This review provides a brief survey of scholarly literature and government publications of interest to the REAPontario project, including a full bibliography.
It is divided into the following sections: background; entrepreneurship; immigration to smaller population centres; immigrant entrepreneurs and economic development; and rural small businesses.
Value-added Contributions of Immigrant Entrepreneurs to Rural Ontario’s Economic Development
Background, Impact and Scope
Entrepreneurial activities are recognized as a way to stimulate economic and rural development (Beugelsdijk 2007; Barreira 2004; Drabenstott, Novack, and Abraham 2003). Locally-owned businesses are vital in smaller and rural areas for the economic wealth they help generate and as centres of social connection and vibrancy. Self-employment rates are higher in rural and small town Canada, and self-employed are closer to retirement age than salaried workers (Bollman and Alasia 2012). Many are agricultural producers, though approaches to getting exact numbers are varied. (Proposed research will generate better data.)
Given aging populations and out-migration by young people, immigration may help offset population decline and also revitalize local economies. The proposed research examines the net attraction, retention and growth response for SME immigrant entrepreneurs (IE’s) in rural Ontario, including case studies of IE agri-food value chains to explore effectiveness of current policies and programs in meeting needs of rural SMEs. It builds on the momentum generated by such disparate initiatives as Ontario’s first-ever Immigration Strategy, released late 2012; Community Immigrant Retention in Rural Ontario (CIRRO); and Advantage Ontario, the Ontario Jobs Prosperity Council report calling for a stronger culture of entrepreneurism.
The literature on IE’s in rural areas and smaller communities is limited, especially regarding agri-food value chains. The proposed research will be a valuable contribution to knowledge for Ontario policymakers and others.
Individuals become entrepreneurs for a variety of reasons, including opportunity and necessity, or failure to secure waged employment (Baldacchino 2008). Entrepreneurship is embedded within a larger context that influences the frequency, type and success of entrepreneurs. Whereas many studies look at the ‘supply side’ of entrepreneurs only, a more comprehensive approach takes into account the ‘demand side’ and involves multiple levels of analysis (national, regional, local), including the influences of policies, markets, networks, and more (Kloosterman 2010; Kloosterman and Rath 2003; Kloosterman and Rath 2001; Low and McMillan 1988; Davidsson and Wilkund 2001; Aldrich and Martinez 2001). For immigrant entrepreneurs, transnational networks and opportunities may also be important (Wong 2004), in addition to other networks such as family, collegial, and ethnic (Salaff, Greve, and Wong 2006).
Immigration to smaller population centres
Smaller communities have identified immigrants as a potential source of population and labour force renewal (Bollman et al. 2007; Beshiri and He 2009). Immigrants often settle where they have family and friends, but they are also attracted by the economic vitality of a community, presence of educational institutions, and proximity to larger urban areas. This poses challenges for smaller communities which have proportionally fewer immigrants and may lack infrastructure to facilitate immigrant settlement, including language services (Reimer 2007). Key factors influencing recruitment and retention include employment opportunities, social support, lifestyle preferences, language, amenities, community response, opportunities for professional advancement, and opportunities for spouses (Reimer 2007; Walton Roberts 2007; DiBiase and Bauder 2005; CIC 2001).
Population movements are highly influenced by regional economic growth rates. A Statistics Canada study found recent immigrants responded much more strongly to the economic boom in Alberta than did non-migrants and longer-term immigrants. Economic incentives appear to play a significant role in the behaviour of immigrants, especially recent immigrants (Ostrovsky, Hou, and Picot 2011). In the longer term, settlement and integration are positively correlated with the presence of a developed and diversified economic base (Laaroussi and Walton-Roberts 2005). According to Smart (2003), immigrant entrepreneurs need to be mobile (change jobs) in order to gain the technical, management, economic and business skills to be successful entrepreneurs.
Even immigrants desiring to start farm operations face barriers to accessing transportation, land, capital, and information about opportunities (Janz, Dietrich-O’Connor, Stewin 2012).
Rural Canadians often lack familiarity with immigrants and IE’s. A recent Ford Foundation report cites “distrust of newcomers” (including native-born) as a challenge to the successful development of rural economic clusters (Regional Technology Strategies 2009: 60). Yet immigrants may enjoy various benefits of living in small communities, including faster language acquisition, better economic outcomes for less-educated immigrants, and faster integration of refugees (Bernard 2008). Interviews with 60 IE’s in PEI found them attracted by “wonderful attributes” including affordable housing, stunning landscape, vibrant civil society, slower pace of life, easier access to provincial infrastructure, safety, and ideal family place (Baldacchino 2008).
In brief, attraction and retention is built on several key factors, most notably economic opportunities and acceptance and inclusion into the receiving community. Rural areas could better market the amenities they do have, and create more welcoming communities (CRRF and RDI 2005; OIN 2012; National Working Group on Small Centre Strategies 2007; Triple S. Community-building 2005; see also Welcoming Communities and Local Immigration Partnership initiatives).
IEs and rural economic development
The limited research on the effectiveness of encouraging entrepreneurship in rural areas indicates that differences do exist from urban areas (Dabson et al. 2003; Renski 2009). In the USA, small business creation and development are viewed as positive regional economic development strategies, particularly for rural areas (Johnson & Rasker 1995; Kauffman 2003; W. K. Kellogg Foundation, 2001). A study measuring entrepreneurial potential in rural areas suggests that foreign-born residents provide regions with more entrepreneurial depth (Low, Henderson, and Weiler 2007). A recent study of Mexican entrepreneurs in American rural areas who previously owned businesses provided “an unrealized pool of talent and experience” and their transnational networks boosted their business capacity (Farmer and Moon 2011).
Initiatives by all levels of government can have an impact in immigrant attraction (CIC 2001; Reimer 2009).
Smallbone, Baldock and North (2003) argue that policies for rural areas need to be attuned to the distinctive characteristics (in terms of size) and needs (especially in terms of access to business service) of small rural businesses. This would include:
- systematic evaluation of whether business support programs address and are used in rural areas;
- policies assisting rural enterprises with market development, exporting, and marketing, to grow external markets; and
- improving training and use of information and communications technology (ICT), to better use technology in production, marketing and workforce management.
The same authors further develop their thinking by conducting case studies of 10 “peripheral” local economies in five European countries to identify policies that might enhance rural entrepreneurial capacity. They conclude that policies need to be developed with local input, be consistent across levels of governance, encourage diversification of enterprises, and help entrepreneurs overcome barriers to new technologies. They call for investing in the areas of knowledge and education, as well as physical and social infrastructure (North and Smallbone 2006).
These findings reinforce the importance of using a policy lens and awareness that the experiences of immigrant entrepreneurs are embedded within the broader structures and social relations of the societies in which they settle (Kloosterman and Rath 2001). A complex policy response is required to address the diversity of pathways to immigrant entrepreneurship, of resources brought by immigrants, and of networks that they use (Collins 2008).
The proposed research focuses on immigrant entrepreneurs in agri-food value chains that are “designed to increase competitive advantage through collaboration in a venture that links producers, processors, marketers, food service companies, retailers and supporting groups such as shippers, research groups and suppliers” (OMAF definition). There is a large literature on value chains, and even on agri-food value chains, but no literature was found on immigrant/ethnic-based chains. Yet it appears that value chains for IEs may look very different from non-immigrant, such as by making use of ethnic networks and transnational connections. Some value chains contain both immigrants and native-born, and these have not been studied either.
Rural small businesses: challenges and strategies
Small business owners in rural areas face particular challenges, including market area, labour availability, access to urban centres, infrastructure gaps, and long hours. In a rare scholarly article addressing these challenges, the author encourages governments to pursue policies which improve transportation and network infrastructure, encourage people to remain living in rural areas, and provide more educational and training opportunities for all rural residents, but not to place more focus on loans and grants (Siemens 2010).
In their review of newcomers and services in Brandon, Manitoba, Zehtab-Martin and Beesley (2007) suggest implementing a “navigator system” that matches immigrants to a person or agency for orientation and follow up. The matching should take place at the pre-migration stage. They also suggest expanding the use of cooperatives to include immigrants.
Business networks are another way to overcome challenges. Small businesses in small communities benefit from membership in formal networks (Miller, Besser, and Malshe 2007). These networks help them overcome the limitations and challenges associated with scale and remoteness. Young (2010a) concluded that SMEs are more likely to succeed in rural areas if they are “well-networked and well-integrated into local customs” and institutions. Business networks do not have to be local and place-based. Non-local ties, including transnational ones which are of obvious relevance to immigrant entrepreneurs, can also be important. This is supported by Virkkala’s (2007) research on the ICT sector in rural Finland. One factor helping SMEs to innovate and succeed in geographically distant areas was the presence of clients located outside the SME’s region.
Aldrich, H.E., and M.A. Martinez. 2001. Many Are Called, but Few Are Chosen: An Evolutionary Perspective for the Study of Entrepreneurship. Entrepreneurship Theory and Practice 25 (4): 41-56.
Baldacchino, G. 2008. Immigrant entrepreneurs on the gentle island. Chamber Business Magazine. Retrieved March 30, 2013, from http://www.charlottetownchamber.com/downloads/immigrationpaper.pdf
Barreira, J.C.D. 2004. The Influence of Business Knowledge and Work Experience, as Antecedents to Entrepreneurial Success. University of Pretoria.
Bernard, André. 2008. Immigrants in the Hinterlands. Statistics Canada Perspectives on Labour and Income (January).
Beugelsdijk, S. 2007. Entrepreneurial Culture, Regional Innovativeness and Economic Growth. Journal of Evolutionary Economics 17 (2): 187-210.
Beshiri, R. and J. He. 2009. Immigrants in Rural Canada: 2006. Statistics Canada Rural and Small Town Canada Analysis Bulletin, 8, 2, Catalogue no. 21-006-X.
Bollman, R.D. and A. Alasia. 2012. A profile of self-employment in rural and small town Canada: Is there an impending retirement of self-employed business operators? Statistics Canada Rural and Small Town Canada Analysis Bulletin 9, 1, Catalogue no. 21-006-X.
Bollman, R.D., R. Beshiri,and H. Clemenson. 2007. Immigrants to Rural Canada. Pp. 9-15 in B. Reimer (Ed.) Our Diverse Cities: Rural Communities, Toronto: Metropolis, Number 3, Summer.
Canadian Rural Revitalization Foundation (CRRF) and Rural Development Institute (RDI). 2005. Immigration and Rural Canada: Research and Practice. National Rural Think Tank 2005.
Citizenship and Immigration Canada. 2001. Towards a More Balanced Geographic Distribution of Immigrants. Strategic Policy, Planning and Research.
Collins, J. 2008. Immigrant entrepreneurs in Australia: Regulations and responses, in Oliveira, C.R. and J. Rath (eds.), Migrações Journal – Special Issue on Immigrant Entrepreneurship, 3: 49-59.
Dabson, B., J. Malkin, A. Matthews, K. Pate, and S. Stickle. 2003. Mapping Rural Entrepreneurship. W. W. Kellogg Foundation, Corporation for Enterprise Development.
Davidsson, P. and J. Wiklund. 2001. Levels of Analysis in Entrepreneurship Research: Current Research Practice and Suggestions for the Future. Concepts, Theory and Perspective: 245.
Di Biase, S. and H. Bauder. 2005. Immigrant Settlement in Ontario: Location and Local Labour Markets. Canadian Ethnic Studies 37(3): 114-135.
Drabenstott, M., N. Novack, and B. Abraham. 2003. Main Streets of Tomorrow: Growing and Financing Rural Entrepreneurs-a Conference Summary. Economic Review-Federal Reserve Bank of Kansas City 88 (3): 73-84.
Dumais, R. 2009. Immigrant settlement outside of the greater Toronto area: Determinants of desirability. Theses and dissertations. Paper 567. http://digitalcommons.ryerson.ca/dissertations/567
Farmer, F.L. and Z.K. Moon. 2011. Mexican Migrant Entrepreneurial Readiness in Rural Areas of the United States. Journal of Rural and Community Development 6 (2): 85-103.
Janz, K., F. Dietrich-O’Connor, and E. Stewin. 2012. Immigrants, Agriculture, and Settlement Outside the GTA. University of Guelph. Retrieved March 30, 2013 from http://theresearchshop.ca/Resources
Johnson, J. D. and R. Rasker, R. 1995. The role of economic and quality of life values in rural business location. Journal of Rural Studies, 11(4): 405-416.
Kauffman, F. 2003. Grassroots Rural Entrepreneurship: Best Practices for Small Communities. Washington, D.C.: National Center for Small Communities.
Kloosterman, R.C. 2010. Matching opportunities with resources: a framework for analysing (migrant) entrepreneurship from a mixed embeddedness perspective. Journal Entrepreneurship and Regional Development 22: 25-45.
Kloosterman, R. and J. Rath. 2001. Immigrant entrepreneurs in advanced economies: mixed embeddedness further explored. Journal of Ethnic and Migration Studies 27 (2): 189–202.
Kloosterman, R., A. Russell, and J. Rath (Eds.). 2003. Immigrant Entrepreneurs: Venturing Abroad in the Age of Globalization. Bloomsbury.
Krahan, H., Derwing, T.M., & Abu-Laban, B. (2005). The retention of newcomers in second and third-tier Canadian cities. International Migration Review 39(4): 872-894.
Laaroussi, M. and M. Walton-Roberts. 2005. Introduction, Special Issue: Thinking about Immigration outside of Canada’s Metropolitan Centres, Canadian Ethnic Studies 37(3): 1-5.
Leach, B., K. Preibisch, J.-P. Sousa, A. Leadbetter, and C. Yates. 2007. Diverse Workplaces, Homogeneous Towns: Some Preliminary Findings from Rural Southern Ontario, Our Diverse Cities, 4: 115-120.
Low, M. and I. MacMillan. 1988. Entrepreneurship: Past research and future challenges. Journal of Management 35: 139-161.
Low, S., J. Henderson, and S. Weiler. 2007. Gauging a Region’s Entrepreneurial Potential. Federal Reserve Bank of Kansas City, Third Quarter 2005.
Miller, N.J., T. Besser, and A. Malshe. 2007. Strategic Networking among Small Businesses in Small US Communities. International Small Business 25(6): 631–665.
National Working Group on Small Centre Strategies 2007. Attracting and Retaining Immigrants. A Tool Box for Smaller Centres. Retrieved Feb. 2010 from: http://www.icavictoria.org/community/toolbox-ideas-0 , http://integration-net.ca/english/ini/wciidca/tbo/index.htm
North, D. and D. Smallbone. 2006. Developing Entrepreneurship and Enterprise in Europe’s Peripheral Rural Areas: Some Issues Facing Policy- makers, European Planning Studies 14 (1): 41-60.
Ontario Immigrant Network. 2012. The Role of Immigrants in Rural Business Succession. Presented to Ontario Ministry of Training, Colleges, and Universities. 52pp.
Ostrovsky, Y., F. Hou, and G. Picot. 2011. Do Immigrants Respond to Regional Labor Demand Shocks? Growth and Change 42 (1): 23–47.
Partridge, M.D., M.R. Olfert and K. Ali. 2009. Towards a Rural Development Policy: Lessons from the United States and Canada, Journal of Regional Analysis and Policy 39 (2): 109-125.
Reimer, B. 2007. Immigration in the new rural economy. Our Diverse Cities: Rural Communities, 3: 3-8.
________. 2009. Rural Canada: challenges and opportunities. 18pp. http://www.fcm.ca/Documents/reports/Rural_Canada_Challenges_and_Opportunities_EN.pdf
Regional Technology Strategies, Inc. 2007. Generating Local Wealth, Opportunity, and Sustainability through Rural Clusters. in Reimer, B. (ed.), Our Diverse Cities: Rural Communitiies, 3.
Renski, H. 2009. New firm entry, survival, and growth in the United States: A comparison of urban, suburban, and rural areas. Journal of the American Planning Association 75(1): 60-77.
Salaff, J., A. Greve, and S.-L. Wong. 2006. Business Social Networks and Immigrant Entrepreneurs from China, in E. Fong and C. Luk (eds.), Chinese Ethnic Economy: Global and Local Perspectives. London, UK: Routledge.
Siemens, L. 2010. Challenges, Responses and Available Resources: Success in Rural Small Businesses, Journal of Small Business and Entrepreneurship 23 (1): 65-80.
Smart, J. 2003. Ethnic Entrepreneurs, Transmigration and Social Integration: An Ethnographic Study of Chinese Restaurant Owners in Rural Western Canada. Urban Anthropology 32: 3-4.
Smallbone, D., R. Baldock and D. North. 2003. Policy support for small firms in rural areas: the English experience. Environment and Planning C: Government and Policy 21: 825-841.
The Ontario Rural Council (TORC). 2007. Fostering Entrepreneurship in Rural Ontario: Exploring new and existing approaches for the enhanced support of our rural entrepreneurs. Presented in partnership with Ontario Ministry of Agriculture, Food and Rural Affairs and Ontario Ministry of Small Business and Entrepreneurship. Guelph: The Ontario Rural Council.
Triple S. Community-building. 2005. Smart Settlement: Current Dispersion Policies and a Community Engagement Model for Sustainable Immigrant Settlement in Ontario’s Smaller Communities. A PROMPT Discussion Paper. Toronto: Policy Roundtable Mobilizing Professions and Trades (PROMPT).
Virkkala, S. 2007. Innovation and Networking in Peripheral Areas – a Case Study of Emergence and Change in Rural Manufacturing. European Planning Studies 15 (4): 511-529.
W. K. Kellogg Foundation. 2001. Perceptions of Rural America.
Walton-Roberts, M. 2007. Immigration Regionalization in Ontario: Policies, Practices and Realities. Our Diverse Cities, 4: 13-19.
Wong, L. L. 2004, Taiwanese Immigrant Entrepreneurs in Canada and Transnational Social Space. International Migration 42: 113–152.
Young, N. 2010a. Business Networks, Collaboration and Embeddedness in Local and Extra-local Spaces: The Case of Port Hardy, Canada, Sociologia Ruralis 50 (4): 392-408.
________. 2010b. Globalization from the edge: a framework for understanding how small and medium-sized firms in the periphery `go global’, Environment and Planning 42: 838-855.
Zehtab-Martin, A. and K. Beesley. 2007. Immigrant Service Gaps in a Small City: Brandon, Manitoba. Our Diverse Cities, 2: 75-79.