Informality in Ethnic Minority Microbusinesses: A Deliberate Choice or the Inevitable Consequence of Resource Constraints?

As we understand that like children are not little grownups, microbusiness are not the same as large businesses are (Dandridge 1979). Microbusinesses operate differently than larger Small and Medium Enterprises (SMEs) and large businesses (Gherhes, Williams, Vorley, et al. 2016). Ethnic minority microbusinesses that operate in an ethnic majority social and economic space are different even from ethnic majority microbusinesses let alone large businesses (Haq, Johanson, Davies, et al. 2023). Ethnic minority microbusinesses remain under researched even if in superdiverse countries, the likes of the UK, although they make up to 11% of all private sector employers in the UK (Haq 2015; Piperopoulos 2010). This research, and report, is among the first to focus on ethnic minority microbusinesses. The research specifically focuses on how informality contributes to ethnic minority business performance. This research, and the report, would not have been possible without financial support from the British Academy/Leverhulme as well as voluntary participation of South Asian Ethnic Minority microbusiness owners and managers in the target geographic area.

Findings are based on 17 qualitative interviews with South Asian ethnic minority microbusiness owners and managers in West Yorkshire, Northern Rural England. The interviews were conducting in the second half of the year 2021. Thematic analysis of the 17 interviews led to the emergence of five themes that are informed by ethnic culture and family value systems. These themes are formality v informality; customer service; individual human capital; gender roles; and impact of COVID-19. Data analysis revealed that informality is pervasively present in the practices of these businesses, and it contributes to business performance. I invite further research in other businesses and geographical contexts to explore further whether informality shapes microbusiness performance.