Comparison of the reasons why immigrants normally turn into entrepreneurship and why Philippine immigrants have started as entrepreneurs in Finland: A case study
Introduction
Entrepreneurship has been Finland’s most significant structural change in business activity over the past 20 years (Melin, 2020). Since 2000, the number of self-employed people in Finland has increased by over 60,000. At the same time, the number of self-employed employers has remained stable at around 90,000. In 2020, the number of sole proprietors was already 190,000. Growth has remained stable, with a few short-term declines (Hellsten, 2022). Indeed, the importance of entrepreneurship in Finland has increased as the number of self-employed has grown. In fact, according to the OECD, Finland has the highest share of self-employment in employment in the Nordic countries. In 2020, the share of self-employment in employment in Finland was 13.4%, in Sweden 9.9%, in Denmark 8.5%, and in Norway 6.5% (Yrittäjät, 2022). There are several reasons for this phenomenon and should be studied more.
The rise of immigrant entrepreneurship in Finland is within the context of the more significant Finnish entrepreneurship phenomenon. As per the latest data from Statistics Finland on immigrant entrepreneurship in Finland, out of nearly 470,000 people with foreign backgrounds in Finland, 10,000 of them are immigrant entrepreneurs. These micro, small, and medium-sized enterprises employ about 30,000 people with a combined turnover of €3.5 billion (Yrittäjät, 2019). In Helsinki alone, in 2021, 1200 new companies were established, and 43% of these were immigrant-founded. Relatedly, immigrant-founded companies generally create more jobs than other companies, albeit the levels of pay and productivity are low, there are growth opportunities (Manai, 2019).
Push and Pull Factors of Entrepreneurship
Entrepreneurs traditionally have been distinguished between two types: ”Push” entrepreneurs and ”Pull” entrepreneurs. ”Push” entrepreneurs are those whose dissatisfaction with their current position pushes them to start a venture for various reasons unrelated to their entrepreneurial characteristics. The second type of entrepreneur is ”Pull” entrepreneurs who are lured by their new venture idea and initiates venture activity because of the attractiveness of the business idea and its personal implications (Amit & Muller, 1995).
Yanai et al. (2020), in their survey of push-pull factors of immigrant entrepreneurship, identified push factors as unemployment, underemployment, retrenchment, lack of good job opportunities, money issues, dissatisfaction with income thus the desire to earn more money (extrinsic reward), low paying job with little upward mobility thus the ambition to be better off, high cost of living, high inflation, economic downturn, unfair access to resources, discrimination, difficulties in getting financial support, and culture/family background in business. On the other hand, pull factors include financial freedom, change of career and lifestyle, independence and self-fulfilment (intrinsic reward), the desire to become their own boss, flexible working time, monetary motivation, related education and work experience, business and market opportunity, social network, support opportunities in the society and from the government for entrepreneurship, and socio-economic-political considerations affecting migration decisions.
Immigrant Entrepreneurship Motivation in Finland
Jumpponen et. al (2007) in their study of Russian immigrant entrepreneurs in Finland, mentioned that Russians, the largest group of immigrants in Finland and the most prominent immigrant entrepreneur group in Finland, pivoted into entrepreneurship after the collapse of the Soviet Union. Among other motivation factors for entrepreneurship, Russians view Finland as having favourable conditions and opportunities to conduct entrepreneurship, an optimal business base, and a launching path for Russian entrepreneurs into the larger European markets (Ledyankina-Peuhkuri, 2011; Koiviola, 2019).
Chen (2017) pointed out that Chinese immigrant entrepreneurship motivation in Finland can be identified as positive and negative. Positive motivations for Chinese entrepreneurs in Finland include the personal interest to do business, inherent business culture, family background and influence, education and professional experience, financial support, and business opportunities in the market. On the other hand, negative motivations include dissatisfaction with current employment and uncertainty about the future, i.e. lack of job career prospects.
Wahlbeck (2008) articulated that problems immigrants experience in the general labour market in Finland were a significant reason why the immigrants from Turkey started their businesses in Finland. However, the economic reason does not entirely explain their motivation. He argued that freedom and social status connected to self-employment are highly valued among Turkish immigrants in Finland. Hence, entrepreneurship provides a positive self-understanding and social status, which Turkish immigrants find challenging to achieve by any other means in Finnish society.
Trinh (2013), in her study of the motivations of Vietnamese immigrant entrepreneurs in Finland, cited unemployment, lack of career prospects, low-paying jobs, job dissatisfaction, racial discrimination, and business and market opportunities as the main push-factors for Vietnamese entrepreneurship in Finland. Pull-factors such as education and work experience, social network, autonomy, and need for success appear as less significant motivation factors.
Ahmed (2018) found out that unemployment, dissatisfaction with blue-collar jobs, the need to financially support the family, financial gain, market opportunities, independence and flexible working hours, lower barriers of entry, social status and prestige as motivation factors as to why Bangladeshi immigrants in Finland turn into entrepreneurship.
Tamang (2015) concluded that Nepalese immigrant entrepreneurs in Finland were motivated by three significant factors – personal ambition to become entrepreneurs, family business background, and dissatisfaction with jobs in Finland as blue-collar workers.
Philippine immigrant entrepreneurship in Finland
According to Gene Paavola, community leader of the Finnish-Philippine Association, the first wave of Philippine immigrants came to Finland in the 1980s and 1990s as spouses married to local Finns. By the 2000s, the second wave of Philippine immigrants came in primarily as nurses, caretakers, chefs, and cooks. By the 2010s, the third wave of Philippine immigrants came in through family ties and as relatives of the first and second waves of Philippine immigrants. As of the latest available data, around 6510 people in Finland are originally from the Philippines (Statistics Finland, 2021).
According to Statistics Finland (2021), the Philippine labour force in Finland, people aged 18-64, employed in the labour market is 3480. Of them, 3340 are wage and salary earners. 141 are self-employed and entrepreneurs. Of Finland’s total Philippine labour-force, 2224 are female, and 1256 are male. According to the latest data from Statistics Finland, Philippine male immigrants have the highest employment rate among all male immigrants in Finland (Helsingin Sanomat, 2023). Philippine employment rate among it´s male working-age population is at 84%, even higher than the local Finnish male employment rate at 74% (Ibid.).
Philippine immigrant entrepreneurship is a new phenomenon in Finland. According to Statistics Finland (2021), there are 141 Philippine immigrant entrepreneurs in Finland, with rapid growth starting in the latter years of the 2010s. All Philippine businesses in Finland fall under the category of SMEs, small to medium-sized enterprises ranging from cleaning services, restaurants, cafes, grocery stores, retail clothing shops, parlour shops, travel agencies, import-export trading, human resources recruitment agencies, manpower services, and electrical-plumbing-airconditioning technical services. Noticeably, there has been a rapid increase in Philippine immigrant entrepreneurship in Finland in the 2010s, particularly in the latter part of the decade. This growth trend appears to continue this decade, the 2020s, as the increase of Philippine immigrant entrepreneurship is directly related to the number of Filipinos immigrating to Finland for work and family ties.
Philippine immigrants´ motivation to start as entrepreneurs in Finland
The main writer, Estallo (2023), found out in his pioneering research on Philippine immigrant entrepreneurship in Finland, that the most important motivational pull-factors for Philippine immigrant entrepreneurs in Finland are business and market opportunities, utilize their previous education, profession, and experience, and desire to help their help fellowmen and contribute to the good of the society. The least important pull-factors are the ease of opening a business, government support and financial freedom, and the dream of becoming rich. Push-factors are unemployment, underemployment, lack of job opportunities, dissatisfaction with income, social prestige, and business background in the family.
Business and Market Opportunity
80% of the research participants stated that business and market opportunities in Finland as their primary motivations to open up a business. The following are some excerpts from the interview conducted by the author to select Philippine immigrant entrepreneurs in Finland.
“When people see negativity, I see positivity. There are always business and market opportunities, even in a few people, small country like Finland. Some people don’t want to do this and that business because of many uncertainties, but I am willing to do it with extra effort.”
“There are still many things that can be done in our city. We just need to observe well what people need. For sure, there are some services or products that we can offer better at a lower price”.
“After many years of living and working here in Finland, I realized that there is a business and market opportunity, so even as I am not really sure what’s going to happen, I just go for it”.
“My friends told me I could use my passion and work experience to open up a business in Finland, so even though I have zero experience in doing business, much more doing business in a foreign country, I took the risk. No pain, no gain”.
“There are many things to do in Finland, many opportunities for hardworking people”.
Making Good Use of Previous Education, Profession, and Experience
Most of the research participants have finished their bachelor’s degree studies and were based in another country as migrant workers or overseas Filipino workers (OFW) before residing in Finland. As such 80% of the participants reasoned that they want to make good use of their education, profession, and experience as their main motivation for becoming entrepreneurs.
In the words of one of the research participants, “Before arriving here in Finland, I already knew what I am going to do in Helsinki, a work related to my education and profession and experience in the Philippines. So, after several years of becoming an employee, I decided to become an employer. After 17 years, I can surely say I made the right decision”.
Business Social Responsibility
Business social responsibility, or the desire to help fellowmen and contribute to the good of society, emerged as one of the top motivation factors for Philippine immigrants in Finland to start their businesses. 80% of the research participants expressed that their primary motivation to do business is to help their fellow Filipinos in Finland and to give something good back to Finnish society.
One of the entrepreneurs said, “This country has been good to me and my family. Finland gave me a good opportunity in life and for my children. I think starting a business is not only good for me but also for the society I am grateful for. Besides, more Filipinos are coming to Finland, so having a business is also a good chance to help our countrymen settle down here with their families”.
Another entrepreneur mentioned that “I have been to other countries before moving to Finland, and I can say that I like it here. After gaining some years of work experience and through the kindness of my Finnish employer, I became an entrepreneur. I feel I have this responsibility to give back to the Finnish society”.
Self-reliance and Personal Freedom
Half of the research participants expressed that self-reliance and personal freedom, like flexible working hours are their main motivations for starting their own business. In the words of one Philippine entrepreneur, “I am a young father, and I have another child coming, so having my own time for my growing family is very important. As an entrepreneur, I can manage my time well, unlike before when I had to go to work at a set time and place”.
One research participant mentioned that having time for the family, hobbies, and time to enjoy life in Finland can be done as an entrepreneur because they can control their schedule much better.
Another said, “Having my own business, I can set my own time accordingly. No one can tell me and boss me around during working hours. As a mother, I can also care for my children properly compared to working as a 9 to 5 employee”.
Dream and Ambition to become an Entrepreneur
40% of the research participants stated that becoming an entrepreneur is their dream and ambition. Four Philippine immigrant entrepreneurs in Finland shared that they always dreamed of running and managing their businesses, and it’s just amazing that they get to fulfil this ambition in Finland.
Government Support and Ease of Opening New Business
Only 2 out of the 10 research participants see the ease of opening a business in Finland and government support for entrepreneurs in guiding them through the process as their primary motivation for opening a business.
One of the participants compared and contrasted how relatively easy it was to set up a business in Finland compared to the United Arab Emirates, her former country of residence. She mentioned that she was surprised by how accommodating government agencies are in helping her open up a business, from improving her business idea to important guidelines about taxation and legalities and finding financial resources.
Another participant highlighted the fact that the government in Finland is not corrupt and very helpful and efficient in helping her set up her own business. It was easy and not stressful, she added.
Financial Freedom and a Dream to Become a Rich Person
Only 1 out 10 expressed that one of his primary motivations for setting up a business in Finland is financial freedom and his dream to become rich. He mentioned that he grew up in rough circumstances in the Philippines, and the good life he has now in Finland can be even better with good fortune.
Unemployment and Underemployment, Lack of Job Opportunities, Dissatisfaction with Income
None of the research participants mentioned unemployment, underemployment, lack of job opportunities, or dissatisfaction with income as reasons for them to start entrepreneurship in Finland, like normally many other immigrant entrepreneurs have mentioned in other international studies (Chrysostome, E., 2010) .
Social Standing, Prestige of Owning a Business, and Business Background in the Family
Similarly, none of the research participants stated that the social standing and prestige of owning a business or business background in the family drove them to become entrepreneurs.
Summary and Conclusions
The phenomenon of immigrant entrepreneurship in Finland is an extension of the rapid growth of Finnish entrepreneurship since the start of the new century. Immigrant entrepreneurship is an essential part of this trend and Finnish economy. On the other hand government agencies tasked with crafting policies and programs should pay more attention to the characteristics and nuances of different immigrant entrepreneurship groups, because there are some significant differences between different groups to start as an entrepreneur.
There are myriad reasons and factors, drivers and motivators as to why immigrants turn to entrepreneurship. It can be pull- or push-factors depending on the situation and circumstances the immigrants are in. However, specific characteristics are unique to the motivations of Philippine immigrant entrepreneurs in Finland. To wit, factors like business and market opportunities, making good use of education, profession, and experience, and the desire to help fellow Filipino immigrants and giving back to the Finnish society are the primary motivation factors for Philippine immigrant entrepreneurs in Finland.
Unemployment, lack of job opportunities, or dissatisfaction with current employment and income are not push -factors for Philippine immigrants to become entrepreneurs in Finland. This finding is opposite to other immigrant entrepreneurship studies in Finland, whereby unemployment is cited as a significant factor as to why immigrants are pushed into entrepreneurship.
The only problem for some Filipino entrepreneurs in Finland is that, despite having been in Finland for up to 20 years, they have not learned the Finnish language properly. The reasons for this phenomenon should be further investigated by the Finnish labour administration. The inability to learn Finnish makes it difficult to adapt to the country and to run and develop a business in Finland.
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