What if your world is outside the oyster? : How highly educated and skilled first-generation immigrant entrepreneurs develop opportunities in knowledge-intensive sectors

Abstract: In the previous decades, immigration has increased significantly from non-EU countries to Western countries including Sweden. Due to different backgrounds, immigrant´s economic integration is even more important for their financial support and the economic growth of the host country. Consequently, the rising unemployment rate poses a threat requiring multiple efforts to integrate immigrants into the labor market. One way immigrants tackle unemployment is by opting for entrepreneurship. However, most prior studies within the field of immigrant entrepreneurship focus mainly on disadvantaged immigrants who face high entry barriers and limit themselves to labor-intensive and low-productive traditional sectors that are not fast-growing nor boost economic growth. This disadvantaged view on immigrants is challenged, and subjected to reassessment, especially in the urban context, due to which I shift the focus to highly educated and skilled first-generation immigrant entrepreneurs from non-EU backgrounds. To understand what facilitates this group of immigrants, I use a consolidated view of opportunity creation and discovery namely opportunity development which is at the core of the entrepreneurship process. Furthermore, opportunities are considered to originate from a business idea making it indisputable that recognition and evaluation of a business idea are vital in their development. Hence I use IPA to analyze data from 30 interviews, cross-checked with secondary data collected through online sources, and contribute with a model, that provides empirical evidence and theoretical perspective within immigrant entrepreneurship literature on how weak and strong social ties, prior work experience, and education of highly educated and skilled first-generation immigrant entrepreneurs influence them to recognize and evaluate business ideas during opportunity development in knowledge-intensive sectors. Results show there was not a specific stage of opportunity development when either of the two social ties was more or less relevant, as knowledge flowed through both that helped bridge social distances. To persevere and overcome their foreign status, immigrants sought out weak social ties to get more acquainted with their host country. While they avoided involving some strong ties directly in business matters, however, they were equally important in providing emotional support and motivation. This resulted in increased self-efficacy in their capabilities and confidence in the feasibility, credibility, and legitimacy of their business ideas that helped overcome fears to make informed assessments, educated investments, and suitable adjustments. Furthermore, some weak ties turned into strong ties with time, such as ex-colleagues and clients who became lifelong friends, business partners, and advisors. Social ties also had a stronger impact when paired with the immigrant´s high human capital from pre-existing sources of specialized knowledge i.e., prior work experience and education as well as new knowledge gained through a systematic search with the help of social ties. Therefore, social ties are a source of new knowledge, while prior work and education are a source of social ties. A marginal number of immigrants felt frustrated with weak ties and as an alternative they relied on social networking websites, to connect with a wider global pool of potential business partners, clients, and skilled people.