The academic interest in the emergence of ethnic economies controlled by immigrants and ethnic minorities was born in the U.S.A. in the 1970s, due to the increase of small entrepreneurs among the migrant population, and has later on spread throughout Europe (Light 1972, Body-Gendrot and Ma Mung 1992; Light and Rosenstein 1995; Portes and Stepick 1993; Waldinger 1996; Rath and Kloosterman 2000). Beyond the more generic term of ‘ethnic economy’, there are different ways in which certain ethnic groups engage in the entrepreneurial activity (Barret et al., 2001; Light and Gold 2000; Kaplan and Li 2006).
The term ‘ethnic enclave economy’ is a special case within the general framework of ethnic economy (Zhou 2004; Kaplan and Li 2006). Wilson and Portes (1980), on the basis of data from Cuban exiles who arrived in the United States in the early 1970s, identified ethnic enclaves as a distinct form of economic adaptation. These formations were characterised by the spatial concentration of immigrants, by a substantial proportion of workers of the same nationality employed in these firms and by the variety of manufacturing and commercial sectors.
Portes and Bach (1985) claimed that the enclave was a distinct economic sector, different from the “primary” and “secondary” sectors of the labour market. Those in the enclave had economic benefits that corresponded more closely with their educational attainment, compared to immigrants employed in the mainstream economy –mainly in the secondary sector. In this sense, by definition, the ethnic enclave constitutes a different form of economic adaptation (Wilson and Portes 1980). It emerges essentially to cope with the limiting access to the mainstream labour market which tends to segregate ethnic minorities (Qadeer and Kumar 2006:3).
The enclave offers a protected environment with privileged access to employment, labour force (Wilson and Portes 1980), information, loans (Light 1972; Bonacich and Modell 1980), experience or capital (Portes and Zhou 1992), based on relationships of trust and ethnic solidarity. These resources involve an almost monopolistic advantage in competitive contexts (Light and Gold 2000) and are mobilised through social networks, the base of social and relational capital. Within networks different relationships can be distinguished: a) strong ties among family and close friends, which are crucial in providing funding, b) weak ties: casual friends and colleagues which are advantageous for circulating information (Granovetter 1973), c) horizontal links which limit the economic activity in a few sectors, causing a specialisation that can be transmitted to the group (e.g. Chinese restaurants, Jewish garment industry, kebabs, etc.), d) downward vertical links which promote dependency between various co-ethnic producers and suppliers (outsourcing of co-ethnics), and e) upward vertical links which enable the relationship between producers and customers (i.e., stimulation of specific niches such as food).
In the scholarly literature there has been a long debate regarding the ‘ethnic enclave economy’ hypothesis. According to it, clustering should benefit both, ethnic enterprises and their workers. There are explanations that highlight its competitive advantages arguing that the enclave can be a “mobility machine” and at the same time reproduces some of the features that account for successful firms in the wider economy (Light 1972; Jiobu 1988; Portes and Jensen 1987, 1989; Wilson and Portes 1980). In contrast, other researchers have displayed their scepticism about the beneficial effects of being employed in an immigrant firm (Borjas 1986; Sanders and Nee 1987; Waldinger, Aldrich, and Ward 1990; Bailey and Waldinger 1991; Waldinger 1993; Yuengert 1995; Ahmad 2010). Yet, if we think of the ethnic enclave as a social system with structures that reproduce internal inequalities, it is possible to include both approaches (Valenzuela 2013).
More recently, scholars have focused on the spatial concentration feature and on the social processes connected to the economic globalisation in which small businesses –and ethnic economies in particular– have new advantages (Light 2011). Certainly, in the past, ethnic enclaves gathered businesses in immigrant neighbourhoods with a high presence of co-ethnic residents being also intertwined in an intricate system of co-ethnic social networks within a self-sustaining structure (Zhou 2004). However currently a series of processes having to do with the globalisation of the economic activity and the increasingly marked racialisation of labour market segmentation place the ethnic economy at the core of urban economies, because of the exceptional involvement of transmigrants in international trade (Sassen 2005; Light 2011).
Werbner (2001) rejects the notion of the ethnic enclave economy as a territorially circumscribed place, and affirms that ethnic businesses are embedded in inter-firm relations that produce social space by trading particular goods and commodities in nodal points, which are vertically and horizontally organised. Other approaches make interesting contributions to the link between transnationalism, entrepreneurship and immigrant settlements (Portes 2003; Portes and DeWind 2004). Portes, Guarnizo and Haller (2002)Footnote 1 examine the prevalence of transnational entrepreneurship in immigrant communities and introduce the concept of ‘transnational social space’ in order to capture the dynamics of some ethnic businesses. Landolt (2001) examines a case study of the transnational economic practices linking two Salvadoran settlements in the USA and El Salvador. By theorising the nature of transnational entrepreneurship among Salvadorians, she argues that “it extends beyond the migrant population and envelopes the El Salvador’s entire business landscape” (2001:236).
From a transnational perspective, Stefoni (2013) shows how the significant concentration of commercial activities and everyday practices of Latin American immigrants in the emblematic ‘Plaza de Armas’ in the centre of Santiago de Chile has led to the creation of a ‘transnational ethnic enclave’. In Europe, for the case of Berlin, Miera (2008) explains the early orientation towards an open and transnational market among Polish entrepreneurs in comparison to the more local orientation of prior Turkish entrepreneurship. Strategies of Polish entrepreneurs highlight the relevance of transnational social networks and mobility in the context of national and transnational market conditions and politico-institutional frameworks.
Although in France there are less studies focused on the growing presence of international migrants in independent economic activities (compared to English-speaking countries), notorious scholars, mainly from the geography discipline, have introduced dynamic conceptualisations to immigrant entrepreneurship that must be taken into consideration. Unlike the idea of ‘enclave’ as encapsulated and with a fixed structure, they focus on devices characterised by flexibility and a constant internal reorientation (Ma Mung 1992, 1996; Péraldi, Foughali and Spinosa 1999; Audebert 2007). It involves an attempt to highlight the evolutionary and circumstantial –non-permanent, even short-term features of the economic arrangements among different actors, all of them qualified as ‘ethnic’. This approach also reconsiders the placement of the immigrant business in the space just as a possible consequence of these arrangements, by introducing the concepts of ‘deterritorialisation’ and ‘transnationalism’. From this perspective, immigrant entrepreneurs are embedded in local and transnational strategies at the same time, within a vulnerable social and economic frame which is both local and transnational (Audebert 2007).
The term ‘economic device’ (dispositif économique), introduced by Ma Mung (1992, 1996), revisits the ‘enclave debate’ by underlining the agency of migrants and the prevalence of ethnic considerations in the choice of economic partners. This concept highlights the dynamic dimension of ethnic economies and it pays particular attention to the mechanism of decision-taking used by entrepreneurs in the process of partner’s choice, which is not essentialist or substantialist, but always connected to a specific context. Ma Mung (1992) describes how the Chinese Diaspora is structured around an entrepreneurial centre, with activities “strongly connected” to an “economic organisation in which the dimension of identity is predominant” (1992:117), and with a spatial layout of the businesses, mainly in the region of Paris.
By thinking of the circumstantial nature of the economic arrangements within “economic devices”, Péraldi (2005) shows a different way to choose economic partners based on an ethnic consideration too, looking specifically at Marseille (France). He describes how new forms of migration and mobility from the South to the North are appearing in marketplaces of northern Mediterranean cities like Istanbul or Marseille, where the figure of migrant worker has been replaced by “the commercial traveller, the smuggler or the long-distance trader” (2005:47). These transborder commercial activities involve the development of pluri-ethnic, pluri-cultural and pluri-religious networks (Turkish, Maghrebi and African immigrants) in order to make the economic transactions possible. These are based on future reciprocal commitment and the importance attached to reputation and the code of honour (Missaoui 1995).
This pattern is conceptualised as ‘bazaar economy’ (Geertz 1978), a social institution that exists in all European cities, but is consolidated in big commercial border towns like Marseille. Péraldi, Foughali and Spinosa (1999) identify three main distinctive features of the ‘bazaar economy’. First, the social and urban devices of the bazaar are determined by long-term face-to-face relationships (for instance, a broad network of credit relationships) rather than by formal contracts and normative institutional arrangements. Second, there is an articulation local/global sustained by the ‘competence in mobility’ (compétences à mobilité) of transnational migrants, which solves the paradox of physical dispersion and the prevalence of links that promote relationships, communication networks and other resources to facilitate more effective participation in the ‘bazaar economy’. Third, economic benefits are determined by the capacity of actors to develop strategies and mechanisms to cross frontiers restricted to formal crossing and to offer certain products on the market, both licit or illicit, thanks to the North-South commercial routes.
In Spain, some authors deny the existence of ethnic enclaves due to the relative short time of settlement, the limited scope of ethnic entrepreneurial communities, the difficulty of applying the theoretical model to the case of Spain, and to the legal and administrative barriers that prevent the consolidation of these economies as enclaves (Arjona and Checa 2006; Solé and Parella 2005). Torres (2007), on the basis of Ma Mung’s approach, rejects the use of the term ‘ethnic enclave’ to capture the spatial concentration of immigrant businesses in the neighbourhood of Russafa (València, Spain). He recalls the concept of ‘centrality of immigrant commerce’ (centralité marchande immigrée), where spatially concentrated businesses do not necessarily present economic relationships between them. Yet, they may be related to other commercial activities belonging to the same family group or to other co-ethnics or providers with businesses in other cities. ‘Russafa’ is described like a ‘link’, i.e. just as a physical space where people meet each other and look for information and informal resources.
The enclave as a resilient entity
‘Resilience’ is an increasingly used concept within the academia to highlight the ability of human beings to adapt to and overcome adversities, especially at times of crisis. As the etymological origin recalls, resilience means to ‘bounce’, from the latin resilio or resilire. It was first rooted in the field of ecology related to the discovery of multiple basins of attraction in ecosystems in the 1960–1970s, and it later inspired social and environmental scientists to challenge the dominant stable equilibrium view (Folke 2006).
The enclave, seen as a socio-ecological system, allows to be approached from the resilience point of view. However, in the case of the ethnic enclave, resilience should be understood as a unitary entity rather than individual companies and businesses constituting the enclave. Paradoxically, although the rate of replacement, closure and transfer of businesses is high within the enclave (due to strong internal competition and economic vulnerability), the whole of the enclave is able to adapt and expand in spite of the economic crisis. Based on our case studies we suggest several explanations for the resilient character of the ethnic enclaves.
While there may be diversity of contexts and socioeconomic structures within the ethnic economy, we believe that the enclave’s resilience derives from several elements, such as the use of specific (ethnic and class) resources; the ability to navigate between the formal and informal sectors; the capacity to exploit the labour factor; the spatial concentration; and the transnational social field in which ethnic entrepreneurs are potentially connected. Inside the enclave, dense social networks generate one of its main competitive advantages through which different types of capital and resources flow (labour force, information, mutual support, informal credit, etc.) (Model 1985).
Because immigrants tend to occupy secondary market workplaces not covered by native workers (Solé, Parella and Alarcón 2009), their economic initiatives tend to be convenience stores (small corner shops) run by acquaintances as the model of family businesses. This allows high levels of labour exploitation and flexibility –in terms of working hours, schedules, etc. The process of recruitment, the administrative status of workers (e.g. often undocumented), the existence of a large pool of co-ethnic workers and the lack of specific human capital as a requirement to work in these shops make labour an abundant and cheap resource.
As previously mentioned, ethnic economies tend to move on the edge of the informal economy (Yuengert, 1995), which provides them with some advantages over formal businesses in terms of access to employment, business practices, or taxation. This tendency allows the emergence of ‘bazaar economies’ (Geertz 1978, Péraldi, Foughali and Spinosa 1999), a practice usually imported from the countries of origin depending largely of the control of information available, customer loyalty and bargaining.
As in the Marshalian industrial districts (Markusen 1996), spatial concentration limits transaction costs and facilitates access to resources (e.g. capital, information, work), and to customers and distributors (Wilson and Portes 1980; Portes and Bach 1985) (Kaplan 1997: 215). In other words, spatial concentration favours both vertical and horizontal integration and confines the expenses of trade activity. The settlement in urban and multicultural spaces provides a constant flow of customers (e.g. tourists), perhaps less reluctant than native people to buy at those stores. Enclave competitiveness also derives in expanding its boundaries beyond the limits of the ethnic community and in approaching non-marginal generalist niches. Finally, another factor of resilience relates to the presence of a latent transnational social field (Levitt and Glick-Schiller, 2004) which, regardless of the available local resources, might provide further economic possibilities for co-ethnic workers and employers to struggle against the odds.