The objects of our attention in the process of field research were Armenians who are engaged in the footwear business. The research was conducted using the method of participant observation in production and repair workshops of Petersburg and recorded in diaries. In some cases the observation was supplemented by in-depth interviews; a series of expert interviews was also carried out.

Today, according to the estimates of our informants and several experts, up to 70% of those employed in the supply, small-scale manufacturing, and repair of shoes are Armenians. What is behind these statistics? Does this mean that we can speak of ethnic enterprise? The material that we assembled does not fit entirely into any one of the concepts of Western sociology concerning ethnic enterprise (for example, Light, 1984; Waldinger, 1986, etc.). However, it is not our objective in this report to enter into a scholarly discussion or to elaborate our own concept – the framework of the work and in a certain sense the narrowness of the field do not permit us to do this. We consider it more important here to describe the market niche that we studied and to show what role ethnicity plays in this business, which we, adhering to the constructivist theoretical tradition, understand as a social construct (Voronkov, Oswald, 1998).

The social-economic situation in Russia in the late 1980s and early 1990s led to the emergence and intensive growth of private production and repair of shoes. On the one hand, this was encouraged by the population's increasing demand for this kind of production and service. The footwear industry of Leningrad and the Leningrad Region in the 1980s was wholly concentrated in a unified organisational structure - LPO “Skorokhod”, whose production in the consumer market was rated very low, so that shoe manufacture went into decline earlier than most other trades and in the new economic conditions turned out to be altogether non-competitive. Shoe repair was in the jurisdiction of the shoe company “Neva”, workshops were included in one of its branches, stalls in another (the so-called “cold” repair). Their network was unevenly developed. In the absence of imports the situation was aggravated by the total deficiency typical of the Soviet economy.

On the other hand, the processes of this period became the conditions for the most important factors of private production to take shape: new economic legislation and privatisation provided freedom of enterprise, hyperinflation led to the appearance of necessary free capital, and mass migration and the structural crisis of state industry satisfied the demands of small business for free work-power, including a qualified work force.

Until the mid-1990s, that is, until the influx of cheap imported footwear onto the Russian market, there was intensive development in the sphere of repair and small-scale manufacture of shoes. This niche was filled by people seeking (often forced to do so) new economic strategies. The Armenians comprised a significant part of these – both those who had settled in Petersburg earilier, and new migrants. According to the testimony of our informants, at that time this business was very profitable: “I was simultaneously involved with planning work, and the store was also a shoe workshop, and when I took a look, in general, the shoe workshop brought in perhaps no less income that any other business” (from an interview with a “Petersburg” Armenian, owner of several workshops). Our informants ascribe the saturation of the market to the second half of the 1990s: the profitability of the business fell and its intensive growth ceased.

It must be emphasised that the manufacture and repair of shoes, as a rule, are non-intersecting spheres, which were formed independently of each other. Each of these types of work requires different resources, and a person's choice of one of them depends above all on which networks he is integrated into.

Shoe repair as a trade does not presuppose, first, a prolonged special training (all the informants said that two weeks was the maximum period for learning it), and second, significant initial capital. This attracts to repair work the first forced migrants – Armenian refugees from Azerbaijan, whose resources are very limited.

In order to enter this market niche, above all it is necessary to have connections within the sphere of shoemakers already functioning in the city: it is necessary to have somebody to teach one the trade, “put him in place”. As a rule, our informants used for this the networks of relatives or, more rarely, of people from the same district. Properly speaking, the resources that the networks possess determine, and at the same time restrict, the migrants' choice of spheres of activity: “What else is there to do? I won't become a stevedore. Either I make glass /the informant's profession in his homeland – the authors/, or I'll learn what they can teach me. I can't go up to any passerby, let's say, and say: “What work do you do? Teach me your trade”… My brother says: I'll teach you, and you'll work, you'll learn, I'll get a stall for you” (from an interview with a refugee from Azerbaijan).

We know of cases when ethnicity was used as a resource at the stage of integration into the economic niche. Thus, for example, our informant (a “Petersburg” Armenian, proprietor of a workshop), responding to a request for help, several times hired refugees from Azerbaijan, including those who did not have a trade. But the experience was so unsuccessful that later the decision was taken “not to hire Armenians”. When it is necessary to hire personnel now the owner turns to a school that trains specialists in repair work.

We suppose that this is a specifically “Armenian” situation. The point is that the events that shook Armenia and Armenians at the end of the 1980s – the ethnic conflict in Azerbaijan, the earthquake in Armenia – made ethnic identity topical, mobilised and consolidated the Armenian community in Leningrad, while the idea of solidarity laid at the base of the communal collective identity that had been developed (Brednikova, Chikadze, 1998:231-234; Voronkov, Oswald, 1998:22-24). Therefore the expectation of trust, based on ideas of ethnic solidarity, was inherent in the actions of several of our informants, especially those who earlier in their economic practice did not encounter fellow countrymen, that is, “Petersburg” Armenians. This permitted migrants to use ethnicity as a resource.

Later, the expectation of trust collapses, and ethnic solidarity is supplanted by professional rationality: “I can trust my brother, he trusts me, you understand. Whoever he might put in this place, he can't trust him, life's like that. Not because the person is bad... well, money is money. An Armenian was sitting here up to now, he left. Now we just chased out an Armenian from another spot. Well, he just drinks” (from an interview with a “Petersburg” Armenian).

Informants chose different strategies depending on resources and personal inclinations. Some, having become owners of a workshop or stall, stopped repairing shoes themselves, expanding the business to the establishment of a small network of workshops (in the language of our informants this is called “getting up from the stall”). Others, as before, are engaged in the trade, while sometimes as renters, and not owners of stalls.

Today the repair of footwear has ceased to be such a profitable business as in the first half of the 1990s: “With each year it gets worse and worse, much worse... I understood that the shoemaking business soon will simply be unnecessary, you understand. Why, because now /…/ they've filled the market with Chinese shoes that cost 25.000 /the interview was conducted in 1998 – the authors./. A person doesn't come to me, doesn't give a heel, you understand, for 12.000, if he can get 13 and go to buy new shoes. And rich people, first, they don't come often, second, even if they do give shoes for repair, after all they're like this: they wear them awhile, they replaced the first heels, they already throw out the second ones, as was said, that's all. And then, a normal person doesn't go to such a stall, he goes to a good workshop. He pays money and he's going to think that they'll do good work for him there. /…/ You've been sitting here an hour already, exactly. Did even one person come? No. And that's the whole job. And earlier, /…/ four years ago, when I sat here I came here at 6:00 in the morning, in order to get through what I took on the day before… But now that's all over”. This quote is from an interview with a refugee from Azerbaijan working in a stall. Matters stand differently with workshops not only for the reason indicated by the informant – they bring in greater income also because of the variety of services offered. Work in a stall, especially for recent migrants, who have problems with housing, today has become a peculiar trap: the earnings are scarcely enough to resolve urgent problems, but “to get up from the stall” is impossible without capital being brought in, and it is risky in the current situation of brutal competition.

At present, “Armenian” workshops and repair stalls exist independently of each other. Likewise, incidentally, the non-”Armenian”, with the exception of stalls of the Central District, which are in the possession of the former director of the corresponding branch of the “Neva” company, but if desired, they can also be bought out. The networks existing among them are less ethnic in essence than professional, familial, and territorial - those working not far removed from each other can turn to one another for help (for example, when some kind of material is needed): “Unfortunately, it turns out so that contacts with newly arrived Armenians /are not formed/...either we've become Russianised, or they want too much right away, but the contacts don't turn out. And therefore it's better, as it's said, to maintain relationships... outside the working environment, let's say” (from an interview with a “Petersburg” Armenian, the owner of a workshop).

Making shoes, as different from repair, requires first, major start-up capital, second, more significant entrepreneurial skills, and third, access to such manufacturing resources as highly qualified personnel, supplies and sales channels.

Our research gives grounds to assume that the first private shoe factories in Petersburg were founded by “Erevan” Armenians (“In general, at the start Erevan Armenians made the shoes, and the Bakunians were in repair. Q: And at the start – when was that? A: Ten years ago, I think /in 1988/” - from an interview with a refugee from Azerbaijan). The point is that Armenian shoes were one of the best of the domestic products. In the period when the commodities market was extraordinarily meagre, the export of Erevan shoes to Russia became a profitable form of business. The family of one of our informants earned a living in just this way in the early 1990s: they broght shoes from Erevan, and then sold them in Syktyvkar, where the scarcity of shoes was more severe than in Leningrad. Therefore it seems natural that it was primarily emigrants from Armenia who had access to necessary manufacturing resources. Making shoes in Petersburg was much more profitable, attracting Erevan specialists with their experience, skill, and techniques. Unfortunately, these factories have a more closed character and we were unable to gain access to them.

Inclusive observation was carried out in three shops, organised by Armenians who came from Azerbaijan and Georgia in the early 1990s. They are located on the territory of a military scientific research institute, where two more shoe factories are situated (the owner of one is a “Georgian”, the other a “Russian” woman who worked in this branch in Soviet times) and a wholesale store that sells raw materials. The owners of all five shops together with their companions form a commercial company, and their network has a territorial character. The members of the community are integrated into other business networks, not always intersecting each other.

The territorial company that was studied forms a unified communicative space, where rules are worked out and entrepreneurial practices are coordinated. For example, here there are usually discussions of which sales channels are most successful, which model will be most in demand this season, etc.

The positions of entrepreneurs in the company are defined above all by their professional roles and authority, and do not depend on their ethnic group. Migrant entrepreneurs were integrated into professional, originally poly-ethnic company not as a group, but individually.

The factories that we observed belong to small business. As a rule, they employ no more than 15-20 people, while in view of the seasonal character of the shoe market itself, the number can be reduced several times in mid-season. In part the equipment was acquired at large state shoe enterprises after being written off and in part was stolen or illegally purchased directly from employees of these state enterprises. Such opportunities appeared as a result of the bankruptcies of state shoe companies of the region (if not de jure, then de facto), which struck practically every one of them. In other words, the enterprises are fitted out with old and very worn-out equipment, so that manual labour remains dominant. One shop puts out no more than two or three models of shoes per season, does not have its own regular channels of supplies or shoe sales, which directly indicates the trade borders of the niche. The proprietors of the shops are practically excluded from the networks of entrepreneurs engaged in sales or production of raw materials.

According to Western studies of ethnic economy (for example, Light, Karageorgis, 1994, etc.), entrepreneurs often use migrant compatriots as a work force. We observed a contrary picture: with a single exception, there were no Armenians among the workers; as a rule, personnel are recruited from the staff of the former state shoe companies. Our informants explain this in different ways. One of the explanations emphasises the special aspects of the migrant's situation: he has (especially when a refugee is involved) specific kinds of expenses (for example, the need to rent accommodations), and consequently the need for higher pay.

Another explanation concerns mainly the problem of familial and friendship relations. It is considered that a relative or compatriot hired for a job will strive to become a partner, not obeying instructions and thus emphasising his exclusive status among the employees. Therefore there is an effort to avoid hiring him, but at the same time they might give all kinds of support to him when he opens his own business. Thus, according to some of our data, the practice of start-up credit is taking shape in the professional community. At first glance, a paradoxical situation emerges: they do not hire him as a worker, but they give credit. However, this has its logic: on the one hand, as a creditor, the entrepreneur in his production work does not become dependent on friendhsip or familial relations; on the other hand, just these relations serve as a mechanism of control over the funds that are made available. Thus economic interaction is based on trust because of familial, friendship, or compatriots' relations, and ethnicity here does not have influence by itself.

Generalising the observations presented, it is possible to say that the economic strategies of our informants are based on principles of market rationality. Precisely these principles regulate the use as resources of familial and compatriots' networks that are taken as ethnic networks. In the meantime, ethnicity itself could play the role of a resource only in the stage of their integration into the business network – and exclusively thanks to the special situation in which the Armenians found themselves because of the events in the Caucasus, which were spoken of above. But then ethnicity did not define the economic practices of the “Armenians”. Today it has been practically forced out of them.

Light, I. (1984) Immigrant and Ethnic Enterprise in North Ameriña // Ethnic and Racial Studies. Vol. 7. Number 2, April

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