The active discussion on ethnic entrepreneurship, going on in social sciences, is caused by the numerous examples of successful ethnic businesses. However this success is not evident and it is not true for all ethnic groups. Thus, the discussion is focused on the following questions. why is ethnic business often so successful, what are the most successful groups, and what are the resources they can rely on?

The emergence of ethnic businesses in the big cities of immigration countries has been studied mostly in the American context. To describe this phenomenon both categories, “ethnic resources” as well as “ethnic networks” have been usually employed. These terms might be useful in the analysis of the ethnic business’ success but in fact there is no social group totally deprived of “networks” and “resources”. Do immigrants then have more networks and ethnic resources than other groups? Are they more flexible in using their resources? The first answer could be that the migrants usually do not have the same access to economic resources and cultural capital, available for the rest of the population. Therefore they have to rely on a social capital, networks and ethnic solidarity. According to this argument, the lack of the access to other resources and to the labour market are the stimulus to actualise ethnic resources.

In order to explain the phenomenon of the ethnic business I would like to refer to the scheme of Waldinger et al 1990. He points out two important aspects: 1) the opportunity structure, which means a legal framework and the possibilities to enter the local labour market; it also includes the skills of the labour force and the demand on the labour market; and 2) the specific ethnic strategies and resources which ethnic groups can rely on to overcome the difficulties of adaptation and discrimination practices. The ethnic resources include networks, solidarity, entrepreneurial traditions, the access to the cheap labour force, the knowledge of the needs of ethnic consumers.

The migrants from the former Soviet Union is a good case to study entrepreneurship in the context of opportunity structures and ethnic resources. Out of 3.5 millions inhabitants of Berlin nearly 100.000 are the Russian-speaking migrants from the former Soviet Union who came in the nineties. They belong to different ethnic groups, they have brought different skills from their home countries. But as they all came to Berlin in the same period, they are dependent on the same labour market restrictions. Therefore, the different schemes of how these groups use opportunity structures and ethnic resources might be identical. In my paper I would like to consider the case of the “Russian” entrepreneurship in Berlin. My findings are based on the research, carried out in 1996. I am going to present a brief overview on the Russian shops in Berlin and the strategies which are used by entrepreneurs to initiate entrepreneurial activities.

The migrants from the Soviet Union represent the most growing group of immigrants in Berlin in the nineties. Their number has risen from a bit more than 1000 people (excluding the military forces) to 100.000. This includes nearly 30.000 citizens of the countries of the former Soviet Union, 30.000 ethnic Germans (repatriated, “Aussiedler”) and, according to different estimations, from 15.000 to 40.000 undocumented “illegal” migrants.

The prevailing ethnic group are ethnic Germans, the migrants who have come mostly from the Asian part of Russia and Kazakhstan. Men are mostly professionals in construction and technical jobs, women are engaged in services and office jobs. They obtain the German citizenship, they have equal rights and no restrictions in the access to the labour market. Unfortunately, there is very few data on this group because in the statistics they are not mentioned separately.

About 5 to 10.000 migrants are the Jews according to their gate of entry. There is a law which allows people of Jewish nationality and their relatives from the former Soviet Union to come to Germany as refugees. As a rule, they lived in the big cities of the European part of Russia and of the Ukraine. The majority of them have a high education and worked in highly skilled professions. They have permanent residence permit and no restrictions in the access to the labour market or to the special programs for unemployed people.

The rest of the migrants – legal or illegal – are different in terms of their country of origin and skills. The important fact is that these groups do not get an access to self-employment immediately when they arrive in the country; for them it is possible only after about five years of official residence. For our case study they are not important.

In the nineties Berlin is experiencing a deep economic crisis. Production industries are dismissing about 50% of their workers while service industry is not growing either. The result is a growing number of unemployed. The lack of jobs in the production industries has a particular impact on the migrants, because for the last 150 years this sphere has provided a starting point for the migrants’ careers. The only growing segments on the labour market are very simple and low-paid service jobs on the one hand, and high skilled services on the other hand. However to get the latter, it is necessary to have a good command in the German language and to know cultural traditions. As a consequence of these economic processes, the rate of unemployment has become extremely high among the migrants arrived in the nineties. This caused the question: are there entrepreneurs among the Russian speaking migrants?

The research project on the Russian entrepreneurship was carried out in the beginning of 1996. The analysis of the Russian newspapers in Berlin and the first meetings with informants allowed us to make out a list of shops and small businesses hold by the Russian shopkeepers. We were asking the shopkeepers if they knew other shops hold by Russians; we were also looking at announcements in the shops and in newspapers. We started our survey with an interview questionnaire and asked them the following questions:

1. Where they came from, how and when they arrived in the country.
2. When and why they started their business, what they did before.
3. How they got the money, where they have their products from and who their clients are.
4. How their business is going, what their problems and plans for the future are.

However after two unsuccessful attempts we decided to change the method. One shopkeeper refused to participate in an interview. He told us that he had never done something like this before and he was very suspicious and afraid of the Russian Mafia and the German security service. The second interview was very short and very official. We had about 15 questions and the answers were very short, only “yes” and “no”. After these failures we decided just to go in the shops and to have an informal chat with the shopkeepers, showing our interest in the shops and their owners and asking where they came from, how they came to the country and so on. Of course, sometimes we did not get all the information we wanted. But this method appeared to be more successful.

We found the surprisingly high number of 60 shops run by the Russian speaking shopkeepers in Berlin. These shops can be found all over the inner-city districts, but there is a remarkable concentration in the district of Charlottenburg. Nearly all shops were opened by the Jewish migrants from Russia and Ukraine, who came to Berlin between 1990 and 1992 and started their own businesses after two to four years of being unemployed. As a rule, these people had not have any experience in business before.

We can distinguish three major strategies of how the Russian shopkeepers score a success in business:

1. The “exotic” trade. These shops sell audio- and – video production, books and other things, imported from Russia and other countries of the former USSR. As a rule, an owner of such a shop does not speak German, and all the clients know Russian. All the announcements are in Cyrillic. These shops fill in a niche for the ethnic community because these products are not available in German shops. In the Russian-speaking community everyone knows them, including ethnic Germans. This business demands big investments, however the profits are also high. It is obvious that to run such a business it is very important to know the demand of the clients and to have the stable social networks in the country of origin. This business provides opportunities for the upward social mobility through shifting to the wholesale trade. The shops of this type are highly concentrated in Charlottograd/ Charlottenburg but the clients come from the whole city.

2. In most of the inner city-districts there are small food shops, cobblers (shoe makers and repair) or tailors. Their clients are mostly German, but also Turkish, Yugoslav and Russian, i.e. all people living in a neighbourhood. These businesses resemble the enterprises of the Jewish migrants in New York in the beginning of the XX century. The owners of these shops are relatively young, between 30 and 40 years old and well educated, there are also many women. This trade does not need a significant capital. The shopkeepers regard their business as a stepping-stone in their career: they gather information, skills, learn the language in order to get known how things are working in Germany. Their business is an effort to achieve the social mobility and increase a social status, however this way is rather hard. In our survey the number of these shops are only about one third. In fact there are much more but they are not so easy to find.

3. Other business activities of the migrants from the former USSR are restaurants, cafés and music-bars as well as hair dressers and car-garages. They address different clients, Russian as well as German and offer special services so that people come from different parts of the city. Most of these shopkeepers are skilled in the job they do. They have already worked before in similar jobs in their country of origin. In these businesses the investments are high, as the equipment is more expensive than in other business activities. To be successful, this business needs good networks and contacts within an ethnic group. The shopkeepers have to know their potential clients and investors. Most of the shops have the assistant workers who are usually Russian or Ukrainian Jews.

These three types of the Russian shops in Berlin describe different strategies in the ethnic business. These strategies show that entrepreneurship can not be found only in ethnic niches. Furthermore, a lot of shopkeepers see their job as a way to skill themselves.

But there are new questions arising out of these empirical findings. The first question is: why do not ethnic Germans open their own businesses? In our case study we found only one. The ethnic Germans use the same shops than other Russian speakers but they themselves do not get involved in any business activities. Most probably, it happens due to their German ethnic identity, as they want to be accepted as Germans and, therefore, they do not build their own community structures. There is a discussion among this group if it is necessary to build up some community institutions. But in fact there are no institutions, representing this group. Thus, ethnic networks are not well developed.

The second question is: what is more important for the migrants’ entrepreneurial activity, ethnic networks or the labour market restrictions? Our case study has shown that ethnic structures and networks do exist and, moreover, they are very important. The information about the shops and entrepreneurial activities of the members of the ethnic group is circulating in the community. But it is known that there are a lot of entrepreneurs who could not succeed in their business. Sometimes they switch to the wholesale trade. Others are forced to close their businesses.

Does ethnic entrepreneurship guarantee the upward social mobility? Is ethnic business always successful? To answer this question we can go back to the scheme of Waldinger. In my introduction I mentioned the argument of Waldinger that ethnic business depends on opportunity structures and ethnic resources. To summarise all what I have said above, I will specify the different factors which influence entrepreneurship in the case of Berlin.

First of all, the legal status of a migrant is important. For instance, the Germans and the Jews have an opportunity to find a job, whereas other groups of Soviet migrants have very little chances. However it does not fully explain the difference between the Jewish and the German migrants.

The skills brought from a home country are not so important for the choice of the sphere of an entrepreneurial activity. Most of the migrants have not had any entrepreneurial experience. Some have worked in the sphere of trade before but nobody run his/her own business in the Soviet Union. Probably, some individual decisions to start a business can be explained by the fact that trade is considered to be the traditional sphere of occupation for the Jews, however I would not rely on this argument.

The labour market restrictions seem to be very important to explain the phenomenon of ethnic entrepreneurship. In most of the cases, looking for an appropriate job, the shopkeepers had tried many other opportunities. Finally, the opportunity to have his/her own business appeared to be more attractive than to be employed in an unskilled low-paid job. For the German migrants it was a little bit easier to find a job. They are not that pretentious since their educational level is not that high and they did inspire to get academic jobs.

The migrants networks are being developed in the context of the ethnic community structures. Thus, the Jews and other Soviet migrants rely on their ethnic networks to a larger extent than the ethnic Germans. On the other hand, their networks are possibly weaker in terms of the access to other segments of the labour market.

Most of the shops address the specific demands of the migrants. It gives an opportunity to occupy a certain economic niche. The ethnic business formation then plays a central role in the constitution of an ethnic community and the appearance of ethnic demands.

It seems to be very important that the migrants can find certain niches in the labour market and /or in business. In Eastern Berlin, for example, there has been a lack of small grocery shops. Now their number is increasing because of the Jewish migrants, competing with similar Vietnamese, Turkish and German businesses. In Western Berlin the competition with the Turkish shops is too intense, so it is easier to work as tailors or cobblers. Regarding the theoretical scheme of Waldinger, this means that the ethnic business is being developed in economic niches. But it can be successful only thanks to the strong ethnic networks which guarantee information, clients and cheap labour.