(Journal of Developmental Entrepreneurship, Oct 2002 by Kiggundu, Moses N)
Wherever society is highly differentiated along racial/ethnic lines, race and ethnicity have been used to predict entrepreneurial success or failure. Successful entrepreneurs include Chinese (Reddings, 1991), East Indians (Godsell, 1991), overseas Lebanese (Kallon, 1990), and various East and South Asian groups (Koreans, Japanese, Chinese, Indians) operating in Europe and North America. Among the often less successful groups are the blacks in Africa (Hart, 1972; Benedict, 1979; Kallon, 1990; Ramachandran & Shah, 1999), African Americans (Reymonds & White, 1997), Native Canadians, Native Malays (Kiggundu, 1989), Afrikaners in South Africa (Hart, 1972), and Russians or Soviets (Berger, 1991).
Race and ethnicity may be variables representing underlying factors more closely related to entrepreneurial success. For example, Ramachandran and Shah (1999) compared the degree of entrepreneurial success among African blacks, Europeans, and Indian entrepreneurs in Kenya, Tanzania, Zambia, and Zimbabwe. The results show that while European and Indian-owned firms registered positive growth, black-owned firms recorded negative growth. At the same time, the black entrepreneurs had significantly less formal education and lacked useful business networks, which the European and Indian counterparts used to competitive advantage. Therefore, differences in race and ethnicity may be symptomatic of other variables more salient for entrepreneurial success.
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