Dissertation thesis (Master)
Immigrant entrepreneurship challenges in Sweden.
Their obstacles, strategies, and proposed solutions.
Tutor: Dr Anna Alexandersson Examiner: Dr Malin Tillmar
Abstract ... 4
1. Introduction ... 7
1.1. Background ... 7
1.2. Problem discussion ... 10
1.3. Research Purpose ... 14
1.4. Research Questions ... 14
1.5. Research Outline ... 14
1.6 Academic motivation ... 15
2. Literature review ... 16
2.1 Immigrant entrepreneurs and Immigrant entrepreneurship ... 16
2.1.1 Immigrant entrepreneurs ... 16
2.1.2 Immigrant entrepreneurship ... 16
2.2 Entrepreneurial Experiences (Education, business experiences, and skills) ... 18
2.3 Essential factors that help in the success of immigrant entrepreneurship in the host country ... 19
2.4 What are the challenges or obstacles stand in the way of immigrants starting their own business in Sweden? ... 21
2.5 What are the strategies followed by the immigrant entrepreneurs who succeeded in overcoming the obstacles? ... 24
2.6 Disadvantages of the strategies followed by immigrant entrepreneurs ... 26
2.7 Proposed solutions to overcome immigrant entrepreneurship obstacles in Sweden. ... 28
3. Methodology ... 30
3.1 Scientific research approach ... 30
3.2 Research method approach (Data Collection) ... 31
3.3 Type of data and collection ... 32
3.4 life story (Narrative) ... 36
Live story (Definition) ... 36
3.5 Research design ... 37
3.6 Analysis methods ... 38
3.7 Sampling ... 40
3.8 Research ethic ... 40
3.9 Quality criteria ... 42
4. Empirical Data and Analysis ... 44
4.1 Interviewee no. 1 Ezzat... 44
4.1.1 Ezzat’s life story ... 44
4.1.2 Analysis of Ezzat’s life story ... 47
4.2 Interviewee no. 2 Khalil ... 50
4.2.1 Khalil’s life story... 50
4.2.2 Analysis of Khalil’s life story ... 52
4.3 Interviewee no. 3 Firas ... 55
4.3.1 Firas’s life story... 55
4.3.2 Analysis of Firas’s life story ... 57
4.4 Interviewee no. 4 Laila ... 62
4.4.1 Laila’s life story ... 62
4.4.2 Analysis of Laila’s life story ... 63
4.5 Interviewee no. 5 Basel ... 65
4.5.1 Basel’s life story ... 65
4.5.2 Analysis of Basel’s life story ... 68
4.6 Interviewee no. 6 Muhannad ... 73
4.6.1 Muhannad’s life story ... 73
4.6.2 Analysis of Muhannad’s life story ... 77
4.7 Interviewee no. 7 Mahshi ... 80
4.7.1 Mahshi’s life story... 80
4.7.2 Analysis of Mahshi’s life story ... 83
4.8 Summary of empirical data from interviews ... 87
5. Discussion and analysis ... 92
5.1 Challenges to immigrants with an entrepreneurial background in Sweden ... 92
5.1.1 Information ... 92
5.1.2 Needs and support ... 93
5.1.3 Language and laws ... 95
5.1.4 Lack of Confidence / Discrimination ... 97
5.1.5 Gangs and criminals ... 98
5.1.6 Financing ... 98
5.1.7 Resources ... 99
5.1.8 Temporary residence ... 100
5.1.9 Education and Skills ... 101
5.2 Procedures or strategies followed by the participants ... 102
5.2.1 Traditional strategies ... 102
5.2.2 New strategies ... 108
5.3 Proposed needs or solutions ... 111
5.3.1 On a political level ... 111
5.3.2 Personal needs of entrepreneurs: ... 112
5.3.3 Business support organizations ... 115
6. Conclusion ... 116
7. Limitations and Future Research ... 119
8. References ... 121
9. Appendix ... 124
The wars in some Middle Eastern countries have played an essential role in increasing the number of immigrants to Sweden in recent years. Some of these immigrants hade an entrepreneurial background in their home country. As former entrepreneurs, they have been seeking for opportunities since their arrival in Sweden in order to open their own business.
Our research focuses on the obstacles encountered by seven immigrants from the Middle East with an entrepreneurial background after their stay in Sweden for at least five years, the measures they have taken and are taking to overcome these obstacles, and identifying their views and suggestions for needs. Alternatively, the solutions needed for them to overcome these obstacles and start their business. The research according to the qualitative method, the research is conducted based on using the life story as a kind of semi-structured interviews to collect empirical data and to obtain what is unique in each story. The research was analyzed utilizing thematic analysis and interpretation of the interviewees' explanations.
The results of the research indicated that there are a variety of obstacles that stand in the way of entrepreneurs of our study group, which are structural and cultural obstacles that include language skills, law and information, the lack of effective and appropriate support for their needs, financial support, taxes, money transfer and non- transferable skills. Moreover, access to resources and the confidence of external parties in the host society and that, we found two new obstacles: the control of criminal gangs over some immigrant areas and the exploitation of old immigrants, including accountants and lawyers.
As for the strategies they undertook to overcome these obstacles, they were traditional and similar to those undertaken by former immigrant entrepreneurs, such as ethnic entrepreneurship and networks, or new, such as early communication with business support organizations, work, training and volunteer, and they showed great flexibility to adapt and overcome obstacles. Their proposed needs were centred around teaching the Swedish language and work culture during training or work, working with
Swedish entrepreneurs, government support, tax cuts and government encouragement for them, in addition to the need for effective support when establishing the company and after incorporation, real analysis of the needs and increased police interest in immigrant areas and facilitating their access to resources, suppliers and customers.
Our group has shown great flexibility to adapt and overcome obstacles and be aware of the majority of obstacles that may arise as a result of ethnic entrepreneurship.
Terms used in the research:
ALMI, New company: A name for a business support organization in Sweden.
Keywords: Immigrant entrepreneurship, Immigrant entrepreneurship obstacles and strategy, Immigrant entrepreneurship problem in Sweden, Immigrant with
entrepreneurial background, Life story.
I dedicate my dissertation work to my family and my friends.
A special feeling of gratitude to my father's soul, who has struggled all his life for my siblings and me.
To my mother, who stayed up for many nights helping us to study.
I also dedicate this dissertation to my husband and my children, who supported me throughout the process and two full years of studying.
I dedicate this work and give special thanks to my siblings, relatives and friends.
To all immigrant entrepreneurs who are struggling in their new host countries.
To Syria and Sweden (My home).
I would like to express my gratitude to all those who made it possible to complete this thesis. I thanks Linnaeus University in Sweden; I'm proud to be one of its
Special thanks to my wonderful supervisor, Dr Anna Alexandersson, for her support, advice, and observations to enlighten my work in this thesis. I will never forget her
beautiful discussions. Yes, she was very inspiring. Thanks for her patience and prompt response to any message or request regarding the thesis. Thanks for the
ideas, clarifications and advice that made my view looks like this.
I thank the examiner Dr Malin Tillmar for her sincere work, guidance, advice, and constant encouragement, thanks for her flexible response to provide the best for the
students. Her suggestion was precious for my thesis.
I thank all of my wonderful colleagues for their feedbacks and their advice.
I thank my social media friends who supported me and have played a significant role in reaching the target research group in my research.
Thanks to all of the immigrants I met, who tried to give me all the time and information they could (I believe in you).
To Egyptian,s Ahmad. (Thanks)
Immigrants have formed an essential part of the world demographics and the demographic composition of the world's major cities. Their presence is more in developed regions such as Europe, Australia and America (Uddin, 2016). Europe has important factors attracting immigrants as political stability and economic prosperity.
The refugees represent the largest share of them. They left their countries due to the economic situation and political conflicts, wars and so on to obtain a better and more stable life (Suchkov, 2018).
Sweden is one of the country's most known to receive immigrants over time, firstly the migration of European workers, followed by immigration from Asian and Latin American countries. Since the mid-seventies, the majority of immigrants to Sweden are from African and Middle Eastern countries. The remarkable increase in immigration to Sweden in the recent decades has changed the demographics of Sweden. About 20% of its population in 2019 are immigrant or foreign origins; about 55% are from outside the European Union (Miao, 2020). Immigrants from outside the European Union in Sweden suffer from unemployment and discrimination against them in the labour market, which prompted many of them to open their businesses to avoid unemployment and discrimination (Miao, 2020).
Immigrant entrepreneurship has recently turned into an economic and social phenomenon of great importance in creating new jobs and prospering and creating wealth for the host country. Its role was not limited to the economy, but its role appeared in several aspects, such as transforming ethnic societies into vibrant societies. Furthermore, it played a role in recognising immigrants, their superiority, and social integration in the host country (Sinnya &Parajuli, 2012). In addition to its role in innovation, social integration and a significant rise of entrepreneurial activities (Maria & Kristin, 2017). A report from the Swedish Economic and Regional Growth
Agency indicates the immigrant entrepreneurs' contribution to 20% of new companies in Sweden (Barth & Zalkat, 2020).
It is challenging for people when moving to a new country and a new society to establish their own companies, as immigrants face many obstacles and challenges, which language, weak networks, discrimination and training or qualification inconsistent with the host country system (Sinnya &Parajuli, 2012). In addition to the role that cultural differences, the labour market, and the lack of information about Swedish institutions and authorities play in the failure of immigrant entrepreneurship (Barth and Zalkat, 2020). Immigrant entrepreneurs used various strategies to overcome their challenges, including business support, ethnic groups, virtual integration, entrepreneurship experience, and niche markets (Barth & Zalkat, 2020).
Fleeing unemployment and not getting a job suitable for experiences and qualifications were among the important reasons that encouraged immigrant entrepreneurs to open their own companies, in addition to the ambition and desire for financial independence (Sinnya &Parajuli, 2012). Immigrants with previous entrepreneurial experience are more likely to become entrepreneurs in Sweden. They tend to transfer their business ideas from their home country to the host country. They focus on discovering and identifying innovative opportunities and seeking help from all social networks, environmental factors and vigilance. They consider that getting to know local entrepreneurs and interacting with them is one of their business priorities;
therefore, their chances are more significant to learn about the opportunities in Sweden (Uddin,2016). Although according to one of the studies in the United States, immigrants' previous entrepreneurial experience increases their chances of starting a business. It seems that they have better access to money and resources in the host country (Barth & Zalkat, 2020). In addition, they are more inclined than their Swedish counterparts to open their businesses (Barakji& Kalssli, 2017).
Entrepreneurship is an emerging and rapidly changing field that studies practices to identify successful profitable and non-profitable projects and works to develop and
implement them. Those organisations strive to promote change in society through innovative solutions (Kickul, Gondry, Mitra and Berkut, 2018). There is a great interest in entrepreneurship at present in Europe and Sweden in particular. The European Commission has recognised Entrepreneurship as one of the most important means of helping solve the immigrant unemployment problem and their integration into society. The Commission focused on the importance of starting companies and businesses by the immigrants unemployed (Sondari, 2014). There is an increase in immigrants entrepreneurial activity, resulting from the great encouragement by the Swedish government for entrepreneurship and its activities, by creating an environment conducive to entrepreneurship and through advisory services, language education and financial support in several ways (Suchkov, 2018).
Immigrant entrepreneurship is an essential economic and social phenomenon. It is an excellent attraction for administrative sciences scholars who benefit from the research presented by sociology, economy and anthropology scientists. On the other hand, intercultural relations are an essential focus, about which research revolves around the phenomenon of migrant entrepreneurship due to its nature (Glinka, 2018).
Immigrant entrepreneurship research has included, almost from its inception, the cultural and economic aspects resulting from the work of immigrant entrepreneurs in the host country who started opening their businesses in a new cultural, political and economic environment. This requires immigrant entrepreneurs' unique skills and the ability to move or work in several diverse environments simultaneously. These challenges that migrant entrepreneurs face in the host country constitute an excellent attraction for researchers in immigrant entrepreneurship, which with time, became an important and essential part of entrepreneurship research, and it formed an attractive and distinctive field of researchers and scientists on a large and multiple scales (Glinka, 2018).
1.2. Problem discussion
During the years 2014-2017, Sweden received many refugees escaping from wars in the middle east, which has led to an increased number of immigrants in Sweden. In their countries, and due to the high unemployment rate, social exclusion, and the lack of opportunities that match their experiences and skills, entrepreneurship was one of the leading career paths for many immigrants (Miao, 2020). Those immigrant entrepreneurs in Sweden are facing significant obstacles when starting their businesses. The language barrier, integration to the labour market, governmental regulations, new laws of the host country, lack of information and poor network communications are on the top (Barth & Zalkat, 2020). Sweden is working hard to promote self-employment as a solution for unemployment and the integration of immigrants into the host society. The country promotes entrepreneurship through accelerators and incubators. Accelerators and incubators are not fully helping immigrants overcome obstacles in their entrepreneurial journey. Instead, they had a role in alleviating these obstacles and providing a good background about the difficulties that immigrants suffer in starting their businesses (Suchkov, 2018).
Over the past decade, the self-employment rates in Sweden are low; it is only 8.6%
compared to 13.7% in the European Union. On the other hand, entrepreneurship based on necessity is very low in Sweden. It is only 7% compared to 24.3% in the European Union; about 20.4% will start their business in the EU compared to 14.8% in Sweden, making Sweden occupies the sixth position for entrepreneurship in the European Union (Blackburn & Kasperova, 2018). In 2015, Sweden restricts some laws related to immigration, one of them was recognising certificates, professional skills, educational and university accreditation papers for immigrants from the Middle East.
These laws had a significant negative impact on immigrants from the Middle East, in general, and on those with experience, entrepreneurial skills, and self-employment in particular (Barth & Zalkat. 2020).
On the other hand, sometimes, even those with an entrepreneurial background struggle when opening their own business due to limited language competence (Suchkov
2018). The success of immigrant entrepreneurship was often attached to family and close friends, as they replaced their traditional networks of work with ethnic networks that led to the formation of a small ethnic community far from the community as a whole, which had a negative role in integration (Barakji & Kalssli, 2017). This group of immigrants often suffer from discrimination in the labour market, whose unemployment rate is higher than their Swedish counterparts (Suchkov, 2018). In addition, they are often of an above-average age, which is more excluded from the labour market (Gustafsson, Mac Innes & Österberg, 2017). Some research has raised the need for greater integration into the host community (Aaltonen and Akola, 2012), or from a political perspective, solutions that have been proposed related to a good understanding of the conditions for immigrant entrepreneurship by host country policies that provide supportive systems for migrant entrepreneurs (Barth & Zalkat, 2020).
However, immigrant entrepreneurship is one of the suitable forms of integration. It has a good role in bonding and strengthening the general social cohesion in the community or city that embraces this entrepreneurship and works to increase interaction and bring innovations to the city. Moreover, cultural, ethnic and social diversity will help bring in diverse forms of human capital and will encourage cultural creativity, technological and scientific innovation (Eraydin, Tasan-Kok & Vranken, 2010).
The importance of immigrant entrepreneurship and its role in the progress and economic prosperity of the host country, Sweden, in our example, makes us realise the necessity of the research to discover the obstacles that are facing immigrants in this field to start their businesses in Sweden. In addition to the rapidly changing business environment, the permanent influx of refugees, immigration policies changes, and business systems among immigrants, which have a significant impact on immigrant entrepreneurship, this makes us assume that there is always a need for new research to deeply understand these barriers that may have changed over the time (Suchkov, 2018).
Previous research has focused on studying immigrant entrepreneurs' obstacles in the host country in general, as the topic is not a new one. However, the focus was on the obstacles of entrepreneurs in the survival mode of their business. There are researches showed that immigrants tend to meet many challenges when they run a company as the new culture or the new language (Enow, 2010), (Suchkov, 2018) and (Barth &
Zalkat, 2020). Enow (2010) identifies the obstacles faced by immigrant entrepreneurs in Sweden to start their own business as follows: finance, administrative and organisational skills, sales and marketing, in addition to the cost of living and language barriers. Other studies focused on the obstacles of Arabs entrepreneurs in Sweden and strategies they follow as ethnic immigrant entrepreneurship (Barakji &
Kalssli, 2017), or the obstacles to the sustainability of immigrant entrepreneurship and the problem of the "liability of newness" (Barth & Zalkat, 2020).
Immigrants from various countries have a different social context and cultural value than the host country; they meet a challenge in adapting to society (Hamberger, 2009).
The social context and culture they see themselves in could complicate their immigrant entrepreneurs' positions (Sahin, Nijkamp & Baycan-Levent, 2007). Also, it creates a lot of barriers and difficulties in resources mobilisation and legal recognition for starting a business (Barth & Zalkat, 2020). The variety of national culture traits from diverse country origins somehow characterises social context and impacts immigrants' behaviours (Sobel, Dutta & Roy, 2010).
Previous research did not cover the obstacles facing immigrants from the Middle East after five years of their stay in Sweden, at least. This group has more significant obstacles than its counterparts from the European Union (Enow, 2010). In our research, we decided to study the immigrant category who have resided in Sweden for at least five years to ensure that this group has become better informed about the labour market in Sweden and the procedures and often has good language ability. This gives us a more excellent idea of the obstacles that often change over time by changing
regulations, laws and others (Suchkov, 2018). Another exciting thing in our research and essential is to share the views and suggestions of the participants as former capture understanding and interpretation of their situation and investigate their views of these obstacles, how they see them after five years of residence in Sweden.
The study based on a qualitative method, which provides a deeper understanding of a particular research field and highlights the participant's perspective (Bryman, 2018).
The chosen method based on the fact that it is the most advantageous method to answer our research questions. The qualitative method consists of collecting empirical data in depth to provide an effective and overall picture of the problem. The study based on the life stories of immigrants linked to entrepreneurship. In the story of life, we get what is unique from the stories of entrepreneurs (Johansson, 2005), as the researchers in entrepreneurship have recently adopted the narration to collect data (Larty & Hamilton, 2011). Rae and Carswell (2000) realised that the entrepreneur's own story is rarely heard.
We aim to uncover some problems that may be necessary to pay attention to, so those immigrants start their own business and play a significant role in the host country's economy, help to reduce the unemployment rates, and fully integrate into the Swedish society. This research is vital for policymakers by identifying and shed light on obstacles to provide a good and deep understanding of the problem. The research is rich with information and views obtained during the research from immigrant entrepreneurs stories and reflects their point of view and their basic needs to start their business in Sweden.
Our research is essential for both immigrants who desire or intend to start their own business in Sweden and scholars interested in migrant entrepreneurship.
1.3. Research Purpose
The purpose of this research is to investigate the challenges and obstacles that continued to face immigrant from the Middle East with an entrepreneurial background in opening their own business in Sweden after their stay for at least five years. In addition to knowing their procedures and strategies that they followed to overcome these obstacles. Their views on the problem and their real needs in the host Country are also highlighted.
1.4. Research Questions
➢ What challenges and obstacles stand in the way of immigrants with an entrepreneurial background to start their own business in Sweden (after staying for at least five years)?
➢ What are the strategies followed by these immigrants in Sweden so far to start their own business?
➢ What are the suggestions, solutions, or needs that the participants see, in light of their experience, to help them overcome obstacles?
1.5. Research Outline
The thesis structured easily, so the reader understands the research process. The introduction chapter has a detailed background explaining the Immigrant entrepreneurship concept followed by a problem discussion highlighting some previous researches, especially in Sweden. The research purpose and questions are describing the aim of this thesis. The literature review chapter provides extensive literature to outsource previous findings on the thesis topic. The methodology chapter is discussing the potential methodologies leading us to conduct our methodology of narrative life story. The empirical data chapter provides seven case studies:
immigrants to Sweden with more than five years of stay and different entrepreneurial backgrounds. Data is analysed in the same chapter after each case. Then a table with the initial data before classification. The discussion chapter discusses the summary
result of the interviews while linking them to previous research mentioned in the literature review. The conclusion chapter answers the research questions and provides suggestions for future research. Finally, the limitations of our research study are discussed and put our suggestions for future research.
1.6 Academic motivation
There is limited access to knowledge on immigrants entrepreneurship problems in Sweden. This thesis research highlights the immigrant entrepreneur's obstacles in starting their businesses in Sweden and recognising the strategies they follow with prospective solutions. According to the data analysis, the conclusion fills the gap in the present literature. Furthermore, it provides a clear picture of the problem to help scholars and researchers in their future research aiming to improve the environment of immigrant entrepreneurship in Sweden.
2. Literature review
2.1 Immigrant entrepreneurs and Immigrant entrepreneurship 2.1.1 Immigrant entrepreneurs
They are people who move to a new host country and end up opening their own business, and they did not necessarily move for this reason. According to the cultural approach, the primary motivation for opening their businesses is cultural values and characteristics. According to the structural perspective, their decision to open their business is due to structural barriers such as discrimination within the labour market, untransferable qualifications, or weak language skills (Barakji & Kalssli, 2017).
2.1.2 Immigrant entrepreneurship
Entrepreneurship is the process of rearranging and gathering resources in new ways to create something of value. It was argued that the concept of entrepreneurship involves risk and innovation, especially when it comes to immigrant entrepreneurship, where different entrepreneurs provide various and different levels of value (Aldrich
& Waldinger, 1990). According to Price (2012), immigrant entrepreneurs are divided into entrepreneurs with a high level of skills, who contribute well in various sectors that require an educational background and entrepreneurs with a low level of skills, who have limited options due to the lack of necessary knowledge, so it is often resorted to providing ethnic services or products linked to their familiar contexts, such as clothing and food.
Some studies have confirmed that immigrants in the host country resort to entrepreneurship to escape unemployment and discrimination in the labour market (Miao, 2020), as immigrants get fewer opportunities than their counterparts born in the country, which results in discrimination and inequality in wages and labour market, which drives immigrants to start their own businesses (Barakji & Kalssli, 2017). Others argue that the social situation in their new society is one of the primary drivers of entrepreneurship, as immigrants trying to start their businesses in an attempt to prove their presence, acceptance in their new society. They seek the recognition of their existence, and getting income is not the only motivation to start entrepreneurship
(Sahin, Nijkamp, and Baycan-Levent, 2007). From another point of view, immigrants begin to open their business because they see that their belonging to a particular community is a real opportunity, so they work to exploit this society to a large extent for their work (marketing, networks, knowledge, financial support, etc.). Their dependence on this community will help them succeed in businesses that require credibility and connections with their ethnic community in their home country or the host country (Aaltonen & Akola, 2012). Another concept discussed by Price (2012) is the "blocked mobility" thesis, which states that discrimination in the host country leads immigrants to engage in entrepreneurial activities.
According to Price (2012), three reasons describe why immigrants do business; the enclave thesis, the blocked mobility thesis, and the diversity advantage thesis. The enclave thesis: It is closely related to the cultural perspective, as it leads to taking organisational measures to serve ethnic products in ethnic communities. The blocked mobility thesis includes an entrepreneurial initiative resulting from discrimination in the host country. Diversity advantage thesis: This thesis applies to highly skilled immigrants who can provide creative and innovative solutions to urban society and contribute to economic growth.
Immigrant entrepreneurship is divided into three basic concepts, the cultural perspective, the structural perspective, and the mixed inclusion perspective. The cultural perspective considers that the individual's cultural background supports and attracts entrepreneurship. In contrast, the structural perspective focuses on discrimination in the host country and other factors such as education and language skills. Finally, the mixed perspective combines factors for the two previous perspectives (Barakji & Kalssli, 2017).
Immigrant entrepreneurship has been regarded as an economic and social integration tool that immigrants can utilise to create social values, stimulate innovation and drive society changes (Kickul, Gundry, Mitra & Berçot, 2018). Through their entrepreneurial process of rearranging, reorganisation, and resource reallocation,
immigrant entrepreneurs mobilise their entrepreneurial activities, create successful businesses, and provide job opportunities for other groups (Uddin, 2016). As well as enforcing an enhancement of social interaction and relationship in the labour market and the local community for a great social integration (Eraydin, Tasan-Kok &
Vranken, 2010). Immigrant entrepreneurship plays an essential role in contributing to economic growth, job creation, innovation, social integration and a remarkable rise of entrepreneurial activities (Maria & Kristin, 2017).
The motivations of immigrant entrepreneurs are more than their Swedish counterparts in opening their own business, due to the challenges they face in the host community when they search for job opportunities in organisations and companies such as (language, licenses, prejudices, etc.), as they adopt the strategy of starting a private business to escape from unemployment. On the other hand, immigrant entrepreneurs may have knowledge and skills acquired in the motherland and that those born in the country do not possess or can imitate. In addition, they use various resources and strategies to maintain their companies (Barth & Zalkat, 2020).
2.2 Entrepreneurial Experiences (Education, business experiences, and skills) Entrepreneurial experience is an essential factor in the decision of migrant entrepreneurs to establish their business in the host country, and it is one of the critical factors for the success of immigrant entrepreneurship (Barth & Zalkat, 2020). Where it is likely that a group of immigrants with previous entrepreneurial experiences will become entrepreneurs in Sweden, as they recognise the innovative opportunities early and tend to seek assistance from all environmental, social and vigilant factors (Uddin,2016).
Immigrants who have business ideas from their home country and want to transfer them to the host country focus more on the Swedish business environment because they know the value and importance of opportunities. As they have previous and diverse experiences, they focus on knowing the available opportunities in Sweden (Uddin, 2016). This group focus more on discovering and identifying innovative
opportunities, so they focus on the help from social networks, environmental factors and awareness, and on opportunities that require advanced education and technology, and getting acquainted with and interacting with local entrepreneurs is one of the priorities of this group, so their chances increase more to get acquainted with the opportunities available in Sweden (Uddin, 2016).
Often immigrants come to Sweden from less developed countries, which means that there is a difference in business between the two countries. These results in some unrecognised opportunities that immigrants have in the host country (Uddin, 2016).
On the other hand, their new businesses entering new markets face the challenges of
"the liability of newness", which poses a risk to their entry into markets and their success, such as the ethnically immigrant entrepreneurship that creates structural barriers and obstacles that restrict their entrepreneurial activities. However, entrepreneurs with previous entrepreneurial experience are more able to overcome the
"the liability of newness" compared to their novice counterparts (Barth & Zalkat, 2020).
From the Barth & Zalkat (2020) point of view, immigrant entrepreneurs with low language skills and low educational levels cannot meet the challenges of modernity and survive even if they have previous entrepreneurial experience. On the other hand, entrepreneurs with higher or intermediate education and intermediate language skills can survive with or without previous entrepreneurial experience. Other researchers point out that entrepreneurial experience is compensatory (Barth & Zalkat, 2020).
2.3 Essential factors that help in the success of immigrant entrepreneurship in the host country
The importance of immigrant entrepreneurship in the host country as a factor for economic prosperity and social integration makes us interested in shedding light on some points that enhance its success.
From a cultural perspective, the country of origin seems to have an important role in the immigrants choice to become entrepreneurs in the host country. Immigrant
entrepreneurs with stronger cultural traditions are more willing to start their businesses (Barakji & Kalssli, 2017). According to Hammarstedt (2001), the first generation of immigrants has more desire and inclination to become entrepreneurs than their counterparts from their ancestors or Swedes.
According to what stated in an article by Barth & Zalkat (2020), the success of migrant entrepreneurs can be classified in two perspectives; A cultural one, where the success of the entrepreneur depends on the ethnic groups to which the immigrant belongs, in addition to their position in the markets, social and virtual integration, and also previous experience in entrepreneurship business before immigration, and a classical perspective, where the success of immigrant entrepreneurship hinges on the education level, commitment and tolerance of risks, as well as practical experiences. However, each culture has its values and its way of daily practices (Barakji & Kalssli. 2017), and according to Masurel et al. (2004), culture is carried across borders. When immigrants integrate and become part of the host community, they need to work to reach a common ground suitable for both parties, so they must adapt to the cultures and traditions in the host country (Barakji & Kalssli. 2017). Collins (2003) states that the introduction of multiculturalism leads immigrants to obtain better opportunities.
Immigrants who have business ideas from their home country and want to transfer them to the host country learn well about the Swedish business environment because they value the opportunities (Uddin, 2016). Immigrants who have grown up in the host country know the business environment, rules, regulations, and support organisations. They also have large social networks and great awareness about the available opportunities. They are more inclined to identify innovative opportunities and focus on people's problems and needs (Uddin, 2016).
Entrepreneurial experience plays an important factor in the decision of migrant entrepreneurs to establish their business in the host country. It is one of the important factors for the success of immigrant entrepreneurship in the host country. This previous entrepreneurial experience can overcome the "the liability of newness"
compared to their novice counterparts (Barth & Zalkat, 2020). Immigrants work to
build trust in their common ethnic community but neglect to build trust in the host community (Barakji & Kalssli, 2017). To overcome this problem, immigrants need to be more integrated into society by using the host country's language, tales, and moral rules (Aaltonen and Akola, 2012). Focusing on consumer habits changes is important (Barth & Zalkat, 2020). Virtual and digital embedding is very important in immigrant entrepreneurship as it provides more support than ethnic networks in their community.
Some entrepreneurs have used this strategy for sales, marketing, customer relationship, and demonstrating legitimacy (Barth & Zalkat, 2020).
2.4 What are the challenges or obstacles stand in the way of immigrants starting their own business in Sweden?
Migrant entrepreneurs work to revitalise the host country's economy and contribute to its economic prosperity through their businesses and commercial activities (Barth &
Zalkat, 2020). However, immigrants are facing many and various obstacles when trying to start their businesses in the host country. Researchers have divided these into cultural, structural and mixed perspectives (Barakji & Kalssli, 2017).
The cultural approach suggests that the cultural characteristics of the individual and the values have a significant and fundamental role in the orientation of immigrants to become entrepreneurs in the host country. However, adapting to the new culture of the host country, its habits and traditions, and understanding the population's mentality is not easy and needs time and effort (Aaltonen and Akola, 2012). Furthermore, the cultural difference between the host country and the home country creates a cultural gap that leads to a trust gap between immigrants and other parties in the host country as immigrants focus on creating trust with their ethnic community but neglecting to create trust with the larger host community (Aaltonen and Akola, 2012).This view is confirmed by Barakji & Kalssli (2017), who set the challenge of the external environment as an obstacle, which in turn formed an ethnic bubble and created a cultural gap between them and the Swedes, and limited their integration into the entire society.
The integration process takes a long time due to the cultural difference between the immigrant culture and the host country culture, which is due to the lack of an effective integration system that helps them to better understand the Swedish system, in addition to improper integration in the host country, This is like a great barrier to the immigrant entrepreneurs (Barakji & Kalssli, 2017).
The structural perspective focuses on the external factors that affect the immigrant entrepreneurs in the host country, such as discrimination, which is considered the main motivation for immigrants to start their business in the host country to escape unemployment (Altonen and Akola 2012). Ohlsson et al. (2012 ) pointed two additional structural barriers, which are qualifications and skills that are not transferable in the host country and weak language skills, which together form structural factors that increase the representation of immigrants in entrepreneurship.
Mitchell (2016) introduces other structural factors such as lack of human resources and financial capital, low educational level, educational qualifications and language skills, which increase the representation of immigrants in markets with low barriers and does not need education or high language skills. These markets are more attractive to immigrants to start their business and entrepreneurial activities (Mitchell, 2016).
From another point of view, these factors are considered a barrier to the growth of immigrant companies (Mitchell, 2016). Discrimination in opportunities in the labour market is also considered one of the most important of these structural obstacles (Barakji & Kalssli, 2017).
Other researches identify other structural obstacles as the lack of capital, government regulations, differentiation in behaviour, financial risks, distribution, in addition to advertising (Lutz et al., 2010). Shala, Kidane & Ong (2009) identified other factors such as low educational level, access to markets and capital. On the other hand, race and ethnicity in migrant entrepreneurship may create structural barriers that restrict immigrant entrepreneurship activity and limit its growth and sustainability, as immigrant entrepreneurship encompasses not only its social or cultural context but
also the social, economic and political contexts of the wider community (Barth &
According to the embeddedness perspective, which considers the need to include political, economic, social and cultural aspects together for better integration, the position of the entrepreneur in society constitutes his opportunity. Some internal and external factors hinder immigrant entrepreneurship, such as bureaucratic government regulations, rules and laws, and cooperation from different parties. The embeddedness of immigrant entrepreneurship has a role in overcoming these obstacles (Mitchell, 2016).
According to Barth & Zalkat (2020), new immigrant companies face challenges in their early stages called the liability of newness, which is divided into two parts;
1. access to resources (employees, financing, raw materials, customers and suppliers, government approval and support) & 2. working on Rapid collection of these resources to build organisational capacity and exploit opportunities. So, it is often difficult for immigrant businessmen to access resources and business networks in host countries. Also, they may not understand well local market forces, consumer behaviour, government regulations and rules, or they may lack good skills of the host country language. Starting capital was an obstacle that existed, especially when immigrants had no financial institution relationship or affiliation history. Previous challenges made it difficult for migrant entrepreneurs to form relationships or convince stakeholders to deal with them (suppliers, clients, investors, and other stakeholders (Barth & Zalkat, 2020). Enow (2010) agree with this view and identifies the obstacles faced by immigrant entrepreneurs in Sweden to start their own business as follows: finance, administrative and organisational skills, sales and marketing, in addition to the cost of living and language barriers.
Enow (2010) argues that financing is the biggest obstacle to immigrant entrepreneurs in the host country, which sometimes forces them to sell their assets and borrow from their families or informal sources of financing, as friends and relatives. Enow (2010)
ranked the marketing obstacle as the second hindrance to immigrant entrepreneurs, where immigrant entrepreneurs want to increase the number of clients to expand their business and increase their profits. The marketing challenges of migrant entrepreneurs differ according to the city size, where the marketing obstacles are more significant in large cities due to increased competition. In addition to the cost of living and administrative and organisational requirements of operation, that are associated with the increased number of customers, which is more significant in large cities.
Administrative and organisational requirements pose a great challenge in large cities that are the main destination for immigrants. These challenges result from the lack of awareness of the requirements and how to work in the new environment (Enow, 2010).
2.5 What are the strategies followed by the immigrant entrepreneurs who succeeded in overcoming the obstacles?
The motivations of immigrant entrepreneurs are more than their Swedish counterparts in opening their own business, due to the challenges they face in the host community when they search for job opportunities in organisations and companies such as (language, licenses, prejudices, etc.), so they adopt the strategy of starting a private business to escape from unemployment. On the other hand, immigrant entrepreneurs may have knowledge and skills acquired in the motherland and that those born in the host country do not possess or can imitate. In addition, they use various resources and strategies to maintain their companies (Barth & Zalkat, 2020).
Cultural difference or cultural mismatch between immigrants and their new society was among the most critical problems encountered by immigrant entrepreneurs (Barakji& Kalssli, 2017). Immigrant entrepreneurs realised the importance of building relationships and understanding the mentality of the local population (customers); in addition to the great efforts they made for better integration in Swedish society, their strategies were diversified for that (Enow, 2010). For example, Arab entrepreneurs worked with additional and good efforts towards better integration in the Swedish society through their work, so some of them worked to understand the Swedish consumer more, how their culture and mentality, so they changed some food
packages to be environmentally friendly and to suit the thinking of the Swedes, others used to work in Swedish businesses close to their experiences with to understand the work system in and how to open companies in the same field (Enow, 2010). Where Barakji & Kalssli (2017) also found in their research that immigrant entrepreneurs are actively working to ensure that they are welcomed by the Swedish locals.
Aaltonen and Akola (2012) emphasised to us the importance of building trust with the context in the host society, so the strategy proposed by immigrant entrepreneurs was the need to work more for more effective integration. On the other hand, networking and customer retention are among the problems facing immigrant entrepreneurs in Sweden. Some of them worked to strengthen relationships with customers and to create loyalty and product warranty or by preserving prices (Enow, 2010). Also, price competition was one of the strategies used by immigrant entrepreneurs in Sweden, by legal or illegal means, or by reducing the cost of labour, for ex: One of the most important strategies that Jewish entrepreneurs followed to confront discrimination against them in the labour market in America was to reduce the cost of labour, which allowed them to compete with a high price, then the successful ones moved to the bigger markets (Godley, 2014).
For financial problems and what is related to capital, the personal networks were the basis for facing the problem of financing and initial capital through borrowing from family and friends or selling savings (Enow, 2010). Barth & Zalkat (2020) agrees with this idea in their research that entrepreneurs used their savings or loans from family and friends to overcome the initial capital problem and to be able to open their businesses. Others went to categorise the entrepreneur's strategies in facing this challenge into public and private strategies. Immigrant entrepreneurs used public strategies to gain support for their businesses, such as loans, enrollment in government training programs, and contact with business advisory service. In the private strategies, they employed relatives, family members and friends who were the main source of information about the market and information related to trading. However,
it was difficult for them to employ others (Barth & Zalkat, 2020). For the lack of information, immigrant entrepreneurs have resorted to relying on their ethnic context and obtained information through their ethnic community (Barth & Zalkat, 2020).
Others have also used their networks for racial marketing and sales, publicity and advertising, as personal and ethnic networks have played an important role in the success of immigrant entrepreneurs in the host country (Enow, 2010). As mentioned before, virtual and digital embedding provides more support than ethnic networks, so some entrepreneurs have used this strategy for sales, marketing, customer relationship, and demonstrating legitimacy (Barth & Zalkat, 2020). Some immigrant entrepreneurs have set up Facebook groups to set up special e-marketing websites and have relied on family members as resources for employment, financial support, and networks (Barth & Zalkat, 2020). This strategy leads to formal or informal business transactions (Barakji & Kalssli, 2017). In other strategies, to overcome the "liability of newness" obstacles, migrant entrepreneurs used the niche market strategy, producing ethnic and exotic products or focusing on customer preferences prevalent in their community (Barth & Zalkat, 2020). On the other hand, Immigrant entrepreneurs enter markets with low barriers and also rely on word of mouth in sales.
In the event of some problems or decisions, they rely on advice from their informal channels such as family members, friends and relatives (Barakji & Kalssli, 2017).
2.6 Disadvantages of the strategies followed by immigrant entrepreneurs
In looking at the Swedish context in terms of the strategies followed by entrepreneurs in overcoming the obstacles faced by them to start their businesses and its success in the host country, we note that there are negative consequences that have negatively affected immigrant entrepreneurship and the integration of immigrant entrepreneurs in the Swedish context.
Ethnic entrepreneurship and niche markets were among the most important strategies followed by many immigrant entrepreneurs, as it helped them overcome many obstacles such as the capital, resources, networks, marketing and sales, but at the same
time, it created structural and cultural barriers to their businesses, in addition, that made immigrant entrepreneurs trapped within an ethnic bubble, which was challenging to overcome and enter the larger society, which hindered the actual integration process for them into Swedish society (Barakji & Kalssli, 2017).
Sometimes they rely on the family for financial resources, employment, network, support, sales, and marketing. They have exploited their ethnic networks to the greatest extent in the service of their businesses. The employment of family members, friends, and relatives had advantages, including flexibility in work relations, financial support from the employment office, increased access to specialised markets, strengthening ethnic solidarity, etc. On the other hand, these strategies also have flaws, as the dependency on family, relatives and friends as a human resource can lead to stressed relations at work due to increased working hours or night shifts or in the absence of a fixed work schedule (Barth & Zalkat, 2020).
Immigrant entrepreneurs have used family members and cultural networks as an alternative to traditional business relationships. However, these networks and ethnic information that migrant entrepreneurs rely on may give imprecise information. This made immigrant entrepreneurs realise the need for public networks that provide them with more relationships and correct knowledge to start their businesses than their ethnic networks (Barth & Zalkat, 2020). On the other hand, the reliance of some entrepreneurs on family members or friends to speak to Swedish customers in their language had a negative role in keeping the immigrant away from learning the Swedish language or not feeling the need for it; this reduced their opportunity to learn more about Swedish culture (Barakji & Kalssli, 2017).
Ethnic products and services have created social and cultural barriers to migrant entrepreneurship; this is because they create value only in their social context and their lack of interest in creating value for other local customers (Barth and Zalkat, 2020).
On the other hand, immigrant entrepreneurs have used the internet as a vehicle for
connect with customers and other necessary entities, and help them gain legitimacy in their markets, which reduced their pursuit and need for real integration in the real society (Barth & Zalkat, 2020).
The family has a significant influence on ethnic entrepreneurship as ethnic entrepreneurs try to reduce the "liability of newness" through several measures, such as employing family members and being their financial source, counselling services, and emotional support (Barth & Zalkat, 2020). Thus, ethnic entrepreneurs have exploited their ethnic networks largely for their businesses. However, at the same time, this ethnic strategy may cause additional structural hurdles for immigrant entrepreneurship in Swedish society, where this ethnic strategy led to poor integration and conflicts as a result of poor communication with Swedish society. In addition to the focus of ethnic entrepreneurs to build trust and good relations with their ethnic context, neglecting the overall context and moving away from it (Barth & Zalkat, 2020).
2.7 Proposed solutions to overcome immigrant entrepreneurship obstacles in Sweden.
Barakji & Kalssli (2017) proposed a set of solutions to help entrepreneurs in Sweden overcome these various obstacles. Intensive Swedish language courses in cooperation with specialised centres such as the Swedish Institute, training immigrants on civil laws in Sweden, and putting forward the issue of educating Swedish traditions. The need to learn more about entrepreneurship in Sweden is considered a vital step to encourage immigrants interested in starting their business in Sweden (Barakji &
From a political perspective, a good understanding from the host country policies of the conditions of immigrant entrepreneurship at the start-up stage helps these policies to provide effective systems of support such as (financial support, monitoring programs, legal support) which in turn helps immigrant entrepreneurs overcome the hurdles of "the liability of newness" (Barth & Zalkat, 2020).
Entrepreneurship supporting organisations play a vital role in immigrant entrepreneurship. They help to overcome obstacles that directly or indirectly affect the success of immigrant entrepreneurship. They provide a connection between customers and suppliers, design business plans and do market analysis, propose potential competitors, leasing procedures and provide various advice. Sometimes they provide financial support when the migrant entrepreneur has at least the appropriate human capital for the effective implementation of the project (Suchkov, 2018). Barth
& Zalkat (2020) emphasised the need for companies to adapt in the digital age to new technologies while expanding customer and supplier networks. On the other hand, to be more integrated into society, the immigrants need to use the host country's moral codes, language, and narratives (Aaltonen and Akola, 2012).
In the end, the great emphasis on entrepreneurship among the immigrants may lead to a significant contribution, in the field of entrepreneurship, of immigrants. This phenomenon is important from social and economic perspectives (Suchkov, 2018).
3.1 Scientific research approach
According to Bryman & Bell (2015), there are three main methods of collecting knowledge and information: inductive, deductive, and abductive methods. These methods describe the relationship between empirical and theoretical. The Inductive method relates to observation and obtaining experimental results during the study. The presence of a large number of observations is important for the reliability of the results. In other meaning, several observations confirm the same thing. The deductive method relates and focuses on investigating various theories that have a relationship and relevance to the research subject, where the theories are included and described before continuing the study. Theories are not compared to empirical results but rather can confirm or reject the theories that have been developed. The abductive method is a combination of the two methods. The researcher uses both inductive and deductive methods during the study so that this method gradually forms an understanding of the topic (Bryman & Bell, 2015). In our research, the abductive method was chosen.
The theoretical part of our study begins with reading literature, articles and scientific research to obtain a solid scientific background and the knowledge which enables us to have a good understanding of the topic. Literature review (SLR methodology); This technique aims to identify and obtain high-quality, reliable, and credible scientific research relevant to the topic of the research we are doing (Petticrew & Roberts, 2006). I tried to use specific and very related terms for research and problem to get related articles. I used the university's electronic library to ensure the safety and reliability of references. Examples of terms that I used in my research are immigrant entrepreneurship, obstacles and strategies, Sweden, immigrant entrepreneurials in Sweden, immigrant entrepreneurship problems, or obstacles in Sweden. In addition, the Snowball method to search was used; this means when reading articles close to my research goal, it is possible to find some references or related articles for this article, and I used it. It was beneficial (Van Aken, Berends and van der Bij, 2018).
3.2 Research method approach (Data Collection)
The collection of empirical data for scientific research takes place in two ways quantitative and qualitative research methods:
Quantitative research methods focus on numbers and enable the researcher to have a great deal of control over the data collected. It is collected through surveys, from interviews, and from analysing measurable data.
Qualitative research methods focus on words instead of numbers, where the theories are generated during experimental research. In the qualitative approach, the cognitive orientation is interpretive, and the generalisation approach is limited, which leads to the difficulty of re-surveying. The qualitative research strategy is influenced by the ideas and opinions of the researcher (Bryman & Bell 2017).
In our thesis, we chose a qualitative research strategy for several reasons, including the ability to move between theory and experimentalism, and this strategy works well with an inductive approach. Moreover, in addition to focusing on soft data and presenting and collecting data from various sources, it is also flexible (Bryman & Bell 2017). One of the most important reasons is that our research needs a deep understanding to discover and understand the problems faced by immigrants with an entrepreneurial background in starting their businesses and using their experiences in Sweden and a deep understanding of their problems and solutions. The quantitative methods in our research will not fulfil this purpose and will not form a deep understanding of the study subject, problems, feelings, and motivations of the target groups. It also needs an extensive sample (Bryman & Bell 2017).
According to Bryman & Bell (2015), the main qualitative research steps start from developing general research questions that may change or evolve during the study,
then selecting topics related to research and study. Next, we can begin to collect data related to our topic and then interpret these data. Later, developing a theoretical and conceptual model may modify the research questions to be more appropriate or more specific and perhaps collect more data. The last step is writing conclusions that must convince the audience that they are relevant, meaningful, and credible.
In our research, data is collected through qualitative research methods. Therefore, we chose semi-structured interviews (Life story) in several forms, by plone or online internet meetings (Via Zoom, Google meet, .etc.). We had seven interviews of immigrants with an entrepreneurial background or skills and business experiences from their home country and lived in Sweden for more than five years. Unfortunately, all our interviews were online due to Corona Pandemic measurements. However, this allowed us to interview many participants and make it easy to get back to them for further information; something can not be done by face-to-face interviews (Bryman
& Bell 2015).
3.3 Type of data and collection
In our study, the research questions will be answered by collecting primary and secondary data and then using this data to answer the research questions and achieve the purpose of our research.
Primary data through Life story interviews
We chose life story to collect primary data because obtaining what is unique and distinct in our research is our goal (Johansson, 2005).
Secondary data through literature
Secondary data was collected through research, articles, books and scientific journals.
All sources in our research are subject to review and are trustable. Most of our resources from the Linnaeus university library. According to Bryman & Bell (2015),
secondary data are accessible data previously collected by other scientists and researchers.
Qualitative interviews are divided into structured, unstructured and semi-structured interviews. In unstructured interviews, interviews do not contain predetermined questions, and there is no specific order of questions that the researcher follows during the interview, in addition to the fact that the interviewer does not try to control the course of the matters during the interview to obtain an accurate picture of the topic as much as possible. It is somewhat similar to a regular conversation but provides the interviewer with excellent and valuable information (Bryman & Bell, 2015). For semi- structured interviews, they are somewhat similar to unstructured interviews, as they give the interviewee freedom to answer the questions in terms of the possibility of different questions and terms of design, and the possibility of changing or modifying them during the study, but they differ in terms of control, where the interviewer with these interviews can control the interviews and adjust the path to suit with the research focus or purpose of the interview. In addition, several topics are previously identified in semi-structured interviews. Qualitative interviews are divided into structured, unstructured and semi-structured interviews (Bryman & Bell 2015).
The narration method (life story) suggested by Johansson (2005) was chosen for data collection as a type of Semi-Structured qualitative interviews. An advertisement for the project was placed on the social media channels (Facebook and LinkedIn), where I added a video in which I talked about my thesis, its goal, and my need to meet people who match the target research sample. There was an immediate response from dozens of people. After an initial conversation with about 15 persons, I selected the most suitable ones for the research purpose and the target group (immigrants with an entrepreneurial background who had resided in Sweden for at least five years).
There was complete satisfaction from the interview candidates and great interest, which led me to believe more in my project and its relevance to the problems of this group. Then I began to communicate with the selected group, where I introduced
myself and information about my studies, the research ethics, the confidentiality of the information and the respect for privacy. Before the actual interview, there was a telephone interview to create conditions and provide a more detailed description of the survey and its approach. The candidates were motivated to provide any information that helps in the research study. Their interpretation and vision of the problem are critical to me. The interviews were booked with close dates, one or two interviews per day at most. Each interview lasted for 60 to 90 minutes depending on what the interviewees wanted to tell about their story without any pressure to ensure no control over the candidates and for the life story to be formed by them themselves.
Arabic was used in all the interviews, as it is the mother tongue for them and me, so it was easier to understand all the stories in detail. I wrote them down in Arabic and later translated them.
The interview starts with one of the common questions for this type of interview: If you were to describe your life in a book, what would this book contain?. An interview guide was used when needed, then follow-up questions were asked based on the candidates' responses, which means that there was no similar interview to the other.
To get a good result from the interviews, we asked all candidates two questions:
1- Was it okay to talk about your story and problem?
2- Is there anything that you would like to add, feel necessary, or need more explanation?
The two questions are essential as they reflect what it means to investigate sensitive matters for the interviewees, such as failure in their process, their feelings and explanations.
In terms of documenting the interview, we had various ways to document the interviews, such as recording. I tried to avoid the flaws of voice recording by using a modern Asus computer and iPhone device, both of which have relatively good functions at recording. In addition, I tried to make the interview places quiet and comfortable for us, so I chose daytime times when my children were in school.
Finally, after the candidates agreed, I recorded the interviews online via the meeting