Ethnic entrepreneurs and online home-based businesses

Objectives The study considers how online home-based businesses offer opportunities for ethnic entrepreneurs to ‘break out’ of the traditional highly competitive and low margin sectors they are often associated with. Prior Work Previous studies have found a positive association between ethnic minorities high levels of entrepreneurship (Levie, 2007) and between home computer use and entrepreneurship in ethnic groups (Fairlie, 2006). Despite these associations, no previous studies have explored the formation of home-based or other online businesses by ethnic entrepreneurs. This study seeks to address this gap by exploring how online home-based businesses provide opportunities for ethnic entrepreneurs to form and operate businesses outside traditional sectors (Rath, 2002; Kloosterman, 2010). Approach The study adopts mixed embeddedness (Kloosterman et al, 1999) as a theoretical lens to guide interviews with 22 ethnic entrepreneurs who have started online home-based businesses in the UK. All interviews are recorded, fully transcribed and analysed by thematic coding using NVivo software. Results Our findings suggest two distinct groups of online home-based business ventures. The first consist of mainly entrepreneurs who have good IT qualifications and are using the internet to leverage these, such as running web design or networking businesses or selling computer hardware online. The second group had no IT expertise and saw the web as an opportunity to start a business based on retailing, design skills or other interests. The informants were emphatic that the unique characteristics offered by an online home-based business were instrumental in their decision and ability to form a business. We use the findings of the study to argue that the theory of mixed embeddedness should include notions of choice and agency by ethnic entrepreneurs and also that the entrepreneurs are not only subject to social, economic and institutional forces, but that their actions can positively influence these forces. Implications The findings suggest that online home-based businesses can offer new opportunities to ethnic entrepreneurs that allow them to move beyond being the passive subjects of social, economic and institutional forces. Value The study is of benefit to ethnic entrepreneurs seeking to start new ventures and provides a valuable evidence base for wider social debates about the role and contribution of ethnic groups to the economic and social fabric of the UK. The research also has important policy implications, for example, the efficacy and sustainability of entrepreneurship visas.