Draft:Mixed embeddedness

Mixed embeddedness is a theoretical framework in economic sociology, economic geography and migration studies used to analyse immigrant entrepreneurship. It holds that immigrant business can only be understood by looking at two sides of the entrepreneurial market at once: the would-be entrepreneurs and the social networks they belong to, and the markets and openings available to them, which are themselves shaped by a wider politico-institutional and socio-economic context. The framework was devised by the Dutch scholars Robert Kloosterman, Joanne van der Leun and Jan Rath in a 1999 article and developed through a research programme known as the Mixed Embeddedness project, a collaboration between the University of Amsterdam and Erasmus University Rotterdam.

Origins

Kloosterman, Van der Leun and Rath introduced the term in the International Journal of Urban and Regional Research in 1999, and Kloosterman and Rath elaborated it in the Journal of Ethnic and Migration Studies in 2001. These papers are often seen as marking the emergence of a European perspective on migrant entrepreneurship in a field previously shaped by American research. Kloosterman has described the framework as a European adaptation of the American "interaction" theory of entrepreneurship, which treats migrant business as the product of entrepreneurs' resources and the opportunities they encounter. Where the American tradition emphasised ethnic resources and networks, mixed embeddedness gave more weight to European welfare-state institutions and to the way regulation shapes opportunities.

Framework

Mixed embeddedness responded to earlier accounts that concentrated on the supply side alone, particularly on the ethnic networks and social capital entrepreneurs could draw on. Kloosterman argued that these neglected the markets in which firms actually operate, and drew on the varieties of capitalism literature and Mark Granovetter's distinction between relational and structural embeddedness to address both.

Immigrant entrepreneurs are embedded in social networks that are often largely ethnic in character. This relational embeddedness, which Kloosterman traces to Alejandro Portes and Julia Sensenbrenner, lets entrepreneurs mobilise social capital and shapes their preferences and careers. Portes and Sensenbrenner had argued that such social capital cuts both ways: the community bonds that give entrepreneurs privileged access to markets, labour and start-up capital can also expose successful members to claims from fellow members and generate pressure against those who move up and out.

Entrepreneurs also operate in concrete markets with their own time- and place-specific logic. At this structural level, the markets are themselves embedded, though more abstractly, because they are created and reshaped by the surrounding institutional framework. Trajectories of incorporation through entrepreneurship are tied to combinations of embeddedness at both levels, so studying relational embeddedness alone is not enough.

Opportunity structures

Kloosterman set out three ways in which openings arise for immigrant entrepreneurs, assuming that migrants from less-developed countries tend to have limited capital and modest formal qualifications, which pushes them towards markets with low entry requirements.

• The post-industrial trajectory follows from structural change in advanced economies. The growth of services, outsourcing, more flexible production, cheaper computing, fragmenting consumer markets and deregulation eroded economies of scale in many activities, opening markets to small firms with little capital. These markets are expanding and oriented to customised goods, so they offer better prospects, but surviving in them requires heterogeneous social capital and ties outside the entrepreneur's own group.

• Ethnic markets involve demand for products linked to a region of origin, arising where enough immigrants settle in one place; immigrant entrepreneurs are well placed to serve them, but such markets are more bounded and may eventually limit growth.

• Vacancy chains occur where established entrepreneurs leave unprofitable markets and newcomers replace them, a process Kloosterman likened to the invasion-and-succession models of the Chicago School. These markets need not be expanding, are highly price-competitive, and offer limited prospects of upward mobility.

The three are analytically distinct but permeable. "Breaking out" describes moving from one type of mixed embeddedness to another, involving both new markets and different social ties. Kloosterman's example is a Turkish baker who buys a shop from a retiring Dutch baker, sells at first mainly to Turkish customers, then widens his range to reach a broader clientele.

Reception and criticism

Mixed embeddedness has been widely taken up in European research on migrant entrepreneurship. Critics have cautioned against reducing migrant business to an ethnic phenomenon, since all entrepreneurs rely on social networks, and have argued that concentrating on ethnic markets limits growth, a concern associated with the breakout hypothesis. Stefan Berwing combined the framework with the figurational sociology of Norbert Elias to analyse relational patterns without treating ethnicity as fixed. Studying 584 entrepreneurs of migrant origin in Germany, he found around 64 per cent had no co-ethnic ties to contacts, customers or employees, with wide variation between sectors, and concluded that breaking into mainstream markets was the rule rather than the exception there.

Others argue the framework emphasises structural determinants and leaves little room for individual agency, the capacity of people to make their own choices and act on them rather than being wholly shaped by their circumstances. From timeline interviews with 81 migrant entrepreneurs in the Netherlands, Lisa Berntsen and colleagues stressed the role of "personal enablers" such as mentors, former colleagues and chance acquaintances, particularly where formal business support is absent. The concept has also been called fuzzy and hard to operationalise, and developed mainly at the meso and macro levels. Studying 26 asylum seekers running mostly informal businesses in Nottingham, Angelo Bisignano and Imad El-Anis argued that legal status is a key determinant of the networks and opportunities open to migrants, and that people at different legal stages interpret their own embeddedness differently.

See also

• Immigrant entrepreneurship
• Embeddedness
• Social capital
• Post-industrial society