The Entrepreneurial Immigrant
This is an outstanding article that evaluates business opportunities for Latin American immigrants in the USA by Robert Vainrub PhD, a Senior Fellow at Pino Global Entrepreneurship Center, College of Business Administration at Florida International University. A must read article for immigrants planning to start a business in the USA.
Roberto Vainrub PhD
Senior Fellow, Pino Global Entrepreneurship Center
College of Business Administration, Florida International University
In a world of changing macro-level changes, where water is expected to be a critically scarce resource, China will become the largest economy on the planet, and the products of knowledge-based economies will proliferate the world over, migration—often overlooked—will loom large as individuals struggle to resolve political and economic situations in their home countries. One present example is Spain, where unemployment of the general population (eliminating shadow employment) is estimated at nearly 24% and youth unemployment hovers at the 50% mark. Immigration emerges as one of the consequences and solutions of economic crises.
Being an immigrant somehow makes one automatically an entrepreneur. Either by necessity or by opportunity an immigrant leaves his country of origin to look for new horizons.
This not only applies to people but also to corporations. A company looking for a new market in a foreign country does so, generally looking for opportunities or escaping their own tough realities. In this case, foreign activities by a corporation in a new market might be considered corporate entrepreneurship or intrapreneurship.
One good example is Venezuela. During the first decade of the twenty-first century, the Venezuelan government nationalized various sectors of the economy including oil services, mining, some construction companies, telecommunications, electricity, cement and some food related industries among other. These events together with high transactional costs for Venezuelan companies (Venezuela’s government efficiency ranked 59 out of 59 in IMD’s 2011 World Competitiveness Yearbook) responding to factors such as social insecurity, deficient public services, administrative barriers, legal and political uncertainty (Penfold and Vainrub, 2009) made many of the country’s nationals look for new frontiers.
Factors such as those described made “plan B” become in some instances “Plan A”. Venezuelan corporations such as Farmatodo (retail drugstore chains), Locatel (Drugstore franchise), Sambil (mall operator), Churromania (a fast food franchise), many brokerage firms, Banesco (commercial banking), Empresas Polar (food producer), and many other established operations looked to diversify their local operations by looking at opportunities in other latitudes.
Events like these promoted the creation of what Lara et al. call the “global Latino” (Lara, Briceño y Jiménez, 2009)–ecosystems of Latinos, maintaining emotional, business and professional ties with their countries of origin. These are the natural base of support for the process of geographical expansion of Venezuelan and Latin American companies.
The South American continent has historically been marked by dynamic and hostile environments, especially at the macro level (political, economical and regulatory). Rodriguez and Vidal, (2011) suggest that environments marked by hostility are able to reduce the degree of liberty of organizations and push family firms to exploit their family-influenced resources to shape adaptive strategies, such as internationalization, in order to achieve the desired results. Some of the adaptive strategies are the result of using entrepreneurial orientation, processes and practices developed and followed by previous generations or founders.
What should be the lessons learned by these and other entrepreneurs during the cumbersome process of striving for success beyond their own frontiers? Probably the most significant is being humble. Understanding that the new market is not necessarily similar (most likely it is not) to the one in which the company attained success. Investing in knowledge and market intelligence seems to be a very productive strategy. Leveraging networks–if they exist–appears to be an advisable move. Learning from the mistakes others made before one, and understanding one’s sustainable competitive advantages as well as your liabilities are also of vital importance.
In the case of individuals, franchises sometimes constitute an efficient entry strategy. Piggybacking on the experience that a franchise could give—franchising being a proven model—it is necessary to note that while less economically attractive than a start-up or the acquisition of an existing business, franchises provide a more familiar, less stressful and less risky business model for the immigrant.
The other important issues to be managed are personal and family affairs. These are as equally as important as all other aspects of the business. Be humble, look for advice, leverage one’s network, study the new environment and new market possibilities, try to build a new life while keeping connections to one’s native land, and give the new venture all the resources it requires–as if going back home is not an option. For in many cases, there is no option.
Lara, L. , Briceño, A. and y Jiménez, C. ( 2009) Latinos globales: venezolanos que emigran. Debates IESA, 14 (3) 37-39.
IMD World Competitiveness Yearbook 2011, IMD LausanneSwitzerland.
Rodriguez, A. and Vidal, R. (2011) Hostile environments and entrepreneurial orientation: a study of Venezuelan family firms. In : Understanding Entrepreneurial Family Businesses In Uncertain Environments, editado por: Nordqvis, Marzano, Brenes, Jimenez y Fonseca.. Editorial: Edward Elgar, Reino Unido.
Penfold, M. and R. Vainrub (2009) Estrategias en tiempos de turbulencia – Las empresas venezolanas, Caracas: Ediciones IESA.