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Migrant economies as new arenas to rethink policies and territorial development


The paper is based on an on-going empirical PhD project (Free University of Bolzano, Italy) and deals with the action framework of migrant economies in the South Tyrol of Italy. Self-organization among migrants is perceived as a bottom-up strategy, which can secure not only the material basis for existence, but can also promote active participation in the community and the capacity to become actors of their own development. As the preliminary findings show, in order to develop more real opportunities or freedom of choice there is a significant need to rethink migrant’s role in society. Moreover, awareness of the positive part that migrants can play in society could contribute to a more reflexive understanding of the phenomenon and lead to recognize migrant economic activities more as an important part of territorial development rather than a personal struggle and as a survival strategy.


In this paper migrant economies are perceived as local economies. The concept of local economy, as Elsen proposes it [6, p. 6] is primarily concerned with the dynamics of local economic structures and economic activities within a manageable territory. Local economies are strictly intended as groups which arise within a specific area and which develop their own dynamics [6, p. 14]. Migrant entrepreneurship in local contexts can therefore be certainly described as self-organization initiatives undertaken by people in order to change their own economic, social, cultural and/or environmental situation. Underlying this perspective the concept of embeddedness, which expresses the idea of an economy immersed in social relations and non-economic institutions, is crucial. The aim of this paper is to understand the action framework of migrant economies in the European border area of South Tyrol. As a territory with a short immigration history, the phenomenon can be observed in its very first developments. The intent of the paper is to provide insight into the theoretical background as well as insight into the particular situation of the pilot study in South Tyrol. Finally, the paper deals with the research question: how can the individual actions of migrant entrepreneurs be described in relation to the concept of embeddedness?

Theoretical background

Embedded economy

The concept of embedded economy is based on the understanding that people do not act in a social vacuum, but that their economic action is definitely embedded in social contexts. In the words of the economic historian Polanyi [21, p. 142] it is described as follows: “the economic system is [not] the ‘real’ society, but the economic system is part of this ‘real’ society“. The concept of embeddedness was developed by Polanyi as part of his Substantivist approach. He argues that in modern market-oriented societies, economic action is not embedded but disembedded from the social context and non-economic institutions. In line with the thinking of Polanyi, the neo-liberal perspective on economic activities, which is concentrated on the maximum individual benefit, would extremely limit the embeddedness in non-economic kinship, social and cultural institutions. In contrast to Polanyi, Granovetter [12, p. 445] applied the concept of embeddedness to modern market societies, demonstrating that even rational economic exchanges can certainly be influenced (embedded) by (in) social ties and in a complex system of kinship and moral obligations, for example, as the following quote underlines: “actors do not behave or decide as atoms outside a social context, nor do they adhere slavishly to a script written for them by the particular intersection of social categories that they happen to occupy. Their attempts at purposive action are instead embedded in concrete, on-going systems of social relations” [12, p. 487]. Nowadays, in migrant entrepreneur research the concept of embeddedness has become a crucial element. As the long history of this field of research shows, the different research approaches are situated at the interface between culturally centred approaches (which place cultural and social embeddedness centre stage) [3, 18, 22] and the more structure oriented approaches (which place the structural framework centre stage and argue for overcoming a cultural-only perspective on the phenomenon) [1]. In Europe, research on the topic has a more recent history than it has in America. This is due to the fact, that until the mid-20th century many European countries have been countries of emigration themselves. Only after the Second World War have the former emigration countries become immigration countries, albeit at a different pace and at different periods of time. As a result of these social and structural changes, and after a period of consolidation of the phenomenon, migrant entrepreneurship as a field of research has gained increased importance also within the European territory. As a consequence, Kloostermann and Rath [17] interpreted the concept of embeddedness anew for the European welfare states. They introduced the concept of the mixed embeddedness, which tries to overcome the dualism of structure and culture (individual) and leads to a more differentiated perspective on migrant entrepreneurship. The authors argue therefore for a multiple embeddedness which encompasses not only the personal, social and cultural resources but also the political and economic frameworks of the host country which slightly differs from one member state to the other. Following this line of argumentation, the direction of migration policies also differs from country to country, and is far from uniform among EU member states [23]. This is due to the fact that European member states have different immigration and emigration histories, different structures in the labour market, and different welfare states, which also have an impact on migrants, in terms of social policies, and social and economic integration [7]. An analysis of migrant entrepreneurship should therefore be very closely linked to the specific territorial context.

The framework of action between “life-world and system”

In this paper the concept of mixed embeddedness is linked to the concept of life-world and system described by Habermas [15]. This perspective is based upon a socio-scientific theoretical approach, which sees the individual always in relation to the society and includes the subject as a passive and active creator in the area of tension between structure and system [15]. It is argued, that the framework of action of migrant entrepreneurs is defined by their personal economic, social and cultural resources [4] and the enabling and preventative structures provided in the host country [17]. The concept of life-world is used in relation to the phenomenological and sociological tradition of Alfred Schütz and the social theory of Habermas. Life-world is here considered as the self-evident reality, or, in other words, as the “background” environment of competences, practices and attitudes representable in terms of one’s cognitive horizon. As Fig. 1 shows and following Cohen und Arato [5], three main actors can be described which constitute the structural framework of action: the market, the state and civil society.

Fig. 1
figure 1

The multi- level embeddedness of migrant economies (by author)

The three spheres are here certainly considered as independent arenas. Drawing on Cohen and Arato [5] the relation between the three can be described as follows: “we understand “civil society“as a sphere of social interaction between economy and state, composed above all of the intimate spheres (especially the family), the sphere of associations (especially voluntary associations), social movements, and forms of public communication” [5, p. ix]. In a previous thesis by the authors, civil society and the life-world are seen as overlapping but they still represent two different realities. Against this background, migrant economies have to be understood in their hybridity at the borderline between “life-world and system” and in their ability to unveil transitions, new spaces and possibilities: “they are able to adapt their behavior to different […] contexts. They are in a between position that allows them to know how to deal with both […]. They belong to a minority group and rely on it while simultaneously establishing connections to people outside the group” [20, p. 2].

Migrant economies in policies: EU and Italy

On a European level, the political and economic discourse of migrant economies is embedded in the broader discussion of small economies in general, and the central aims of the current European immigration policy recommendations are missing this direct link. In fact, EU policy in terms of immigration is orientated towards three main issues: integration in the host country, irregular immigration and partnership between European countries [8, p. 1]. Following the Tampere program of 1999 and the Common Basic Principles for immigration policy from 2004, the major aim, defined by the European Commission, is to adopt “a holistic approach to integration” and to assist “EU States in formulating integration policies”. The European integration policy comments put emphasis on the participation of migrants at different levels (social, economic and political) pay attention especially to local activities [9]. In terms of work, integration policy at the European level is mainly orientated towards highly qualified migrants, as the “Blue Card Directive” promotes, for example, the protection of seasonal workers and the promotion of the mobility of skilled migrant workers [9, p. 2]. It is clear to see that EU immigration policy is mostly focused on the integration of migrants into the labour market as employees, and less attention is given to migrants as entrepreneurs and potential stabilizers of local communities [16]. So, migrant economies do not have a central role in integration policy, although, as Kloosterman und Rath [17, p. 1] emphasize, “by becoming self-employed, immigrants acquire quite different roles from those of immigrants, who become workers, and also from those of main stream entrepreneurs”.

In many European OECD member states, migrants have a higher work autonomy rate than locals. This affects especially the northern countries like Finland (14.1 %), Denmark (9.6 %) and other middle European Countries, such as Belgium (15,5 %) and France (10,8 %) for example. The situation is quite different, in the southern European countries like Spain, Portugal, Greece and Italy, because those economies are already based on the existence of small enterprises [19, p. 46]. Italy is a young immigration country [24, p. 19]. Prior to 1970, Italy was a country of emigration. However, since the 1980s the migration flow has constantly been growing and, as recent studies emphasize, also during the economic crisis (at least in the initial phase) immigration flow to Italy increased, rather than decreased.

For a long time, migration policy has seen migrants merely as a cheap and flexible workforce. In fact, their right to be in the country, especially since 2002, is strictly connected to their status as workers. This is related to the restrictive measures introduced by the third and current immigration law (Legge Bossi-Fini, 2002), which compels migrants to have a regular work contract, to obtain a temporary residence permit (permesso di soggiorno) a fact that has come to a head during the crisis. These measures, in conjunction with the increasing risk of unemployment [10, p. 16] have forced many migrants to accept any working conditions. In 2009, when the economic crisis was approaching its peak, the Italian Parliament adopted a major (controversial and radical) reform of immigration law (the “citizen’s security” bill) which made illegal entry a criminal offence and introduced a points-based system for the renewal of “stay permits”. Migrant entrepreneurship in Italy has to be understood against the background of the crisis in the local labour market and the systematic weakening of the status of legal immigrants. Since immigration is a structural phenomenon, entrepreneurship has always been a part of immigration in Italy. The role that migrants have in Italian society is a passive one, they are not seen as active individuals who can contribute to territorial development.


Research field

South Tyrol, the northernmost province of Italy, is one of the two autonomous provinces with a special statute. The Autonomy Statute forms the legal basis for the territory, as the backbone of the protection of the German and Ladin minorities. South Tyrol has a relatively short history of migration. Since the 1990s, the province has become a migration destination for non EU-citizens. However the province tackles the difficult co-existence between the “old” groups, and also shows that the inclusion of the so-called “new” minorities in the territory is a process, which requires a constant negotiation of new forms of co-existence. South Tyrol has always dealt with minorities. One could claim that there should be a greater understanding and the process of social inclusion should be easier than in other Italian contexts. However, the treatment of so-called “new” minorities shows the opposite. The difficulty of incorporating other minority groups in the area lies in the fact that the historic coexistence of different groups is not based on inclusion, but rather on parallelism. The difficulty of the integration of new minorities into an already ethnically defined territory is represented by the late legislation of the phenomenon. In fact, the province was one of the last territories in Italy to stipulate a territorial immigration law, doing so only in 2010.

Research instruments

The on-going PhD-research project follows an approach which aims at a reconciliation of structure and agency and moves beyond the dualism, where social structure is both the medium and the outcome of social action (see “duality of structure” [11]). Berger and Luckmann in their Social Construction of Reality [2] see the relationships between structure and agency as a dialectical one: society forms the individuals who create society. It is about linking micro-sociological and macro-sociological approaches in which “social structure is defined as both constraining and enabling of human activity as well as both internal and external to the actor” [11, p. 45].

This methodological reflection leads to the main hypothesis of the research: the step to economic independence leads on the one hand to new spaces of opportunity, which show great potential for both social and territorial development in local contexts and on the other hand it leads to new dependencies and contradictions, both at the institutional level and at the micro-level. The general aim is to understand the individual (social and economic) action strategies of migrant entrepreneurs between the life-world(s) of migrants and the dominant institutions. The paper tries to provide insight into the following research questions. Firstly, how is the phenomenon characterized in South Tyrol? Secondly, which new possibilities and new limits for migrant entrepreneurs result from the mixed-embedded economic action between life-worlds and system and, finally, how can the individual actions of migrant entrepreneurs be described (are they value-rational [wertrational] or goal-instrumental [zweckrational])? The research project is based on a participatory qualitative research project which makes use of a mixed method approach: expert interviews, narrative interviews, participant observation and data analyses. For the pilot study, statistical data were analysed and a total of three narrative interviews as well as seven expert interviews were conducted in Bressanone and Bolzano.

Preliminary findings

As experts have outlined, migrants in South Tyrol are not seen as active subjects in society, but merely as passive beings who have worse access to the labour market and little space to participate in society. Entrepreneurship among migrants in the South Tyrol of Italy is quite a new phenomenon and less attention has been given to migrant economies in recent years, in terms of both policies and research. Due to the short migration history, in contrast to other Italian regions, the region of Trentino/South Tyrol has a very low number of migrant entrepreneurs. In 2011 a total of 6482 economies were accounted for. Nevertheless, if we consider the statistical developments in recent years, we can state that there has been a constant increase of non-EU entrepreneurs. As preliminary analyses of the statistical data show, the sectors in which non-EU citizens are self-employed are the construction sector (7.5 % in 2012), the commerce and industry (5.2 %) and the hospitality industry (3.2 %). Only 2.7 % are self- employed in agriculture [13]. Entrepreneurs come mostly from Morocco (286), Albania (258), Serbia/Montenegro (126), Pakistan (63) and Senegal (29) [14]. As the preliminary results of the pilot study in Bressanone show, only in the last 8 years have a relevant number of migrants from different countries started up their own business, and this in specific streets of the city. The data analyses suggest that becoming self-employed is not perceived as part of a territorial development process of the local community, but as a merely personal, short-term struggle and more often than not as a survival strategy. The failure or the giving up of a work place seems to be normal. As a consequence, migrant entrepreneurs show a very high spontaneity in their economic activity. In fact, as the next interview quote shows, the flexibility which accompanies their precarious existence is more than relevant. “If the store does not work in this street, I change, I will find another place. I have changed my whole life in 1 day, changing the place of the store is nothing compared” [G.K. (pseudonym) interview by the author, 2013]. In relation to the own migration experience the struggle to survive in the labour market seems to be relativized. Nevertheless, the example of Bressanone shows that for migrants becoming an entrepreneur is perceived as a coping strategy in the face of the precarious labour market situation and the restrictive migration policy. Hence, as in most EU-regions, new immigrants are concentrated in bad jobs corresponding to the “3 D’s”: dirty, dangerous and demanding. Immigrants in an economy with a high share of seasonal jobs like South Tyrol are an ideal flexibility buffer. In conjunction with the increasing risk of unemployment [10, p. 16], many migrants are forced to accept low qualified jobs in any working conditions, which are found in the agriculture sector “raccolta di mele” (“apple picking”) and the cleaning sector “pulizia” (“cleanings”). As the following quote confirms, their own working experience in the form of incorporated cultural capital is not relevant: “I have understand that here they offer migrants only certain types of work, cleanings or apple picking. Their own work experience does not count for anything” [O.T., (pseudonym) interview by author, 2013]. For this interviewee, becoming self-employed was a “rational” decision taken after valuating accurately his own personal resources (in the form of social, economic and cultural capital) and the situation in the labour market which the structural framework of the receiving country was offering him. “I have 25 years of work experience. The employment agency said that I have to change my work. Sorry? I cannot change my experience, my work. For what? To do cleaning? It would be better to return to my country. It would be better, but I cannot. It is not that cleaning is a bad job, but it is not my job. I have a different training and you (the state) have to look for me, you have to use my experience” [J.D., (pseudonym) interviewed by the author, 2013]. Work here is not intended as a merely productive, rational-instrumental activity but, drawing on Hannah Arendt, as a human activity, where the subject itself and the personal attribution of meaning become a central element in the definition.

In describing the capability approach, there are two fundamental questions in this regard: what are people actually able to do and to be? What real opportunities are available to them? As the example of incorporated cultural capital shows, the titles, university degrees and work experiences of migrants are not immediately transformable into a real resource but that, in order to be usable, they have to be recognized on an institutional and on a political level, which very rarely happens. There is therefore an observable gap between the capacities and the capabilities intended as real opportunities. In this perspective and as the following quote shows, entrepreneurship has to be understood also as a possibility to transform a person’s own incorporated cultural capital into a resource and therefore into a real opportunity: “if I want to stay in the country, I have to work. After not finding a job in my sector, I understood, Ok, I have to open a shop and create my own work. If I have to clean I will do it in my shop, but for others I can’t” [G.K., (pseudonym) interviewed by the author, 2013]. Following this line of argumentation, it is argued that migrants are more reliant on close forms of co-operation in their immediate vicinity. In order to transform incorporated cultural capital into resources, there is a significant need for recognition on an institutional level (structural framework). Social and economic capital are directly convertible in a situation of need. “Everything I do is by myself. If I need help, there is my family and my friends. Not the institutions, not the politicians (laughing)! I got the credit to open the shop from my Italian teacher after she became my friend and after she understood who I am” [J.D. (pseudonym) interviewed by the author, 2013]. This quote leads me to the last research question as to whether the individual economic actions of migrant entrepreneurs are more value-rational [wertrational] or goal-instrumental [zweckrational]? As the evaluation of the interviews shows, none of the interview partner show a solely goal instrumental action motivation, whereby they would only maximize their position materially, as is expressed in the idea of the homo economicus. It is argued, that due to their multiple embeddedness, they can be defined neither as capitalized arenas (in terms of a rational- instrumental logic) nor as a pocket of resistance, but that they have to be understood in their hybridity at the borderline between “life-world and system”, as Habermas [15] defines it. In contrast, a more value oriented motivation can be observed. In other words, as the interviews show, actors are intrinsically motivated by values they hold. An extreme example of this can be seen for religious values: “Business is not very good, clients are absent. I could sell alcohol like others do, but it is not allowed in my religion” [O.T., (pseudonym) interviewed by the author, 2013]. Whilst others might call this irrational, Weber [25] argues that these actions have a certain rationality as these values are a means to an end also. “Why I have opened a grocery store? Well, first, I know that here there are a lot of people from my home country and the initial idea was to give them the possibility to buy things from there. So they do not have to go to Bolzano. I help them save time, petrol and money. Than the store is not mine, I have opened it for my children, for their future” [O.T., (pseudonym) interviewed by the author, 2013]. Value oriented motivation should not be considered from a romantic perspective, but drawing on Weber [25] it is argued that humans make sense of the world by attaching meaning to social action. As the above quote shows, not only is the decision to become self-employed a value motivated but so too are activities in everyday life. Value oriented means here, that affective and traditional elements are transformed into a reflexive decision-making process and into motivation which can be justified.


Immigration has become a key feature in the Province of South Tyrol and as such it is no longer different from other regions in Europe in this respect. Thus it is important that the province develops a congruent and outspoken approach towards the phenomenon. The challenge of shaping immigration is clearly twofold, since the province is already marked by three autochthonous linguistic groups living in the territory. Nevertheless, due to the Autonomy Statute granted to the Province of South Tyrol, the protection and coexistence of these autochthonous groups is well regulated and the distinctive traditions and cultures of the minorities well protected. New diversity mixing itself into the already existing one challenges the self-conception and self-understanding of the traditional groups and their identities. This is extremely linked to the fact that migrants are not seen as active contributors to social and economic development but merely as a cheap and flexible workforce. The analyses of migrant entrepreneurship show that there is a slight weakness in Polanyi’s line of argumentation. As Granovetter reasonably argues, the embeddedness of economic action in social contexts is still observable in modern market societies. The question which remains to be analysed definitively is whether migrant entrepreneurs confirm the ambivalences of modernity (based on the processes of individualization, rationalization and differentiation) or do they overcome them by initiating an inverse process (de-differentiation processes for example) through their specific embeddedness in the life-worlds? As the theoretical reflections show, the idea of a multiple embeddedness helps to gain a more differentiated understanding of the individual actions of migrant entrepreneurs. Placing the life-worlds of migrant entrepreneurs within the triangle of market, state AND civil society, allows for a more complex and at the same time more complete perspective on the phenomenon. However, as the pilot study shows, in territories where migrant entrepreneurs have not yet developed in a consolidated (structural) network, it remains more often than not a personal struggle and a survival strategy. As a consequence, migrant economic activities are not recognized as an important part of the territorial development for the whole community. It is argued that the life-worlds are disconnected from the structural framework and especially from the sphere of civil society. This leads to a fundamental consequence: in order to develop more real opportunities or positive freedom of choice there is a significant need to rethink migrants’ role in society. In addition, increasing awareness of the positive part that migrants can play could contribute to a more sensible public discourse on the phenomenon. In order to transform the limits, which result from the gap between life-worlds and systems, into potential, policies have to be rooted in real life-world(s), by strengthening economic action and participation in civil society as an intermediate space between the private sphere of life-world(s) and the state. The potential of ethnic entrepreneurship as a creator of jobs for example is often overlooked. It can be instrumental in reducing unemployment and providing opportunities to more vulnerable groups helping them to get out of the poverty trap [23].


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Lintner, C. Migrant economies as new arenas to rethink policies and territorial development. Eur J Futures Res 1, 22 (2013).

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