Immigrant Entrepreneurs and Global Brands

Over the last three years, I have developed two main areas of focus: I am interested in the intersections between business history and immigrant entrepreneurship. It cannot be denied that migration occurred due to crisis, but I try to look at migration from a different angle, seeking to ascertain what we can learn from the past while also seeking a suitable solution for the future that could benefit all parties. Therefore, I conducted a comparison study on the evolution of global brands between immigrant entrepreneurs and non-immigrant entrepreneurs to examine the significant contribution to the economic growth in the host country.

1. What is the initial problem?

Many researchers have highlighted the role of immigrant entrepreneurs in the host country and many have explored the differences in proclivity towards entrepreneurship between certain groups of immigrants—for example, examining the association between business and race or ethnicity. There are several studies on the impact of immigrant entrepreneurship on the economic growth in the host country but limited studies on their economic contribution through global brands. In my research context, immigrant entrepreneurs refers to those foreign people who come to a host country to operate their businesses; the children of immigrants are also part of this group. The purpose of this study is to investigate the economic contribution of immigrant entrepreneurs to the host country and other advantages they can offer.

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2.  How immigrant entrepreneurs contribute to economic growth in the host country? Is there any evidence?

The innovation of this study is its focus on the role of immigrants in entrepreneurship. This research identified 50 industries from the top 500 Most Valuable Global Brands and, interestingly, the 15 largest industries in the world are dominated by immigrants in North America – these brands were created by immigrant entrepreneurs, most of the successors of these brands in the present day are either family members/heirs (insiders) or nonfamily members/managers (outsiders) who still remain tied to the founder’s principles. If these immigrants were taken out of North America, they would form the third largest economy in the world after China and Japan. Historical evidence from this study indicates that the immigrant’s background—including characteristics, life experiences, network ties, founder principle when they started their business and the ability to manipulate local resources in the host country to compete in the industry—are the main factors in creating global brands, from a small homebased family run business in the past to becoming a global corporation in the present.

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Findings evidenced from multiple case studies in the consumer goods/cosmetics industry show that global brands like Max Factor, Estée Lauder, Avon, Kiehl’s, L’Oréal, Helena Rubinstein, Colgate, brands created by immigrant founders, have dominated the industry. The evolution of these brands also shows that they responded differently in terms of branding and business strategy at the time of brand creation; during crisis periods like the Great Depression, World War I, World War II, and a series of economic recessions; and upon the first internationalisation, as well as the present. Evidence has revealed that these brands are still tied to their founder’s principle spanning back through history, although most of them have adopted a merger and acquisition strategy in the present. This group of immigrant entrepreneurs not only contributes to the economic growth in their host country but is also important for job creation.

Interestingly, immigrant entrepreneurs helped the host country and government during crisis periods such as World War II in terms of economic and supply needs, which also shows that previous difficult life experiences are a determinant factor. At present, their strategies change due to globalisation but are still different from those of global brands created by non-immigrant entrepreneurs. These differences explain how the immigrant entrepreneurs can dominate in some industries, particularly important industries like technology, engineering, computer, consumer goods, media, and others. In summary, in the first place, immigrant entrepreneurs have tended to operate their businesses in well-developed countries, with high purchasing power, an open market structure, less strict entrepreneurial policy and long historical business evidence that strengthens their decision, which explains why the US has attracted more immigrant entrepreneurs than other countries.

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3. What are the consequences, solutions or actions required as based on these findings?Furthermore, interested scholars, policy makers or the government might consider the passion of immigrant entrepreneurs to operate their businesses in a host country, focusing not only on large-scale business, but also on start-ups. This is because start-up immigrant entrepreneurs are growing increasingly, particularly in the computer, internet and engineering industry, and taking a short period of time to prosper due to demand, trends and rapid technological changes. The evaluation of an entrepreneur visa should be revised too, from looking at point-based criteria such as education, languages and amount of savings as evidence to an idea-based evaluation like business plans, implementation of the plan, forecast sales and evidence from the plan, along with creation of jobs for the local population, for instance. In sum, although immigration can be a challenge, the host country needs to identify the potential group of immigrants who meet certain criteria drawn by the host country and allow a trial period for them to try out their ideas.

 

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Watch Nur’s presentation at the Falling Walls Lab 2015 Finale in Berlin here

Nur Suhaili Ramli is a PhD candidate at The York Management School, University of York. Her research interests include international business history, diaspora entrepreneurship, and global brands. She has presented her papers at conferences in the UK and abroad.

Contact Nur on Linkedin here.

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