Q&A WITH ERIC FONG: THE GENESIS OF ETHNIC BUSINESSES

INTERVIEW BY LORETTA HO AND HARBI NATT

December 12, 2012

WE UNDERSTAND THAT MOST OF YOUR RESEARCH DEALS WITH THE SETTLEMENT OF IMMIGRANTS IN ETHNIC NEIGHBOURHOODS AND ENCLAVES. CAN YOU TELL US ABOUT HOW YOU’RE EXPLORING THIS ISSUE?

Eric Fong

My work focuses on patterns of immigrant settlement, neighbourhoods, and enclaves. Previous work has shown us that immigrants establish businesses in the so-called immigrant gateway cities of Vancouver, Toronto, and Montreal. In recent years, I’ve expanded this body of research to examine the settlement of immigrants and the development of ethnic businesses in small and medium-sized cities. Finding that increasingly numbers of immigrants are settling in smaller and medium-sized cities, I have begun to analyze the economic outcomes of this population as it compares to immigrant counterparts in gateway cities. Another avenue of my research focuses on Korean settlement in Toronto, particularly in relation to the genesis of Koreantowns. I’m very interested in exploring why and how Korean businesses cluster in certain areas of Toronto, for instance along Bloor Street between Bathurst and Christie Streets and in the Yonge and Finch area.

WHY IS IT IMPORTANT TO CONSIDER ETHNIC BUSINESSES? WHAT CAN WE LEARN ABOUT IMMIGRANT SETTLEMENT PATTERNS THROUGH THEIR BUSINESSES?

I think that it is important to consider business in general because it is the engine of the economic growth of a country. Ethnic businesses are an important part of this growth. Many studies suggest that ethnic businesses provide jobs for co-ethnic members, especially those who might have difficulty finding jobs in the mainstream society. Another reason to consider ethnic businesses is because we want to know how well immigrants are doing. Are ethnic business owners and employees barely surviving or achieving economic success? What are the economic returns of those who are working in this sector? Finally, it’s important to understand ethnic businesses from a theoretical perspective. Ethnic businesses are at the intersection between the disciplines of Economics and Sociology—Economics in the sense ethnic businesses provide an understanding of economic transactions, but Sociology in the sense that businesses hinge on the interaction between co-ethnics, which is shaped by social, ethnic, and cultural ties. So, ethnic businesses are a platform to examine the intersection between economic and social relations.

AS YOU MENTIONED, SOME IMMIGRANTS ARE BEGINNING TO SETTLE OUTSIDE OF THE IMMIGRANT GATEWAY CITIES OF VANCOUVER, TORONTO, AND MONTREAL, OPTING TO LIVE AND WORK IN SMALLER METROPOLISES. WHY DO YOU THINK THIS SHIFT IS OCCURRING?

Unfortunately, there aren’t many studies documenting the determinants of these new settlement patterns in Canada. However, there are two possible reasons. One is the push factor of saturation. We have so many immigrants in gateway cities and it is more difficult for them to find jobs. This reality prompts immigrants to move outside of gateway cities in search of better opportunities. The second reason is the pull factor. Small or medium-sized cities are establishing active recruitment programs and providing economic incentives to attract immigrants to work there. Both factors are operating in tandem, resulting in increased rates of immigrant settlement in non-gateway cities.
Compared to their big city counterparts, how are immigrants in smaller cities faring?
We find that both immigrant business owners and employees earn more working in non-gateway cities than in large gateway cities. The patterns partly suggest that the background of immigrants, such as the language ability and duration of stay in the country, are not related to the earnings of those immigrants working in non-gateway cities. Thus, their income is not negatively hampered by their immigration background

LET’S TALK ABOUT YOUR PROJECT ON KOREANTOWN. WHY DID YOU CHOOSE TO STUDY THIS COMMUNITY’S EMERGENCE IN PARTICULAR?

Toronto’s Koreantown, located along Bloor Street between Bathurst and Christie Streets, is a very interesting case, affording social scientists the rare opportunity to understand the genesis of an ethnic community. The majority of Korean immigrants arrived within the last 20 or 30 years, at a time when we have already developed a good system of documentation for all kinds of information. As a result, we are able to track the entire process of their arrival, settlement, and clustering. This is something that we have not been able to do with other groups, who first immigrated before or at the turn of the century, when information was not so systematically or thoroughly collected. The Korean case, thus, grants social scientists a unique lab environment to see what factors contributed to the growth of this community. So, what I did was use the both the census tract data of the six or seven blocks (approximately 3000-4000 households) within which Koreantown is located and the historical assessment rolls of the area. The City of Toronto has an archive of residency and business records for each year. I was able to look at the yearly changes and trace the process of Korean concentration. I examined when Korean businesses arrived in the area, who owned the buildings before their arrival, who owned the buildings in the year the record was taken, and the types of economic and social processes that unfolded. Arising from this research are two important explanations for the growth of Koreatown. The first reason is the pull factor. Korean business owners were attracted to the area by a few Korean-owned buildings already in the area. As more and more businesses move into the area, property owners began dividing buildings into smaller units to accommodate more tenants, who were generally Korean. The pattern seems to suggest that co-ethnic real estate agents and property owners in the Toronto Korean community play a very important role in facilitating the pull process through advertising the availability of space to the co-ethnic community and attracting entrepreneurs to work and live in the area. At the same time, the growth of Korean population helped expand the ethnic market, encouraging further growth of Korean businesses.

WHEN YOU TALK ABOUT THE GENESIS AND GROWTH OF KOREANTOWN, ARE YOU REFERRING STRICTLY TO THE EMERGENCE OF A BUSINESS COMMUNITY OR TO THE DEVELOPMENT OF A SOCIAL/RESIDENTIAL COMMUNITY AS WELL?

That’s a difficult question to answer. My study is mainly focused on the concentration of ethnic businesses. We can assume that when you have more ethnic businesses, co-ethnics will come in to dine at the restaurants, use the services, and interact in the area. However, it is possible that ethnic economic activities occur in areas outside of where ethnic members live. For example, you may reside in a suburban area and visit ethnic business concentrated area for services once in a while. In general, when we talk about ethnic communities, we discuss it in a very loose way. Sometimes, we are referring to the residential location; other times, we are referring to the business concentration. In the past, though, we have considered them together because in the 1920s and 30s, when the idea of ethnic concentration first emerged, we didn’t have such developed suburban areas and most people lived in the city where they also worked. That being said, our census tract data suggests that many Koreans continue to live in and surrounding Koreantown today.

TO WHAT EXTENT DO YOU THINK THAT THE PROCESS OF DEVELOPMENT IN KOREANTOWN IS GENERALIZABLE TO OTHER ETHNIC COMMUNITIES?

Hard to say, frankly speaking. Different groups arrive in the country at different periods of time. So, I won’t claim that what we found among the Koreans can be applied to other groups. But our work documents how real estate arrangements impact the development of ethnic enclaves or communities, a process that could be generalizable to other ethnic communities. For instance, John Horton did a study looking at ethnic communities in Los Angeles similarly shows that real estate agents play a very important role in attracting co-ethnics to settle in a certain area. I think that this is the first time we really have the data to show how this works out over time in a systematic way.
Do you think that these ethnic“-towns” and communities are assisting or prohibiting economic and other types of integration among immigrants?
Good question. On the one hand, we know that ethnic businesses are good for the economic well-being of immigrants. As I mentioned earlier, it generates jobs, particularly for immigrants without much Canadian experience who have difficulty finding work in the mainstream economy. However, studies also suggest that working in ethnic businesses affects immigrants’ social interaction with other groups. Most spend about eight hours at work each day. So, most of their friends are co-ethnic colleagues and customers. Therefore, working in ethnic enclaves can result in limited interaction and friendships with people outside their own groups.

DO YOU HAVE ANY CONCLUDING THOUGHTS ABOUT YOUR FIELD?

First, ethnic businesses are important to the larger society. Nowadays, ethnic businesses are not tiny grocery stores. We find diversity in industry and in size. Some business are actually very large and impactful. For example, the majority of Silicon Valley firms are immigrant-owned; they play a very important role in the long run not only for their ethnic community but also for the larger economy. And, secondly, I think that ethnic businesses are important for the ethnic community itself. We know that immigrants compose a major part of the Canadian population. Many of them spend much of their time with co-ethnic members. By studying ethnic businesses and communities, we are able to understand immigrant activities, their interaction patterns, and the factors that can contribute to smoother integration into Canadian society.

Professor Eric Fong

Eric Fong is one of Canada’s leading experts in ethnic communities, businesses, and patterns of settlement. He is Professor of Sociology at the University of Toronto, President of the Canadian Population Society, and Chair of the International Migration Section of the American Sociological Association. His numerous publications appear in journals such as Social Science ResearchInternational Migration Review, and Annual Review of Sociology. Professor Fong is Acting Director of the R.F. Harney Program in Ethnic, Immigration and Pluralism Studies for 2012-13 and a leading contributor to the founding of the Global Migration Institute at the Munk School of Global Affairs.