Nov 05, 2010
Social and business networking is essential to rural-based ethnic entrepreneurs if they are to become more profitable, according to a first-of-its-kind survey by the California Center for Rural Policy (CCRP) at Humboldt State University, partnered with HSU’s Institute for Spatial Analysis.
Networking is vital, the survey says, because it is the indispensable building block for close ties with the larger business community and economic developers.
“Rural Ethnic Entrepreneurship: A Spatial Networks Approach to Community Development” combines for the first time GIS (geographic information system) spatial data from the Institute for Spatial Analysis with data from HSU’s Department of Economics to profile ethnic entrepreneurs in Mendocino County. Uniting the two sets of data showed that the factor most often associated with a profitable business is intensive networking.
But the analysis also reveals that ethnic entrepreneurs in rural settings are less likely, for example, to use the Internet for business guidance. Often hobbled as well by the limited infrastructure and geographical isolation of rural life, they are more apt to rely for advice and counsel on family and relatives, or on church and school contacts, than on their local business community or the Chamber of Commerce. They think of themselves as making a living rather than building an evolving enterprise.
Nonetheless, those surveyed welcomed the prospect of business mentoring.
Financed by a $150,000 Ford Foundation grant, “Rural Ethnic Entrepreneurship” is based on detailed research of Mendocino County because it is considered representative of rural northern California’s ethnic entrepreneurial needs and Latino business experience.
One of the key findings is the need for tighter links between ethnic enterprises and economic development initiatives. This is particularly important in regions like the redwoods, where rural business is shifting from a resource-based extraction economy to entrepreneurial niche enterprises that pivot on high technology and human capital.
“We found that many ethnic entrepreneurs would welcome business advice and guidance on running a successful business, but this may be unknown to local community developers due to language and cultural barriers,” say co-authors Professor Sheila Lakshmi Steinberg, Director of CCRP Community Research; Professor Steven J. Steinberg, Director of HSU’s Institute for Spatial Analysis; and Professor Erick Eschker, Director of the Humboldt Economic Index. They add: “Engaging with key members of the ethnic or cultural community early in planning for community and economic development is essential, and will lead to better results later on.”
The study recommends moving beyond economic development geared to ‘one size fits all.’ Multiple ‘sizes’ are needed. To meet that need, “Rural Ethnic Entrepreneurship” is available at a new Web site, http://peopleplaceandbiz.org, that features an interactive exercise for pinpointing who is missing from the economic development table.
“We expressly designed this new Web site to serve as a practical tool for community economic developers, providing them with guidance on how to engage with communities who are not at the table,” the Steinberg’s said.
They call the interactive ‘biz tool’ they developed “Seven Steps for Successful Community Economic Development.” Using a baseball motif, it guides the user through such exercises as “Who is watching the game?” The Steinberg’s developed it based on their work experiences with marginalized groups.
The Web site also has all of the reports, shorter conference papers and posters developed by the CCRP under the Ford Foundation grant.
As for networking itself, the professors explain, “Determining the types of networks that a certain group most often participates in is something to consider when developers create a strategy for engaging ethnic entrepreneurs and people of different socio-economic backgrounds.”
Data on ethnic entrepreneurs are lacking at the community, regional and state levels, the HSU analysts found. They recommend that development agencies act promptly to close the information gap to help foster networking.
“The data clearly show that businesses which are better networked are more successful in terms of greater profitability and more job growth,” Humboldt Economics Index Director Eschker said.
At the most basic level, the CCRP report calls on economic developers to broaden their notion of who an entrepreneur is. “Ethnic and poor populations may not classify or self-identify themselves as ‘entrepreneurs,’ due to cultural or socioeconomic differences.”
It also recommends:
“Rural Ethnic Entrepreneurship” is available in full at http://peopleplaceandbiz.org and on the CCRP Web site at http://www.humboldt.edu./ccrp.