \ / 7 -- Homeland -- 3 / | \ 6 5 4

Middleman minorities Historic trading peoples who undertook commercial functions wherever they resided. Middleman minorities were organized into diasporas.

Six Examples Exemplary middleman minorities: Chinese in SE Asia Parsees of India Sikhs of East Africa Armenians of the Levant Jews of Europe and North Africa Hausa of Nigeria

Resisting Assimilation Immigrants assimilated. Middleman minorities successfully resisted assimilation often for centuries. Result: they were bi-cultural or multi-cultural in mono-cultural civilizations. Retention of their ethnic culture enabled them to retain the diasporic structure for centuries.

Trading Diasporas Middleman minorities exploited the commercial resources that their diasporic communities afforded them. Bilingualism Quickly perceived business opportunities International social networks Enforceable Trust Business skills

Bilingualism Speaking their ethnic language as well as the vernacular of their country of residence, middleman minorities could communicate across linguistic barriers that stymied others. In Turkey In Peru In Turkey In Peru Turkish > Armenian > Armenian > Spanish weaver merchant merchant customer weaver merchant merchant customer

Perception of opportunities Living simultaneously in two or more societies, middlemen minorities readily perceived entrepreneurial opportunities for moving goods or services from one to the other. Benson Honig called it, “Dual habitus.”

Popcorn in Chinese movie theaters Introduced by returned students

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

Diaspora and Homeland d6 - d7 - d8 d6 - d7 - d8 / \ | / \ / \ | / \ d5 --- HL --- d1 d5 --- HL --- d1 \ / | \ / \ / | \ / d4 d3 d2 d4 d3 d2

Enforceable Trust The international social networks produced an international system of enforceable trust that subjected to sanctions any who violated the presumption of honesty. Example: Jewish diamond merchants in Amsterdam.

Sanctions Social Isolation Exclusion from the ethnic economy Legal penalties

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

Business Skills Middleman minorities acquired advanced business skills and passed them along to younger generations in hands-on apprenticeships. There weren’t any business schools then!

Resisting assimilation When immigrants or ethnic minorities assimilate, they lose their former commercial advantages: Bi- or multi-lingualism international social networks with enforceable trust Network – wide repository of business skills advantageous perception of market opportunity

Assimilation brings: Mono-lingualism No international social connections No enforceable international trust Mono-habitus Reduced access to ethnic business skills

What’s transnationalism? It’s the modern term currently given to the people who live abroad and in their homelands more or less simultaneously. A recent product of: jet airplanes, electronic communications, globalization

Transnationalism Now Transnationalism provides today’s migrants with most of the same diasporic advantages that were once in the past reserved to middleman minorities. bi-lingualism bi-lingualism international networks based on enforceable trust international networks based on enforceable trust advantageous perception of opportunity advantageous perception of opportunity

Transnationalism does not provide: Centuries – old repertoire of business skills that can be accessed from co-ethnic community Multi-generation access to these resources. Transnationals assimilate. Transnationals assimilate.

Transnationalism’s effect Transnationalism increases the number of people in the world who have access to the diasporic advantages that were in the past restricted to middleman minorities. Transnationalism weakens but does not suppress or replace middleman minorities.

Transnationalism, defined... persistent, multi-cultural diasporas that link a an ethnic homeland with multiple countries of settlement.... persistent, multi-cultural diasporas that link a an ethnic homeland with multiple countries of settlement. Transmigrants are resident in at least two societies, and active participants in all at the same time.

What is Encouraging Transnationalism? Instantaneous electronic communications skype, , web skype, , web Jet airplanes and low fares Host country multiculturalism Sending country retentionism dual citizenship, voting privileges for expatriates dual citizenship, voting privileges for expatriates Entrepreneur visas skip immigration queues skip immigration queues

Transnational Diasporas Hub and spokes structure Bi-lingualism International social networks Enforceable trust But transnationals lack a cultural heritage of business skills that middlemen had!

From above and below “Transnationalism from below” refers to social conditions that result in wholesale production of transnationals among immigrant minorities. “Transnationalism from above” refers to state policies that encourage transnationalism among migratory elites esp. jumping the immigration queue

Is transnationalism eternal? Will transnationals resist assimilation for centuries? Probably not. Middlemen did. However, possibly globalization creates a new transnational for every one who finally assimilates. If so, transnationals assimilate, but transnationalism persists!

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

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

Globalization and Transnationalism Transnationals are well endowed to do the work of linking and integrating economies. bi-cultural, spoke and hub organization, international networks, enforceable trust, prompt perception of opportunity conditions bi-cultural, spoke and hub organization, international networks, enforceable trust, prompt perception of opportunity conditions

Who’s in charge? Globalization is much bigger than transnationalism. Transnationalism is globalization’s helper; it did not singly cause globalization. Transnationalism accelerates globalization.

The dominance of English English has become the dominant language of the world in science, business, and diplomacy. English is the second largest language group in the world if we count only native speakers.

World’s largest language groups # 1 Chinese # 2 English # 3 Spanish But English passes Chinese if non-native speakers are included.

Consequences of English dominance English-speaking business people in Turkey and Peru no longer need the intermediary help of resident Armenians in order to do business. This intermediary service was an important prop of middleman minorities’ commercial advantage and its loss undermines (but does not extinguish) the commercial advantage of transnational entrepreneurs.

Asymmetrical Effects of English dominance In the 1990s, immigration increased the exports of both Canada and the United States without increasing their imports. That is, after a lag, increased immigrants from country A increased Canadian and US exports to country A without increasing imports from A.

A possible explanation Foreigners now speak English so they need no help from transnational immigrants from the USA or from Canada in order to export to Canada or the USA. Speaking English, Swedes don’t need transnational Americans in Sweden in order to export to the United States.

True, Swedes made some mistakes Vacuum cleaner advertising slogan: “Nothing sucks like Electrolux.” If you don’t understand this joke, you are not a native speaker of American English. Jens and the “pirate ship” to Copenhagen

But conversely Mono-lingual English-speakers need the help of resident transnationals in order to export to the immigrants’ homelands. Speaking only English, Americans need the help of Swedish transnationals in the US in order to export to Sweden. Swedes already speak English; they don’t need American helpers to export to the USA.

My friend, Sharon C Sharon C. speaks no Spanish. She could not export American cheese to Mexico until she hired a Mexican American salesman. Now he’s her partner. And they are exporting cheese to Mexico in Spanish.

Transnational Entrepreneurs Transnational entrepreneurs in English- speaking countries enjoy enhanced opportunities in the export trade thanks to their bi-cultural competence. It’s better to be a transnational Polish entrepreneur in Canada than a transnational Canadian entrepreneur in Poland because Poles speak English, but Canadians do not speak Polish.

“ The merchant speaks the customers' language” This ancient adage of international commerce is still true, and it implies that mono-lingual Anglophone entrepreneurs need bi-lingual helpers in order to find/build markets abroad.

Lost in translation Chevrolet Nova = Chevrolet no va = “Chevrolet doesn’t go” in Spanish Chevrolet sales plunged in Latin America!

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

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

A disadvantage The English-speaking countries must rely on transnational business migrants who increase their exports without increasing their imports. Immigration provides the linguistic skills and foreign social networks that enable their exports.

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

Conclusion 1 Transnational entrepreneurs enhance the international trade of all countries. bi-cultural, spoke and hub organization, international networks, enforceable trust, prompt perception of opportunity conditions bi-cultural, spoke and hub organization, international networks, enforceable trust, prompt perception of opportunity conditions

Conclusion 2 However, the English-speaking world obtains the most benefit from immigrant transnationalism, which confers linguistic skills the English-speaking countries lack. Looking out of the goldfish bowl is their unique challenge.

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

Conclusion 3 Country A’s expatriates are Country B’s immigrants. Expatriates promote a source country’s international trade.

What about emigrants? Ireland is an English – speaking country with many expatriates abroad, and immigrants at home. Other English-speaking countries have immigrants, but Ireland also has many expatriates.

The Irish Diaspora expats expats expats expats \ / expats ---- IRELAND ---- expats \ / expats ---- IRELAND ---- expats / \ / \ expats expats expats expats

Irish Expatriates Speak English and foreign languages Speak English and foreign languages Understand Irish society and foreign society Understand Irish society and foreign society Enjoy enforceable trust in two locations Enjoy enforceable trust in two locations “Dual habitus” improves perception of business opportunities “Dual habitus” improves perception of business opportunities Transnationals, not middleman minority Transnationals, not middleman minority

Immigrants in Ireland The same advantages as Irish expats Speak English and foreign languages Speak English and foreign languages Understand Irish society and foreign society Understand Irish society and foreign society Enjoy enforceable trust in two locations Enjoy enforceable trust in two locations “Dual habitus” improves perception of business opportunities “Dual habitus” improves perception of business opportunities

Ireland’s International Trade Ireland’s immigrants and expats offer a possibility for expanding merchandise and service exports of small & medium business sector that is usually underperforming big business in international trade. Ireland’s immigrants and expats offer a possibility for expanding merchandise and service exports of small & medium business sector that is usually underperforming big business in international trade.

References Ivan Light. “Transnational Entrepreneurs in an English-Speaking World.” Die Erde 141 nos. 1-2 (2010): 1 – 16. Ivan Light. “Foreword.” Pp. ix – xvi in Transnational and Immigrant Entrepreneurship in a Globalized World, edited byBenson Honig, Israel Drori, and Barbara Carmichael. Toronto: University of Toronto, 2010.

End Thanks for your attention. Gracias para su atención

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