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Scanlon essay – migrants driving Australia’s small business sector

27 April 20210 comments

A new essay from the Scanlon Institute looks at the how migrant run small businesses are vital contributors to Australian neighbourhoods and are at the forefront of the nation’s economic and social recovery from the COVID-19 pandemic.

The essay, by social researcher Trish Prentice, reveals that more than a third of Australia’s small businesses – or about 620,000 of them – are run by first or second-generation migrants.

Interestingly, more than 80 percent of these small business owners did not own a business before coming to Australia.

The essay looks at their experiences of establishing a new life here that led them into the small business sector and how, whether culturally, linguistically, religiously or through other forms of diversity, they are shaping our communities.

Small business is an important part of the Australian economy. Described as the country’s economic ‘backbone’, small enterprise accounts for more than a third of Australia’s gross domestic product, it says.

“In recent years, small businesses they have created $414 billion of industrial value and employed 44 percent of Australia’s workforce,” the essay says.

More than 97 percent of employing businesses are small businesses – playing a huge role in Australia’s economic performance.”

The essay includes the stories of individual migrants who have chosen lives in small business including John, who runs a traditional Italian eatery on Melbourne’s famous Lygon Street and Haipai, from China, who has set up an ‘urban health sanctuary’ using alternative medical treatments.

“Individuals come to own small businesses for many reasons. Some, like John and Haipei, are pulled into the sector by a love of what they do and a desire to share it with others,” the essay says.

“Some are aware of a community need and step in to meet it. Some are motivated by ‘personal ambition’, ‘a sense of achievement’ or by a need to have ‘greater personal control over their affairs’,” it says.

Others are pushed by economic factors, such as a lack of work or exclusion from other employment pathways.

“Research suggests this experience is common: 16 per cent of small business owners from diverse cultural backgrounds move into small business because they cannot access other employment,” the essay says.

Individuals from Middle Eastern and Asian backgrounds are reported to face particular difficulties, having to submit twice the amount of job applications as other applicants to receive a call back from an employer.

Other factors, such as a person’s previous employment, family context, gender, educational attainment or ethnic background can also play a role.

The essay says small business owners from migrant backgrounds, especially those who are newly arrived, face greater challenges than other business owners.

“They must develop a good knowledge of the local culture, institutional environment and language, and legal and bureaucratic obstacles,” it says.

The essay argues that as Australia emerges from the COVID-19 pandemic, one pillar of the economic and social recovery is the small business sector.

“They are essential for community building. Without them, the urban environment fails to nourish the kinds of relationships and the diversity of human contact that are the essence of the city.

“Without them, our neighbourhoods would lack individuality and vitality. With these businesses and the people who run them, our communities have the colour and character that make them feel like home,” it says.

Read the full essay here: