Perspectives on Transnational Entrepreneurship

Abstract

What motivates an individual to leave his/her home country to explore business opportunities? What experiences foster a global entrepreneurial mindset in the individual and can this mindset be taught? What are the implications of transnational entrepreneurship for education and future societies? At the time of writing, there is much change in the world, socially, economically and politically; indications of a shift in global politics to the far right, a migrant crisis in Europe, a renewed focus on Asia and emerging economies, border wall disputes in North America, increasing economic inequality in Europe, political unrest in South America, growing disillusionment with larger collaborative bodies such as the European Union and many individuals suffering from a sense of loss over their national identity and values.

1.1 Introduction

What motivates an individual to leave his/her home country to explore business opportunities? What experiences foster a global entrepreneurial mindset in the individual and can this mindset be taught? What are the implications of transnational entrepreneurship for education and future societies? At the time of writing, there is much change in the world, socially, economically and politically; indications of a shift in global politics to the far right, a migrant crisis in Europe, a renewed focus on Asia and emerging economies, border wall disputes in North America, increasing economic inequality in Europe, political unrest in South America, growing disillusionment with larger collaborative bodies such as the European Union and many individuals suffering from a sense of loss over their national identity and values. While these events are happening, some individuals remain steadfast in their home countries. They seek shelter from the global chaos and try to protect the society from changes associated with internationalization. Yet, others see this disruption as an opportunity for growth and development, embracing the chance to connect with their global neighbors. Individuals are now able to develop and self-manage an international career by taking advantage of the multitude of opportunities afforded to them by our increasingly interconnected world (Inkson and Arthur 2001). Whereby previously, international assignments were characterized by expatriate business people sent on low-risk international assignments to work at a subsidiary for a short, fixed period of time, recently, an increasing number of expatriates are seeking a more high-risk endeavor; establishing their own companies outside their home country minus the safety net of a parent company. Who does this? Why do they do it? How do they do it? The implications of this trend are far reaching, in terms of both the economy and society.

Japanese business people are no different in terms of how they interact with the world. Events such as the Olympic Games in 2020 are drivers of a form of internationalization already observed in many sectors of society. As changes take hold, Japanese human resource management practices are already in the crux of change and individuals are starting to explore new career opportunities outside Japan. This book seeks to share the narratives and lived experiences of Japanese business men and women engaged in transnational entrepreneurship (TE) and the ramifications for society, education, culture and the economy.

We begin by providing an overview of the field of entrepreneurship, how we conceptualize entrepreneurs and the individuals who are the crux of this research, self-initiated expatriate entrepreneurs (SIEEs). We then share cases of Japanese SIEEs who are working throughout South East Asia, before presenting various theoretical ideas to be explored. The book will provide the reader with rich case examples from which we can build knowledge and theory not only in entrepreneurship but also in migration studies, international business and management, and education. It will not provide definitive answers to the multiple questions surrounding transnational entrepreneurship but will shed light on the lived experiences of people who choose to set up businesses internationally and provide an insight into their motivations. We aim to provide substantive theory in the hope that it can help in building theory of a higher level of generality.

1.2 Positioning the Research

Although grounded in the field of international business and management as a study on transnational entrepreneurship , this book is interdisciplinary in nature. Figure 1.1 shows the academic fields related to the research and as you progress through the book, you will see how we have straddled the disciplines to better understand the entrepreneurs. The inherent complexity of nature and society requires us to explore the basic research problems at the interface of different disciplines. According to Klein and Newell (1997), interdisciplinary studies is a process of answering a question, solving a problem, or addressing a topic that is too broad or complex to be dealt with adequately by a single discipline or profession and draws on disciplinary perspectives and integrates their insights through construction of a more comprehensive perspective (Klein and Newell 1997). It differs from multidisciplinary in that the research integrates insights to better understand the subject at hand.

Fig. 1.1

Source Authors

Academic disciplines related to entrepreneurship research.

We take a contextualized view of entrepreneurship in understanding that economic behavior can be better understood within institutional, social, spatial, historical and temporal contexts. Three general trends in approaching entrepreneurship—the economic approach, the socio-environmental approach and the psychological approach—are combined in this book to provide a holistic approach. This has been possible by combining the skills of a pair of researchers who themselves have interdisciplinary backgrounds. The author Yokoyama, Japanese, is a professor of human resource management in Tokyo. She has a background as an assigned expatriate working internationally in the United Nations, before she returned to Japan and became an academic. The author Birchley, Welsh, is a self-initiated expatriate academic, business professor within the same faculty but has an interdisciplinary research background in geography, educational management, entrepreneurship, and experience as an English language teacher, and herself an 18-year expatriate of Japan. Both bilingual, we have combined our knowledge, experience and understanding of Japanese business, education and culture from an insider and outsider perspective with our interdisciplinary backgrounds to present the entrepreneur narratives you will explore in this book. We encourage you, the reader, to engage with these stories, as we have, putting yourselves in the shoes of Japanese transnational entrepreneurs as they journey through their careers, in order to better understand transnational entrepreneurship and the lived experiences of SIEEs in the context of South East Asia.

1.3 What Is It Exactly that We Are Exploring?

First, how do we view entrepreneurship and entrepreneurs? Are the opportunities that entrepreneurs take ‘out there?’ Are they objective? Something to be found? Or are they constructed through a process? Similarly, is entrepreneurship itself a final goal, a final state to one’s career? Or more a step on a path, more ‘transient,’ not a destination? The same can be said for the entrepreneur him/herself. Is an entrepreneur born or made? Is the disposition to become an entrepreneur something in our DNA or the result of our environment and experiences? And if someone decides to be an entrepreneur what makes them successful? Is it a result of experience? Is it luck or good fortune? Let’s first look at entrepreneurship.

1.3.1 Entrepreneurship

Entrepreneurship is a contested term. It is particularly problematic to define due to its flexibility and subjective-ness. Is it an art or a science? Is it both? Since scholars began articulating entrepreneurship, there are many different schools of thought and theories proposed. Table 1.1 summarizes the main theories based on Kwabena and Simpeh (2011).

Table 1.1 Summary of theories of entrepreneurship

Our understanding of entrepreneurship aligns with Cuervo et al.’s (2008), in that entrepreneurship—the function—is conceptualized as the discovery of opportunities and creation of new economic activity.

Many scholars have tried to articulate the field in other ways: Brush (1992) identified four categories; individual characteristics; the environment; the organization; and the entrepreneurial process. Cunningham and Lischeron (1991) suggest five schools of thought: classical economic; management intrapreneurship; leadership; great man; and trait. Hjorth (2004) brings these more concisely to three: corporate, organizational and psychological, while Jack and Anderson (2002) explore more: economic; social; population ecology; trait; psychodynamic; and behavioral. Our study is holistic in nature but it falls within the sociological, social capital and human capital domain.

As there are various definitions and theories of entrepreneurship, so too are there various types of entrepreneurship based upon activities, ecosystems and contexts the businesses engage in and with. Table 1.2 summarizes the main domains of entrepreneurship. Of course, the types can be integrated, such as agricultural social entrepreneurship or transnational academic entrepreneurship. These domains show the sheer vastness of the field.

Table 1.2 Domains of entrepreneurship

Within entrepreneurship, as can be seen above, there are a number of types that are concerned with opportunity recognition, trade and people crossing international borders. It is this element that we are concerned with in this book.

1.3.2 Defining Transnational Entrepreneurship

To narrow the focus of this book, we are looking specifically at transnational entrepreneurship . The fields of entrepreneurship, human resource management and migration studies have all seen increase in literature on transnational entrepreneurship (TE), yet like entrepreneurship itself, the term is vague and contested. The work of Bailette (2018) provides the most contemporary definition of transnational entrepreneurship to date:

Cross border investment to acquire, combine and recombine specialized individuals and heterogeneous assets to create and capitalize value for the company under conditions of institutional distance and uncertainty (2018:34).

Table 1.3 provides a summary of definitions of transnational entrepreneurship based on Bailette’s (2018) review of the literature.

Table 1.3 Definitions of transnational entrepreneurship in the literature

Similarly, Brzozowski et al. (2009), Chen and Tan (2009) and Prashantham et al. (2018) describe the facets behind TE and cross-cultural business and how firms take advantage of cross-cultural opportunities. Figure 1.2 shows the intersection of research streams in TE, as initially outlined by Droi et al. (2009), which illuminates the context of this book.

Fig. 1.2

Transnational entrepreneurship

The definitions above and Bailette’s review of the literature focus on the action and the firm, as opposed to the individual entrepreneur, yet who is the entrepreneur we are studying?

1.4 Who Is the Entrepreneur in This Book?

In our research, we seek to hone in on the individual, recognizing that the actors engaging in TE use a sophisticated network of personal contacts combined with various education and life experiences to set up their ventures. To that end, it is important to explore definitions of international and transnational entrepreneurs—the who of TE. We have established the what, as a form of transnational entrepreneurship , yet how do we define the who in this book? When embarking on the study, we were very clear on who we wanted to focus our research on, yet there are various scholarly definitions of who the entrepreneur actually is, which proved complex to navigate. In general terms, we are studying about Japanese who decide to leave Japan and set up their own business overseas in South East Asia. Academically speaking, are these people transnational entrepreneurs? Are they migrant entrepreneurs? Are they diaspora entrepreneurs? We recognize that the entrepreneurs in our study straddle the context of transnational and diaspora entrepreneurship and we ascertain that we are researching in the field of transnational entrepreneurship .

There is a plethora of terms to label entrepreneurs in the transnational context. Table 1.4 highlights some differences in definition based on the literature and our own understanding.

Table 1.4 Typology of entrepreneurs working internationally

According to research by Inter Nations, an independent research company, in a recent survey of around 14,000 people, they found that the typical expatriate entrepreneur is male, works in business services or consulting, he has a high satisfaction with his work and life balance and more than seven out of ten are in a committed relationship, with a quarter raising children. Their study also found that among business owners and entrepreneurs, 19%—more than six times the global average of 3%—wanted to start their own business in their destination, with 12% citing they are seeking a better quality of life as the reason for their move abroad. Interestingly, Kazakhstan, Malta, Peru and Costa Rica find it easy to attract business owners and Egyptians are more likely to be business owners (18%) than any other nationalities.

Specifically exploring how scholars have defined transnational entrepreneurs, Portes et al. (2002) define them as self-employed immigrants whose business activities require frequent travel abroad and who depend for the success of their firms on their contacts and associates in another country, primarily their country of origin. Drori et al. (2009) class them as an entrepreneur who migrates while maintaining business-related linkages with both their home country of origin and host country, and Rusinovic (2008) defining them as entrepreneurs who use their contacts in their home country to conduct business in their new host country. Many of these definitions show an entrepreneur who maintains a strong link between his/her host and home country, however in our study, although the entrepreneurs do this to some extent, they are more independent in that they choose to start a business in the host country without necessarily having a connection to the home country. Thus, based on a review of the literature, for the purpose of this book, the entrepreneurs in our study are defined as self-initiated expatriate entrepreneurs (SIEEs).

In this sense, if we define transnational entrepreneurs as individuals who carry out cross-national trade and who are embedded in two different societies, then our SIEEs are somewhat different as you will see from their stories, the majority of them do not depend on success, both at home and host country.

Table 1.5 highlights a sample of expatriate entrepreneur research that has been conducted over the last 15 years, found through a search of the term expatriate entrepreneur, in order to position our study in the context of a wider field of research (at the top of the table). All the samples we explored had some degree of difficulty in definitively defining expatriate entrepreneur.

Table 1.5 Sample of expatriate entrepreneur research

By no means is this an exhaustive list, but it does begin to shed light on the types of studies researchers are engaging in that fall under the expatriate entrepreneur umbrella.

1.5 Self-initiated Expatriate Entrepreneurs

To provide a concrete definition of SIEEs, it is helpful to understand self-initiated expatriates (SIEs). SIEs are defined as individuals who expatriate themselves from their home country without the support of an employing company (Inkson and Richardson 2010). Research on self-initiated expatriates (SIEs), in general, has been increasing significantly in the past 10 years (Beitin 2012; Cao et al. 2013; Al Ariss and Crowley-Henry 2013; Doherty et al. 2011). As Vaiman et al. (2015) state, there is no clear definition of SIEs. The definition criteria by Cerdin and Selmer (2014) go some way to defining the SIEs described in our study, in that the SIE engages in self-initiated international relocation. Research on Japanese SIEs, in particular, is an under-explored field. Peltokori and Froess (2009) identified differences between organizational expatriates (OEs) (those who are dispatched by their home companies to international posts) and self-initiated expatriates (SIEs) (those who make their own decision to live and abroad). However, the target group of this study was Japanese expatriates who work overseas.

The key difference is that SIEs in our research choose not to work for an already established company and are not relocated by their company, but to set up their own company in a host country; therefore, they are termed self-initiated expatriate entrepreneurs (SIEEs). Research on this aspect of TE in a non-Western context, particularly Japanese, is a new addition to the field and contributes to Al Ariss and Crowley-Henry’s (2013) call for research that is context-specific.

In order to qualify for this study, the SIEEs presented in this book fulfill the following criteria, loosely based on Cerdin and Selma (2014):

• (a) the entrepreneur was born in Japan or has Japanese nationality;

• (b) the entrepreneur engaged in self-initiated international relocation;

• (c) the entrepreneur has regular employment (intentions) through his/her own company;

• (d) the entrepreneur has intentions of a temporary stay (initially);

• (e) the entrepreneur has skills/professional qualifications.

Thus, the entrepreneur is ultimately, solely in charge of his/her own international mobility and success. In line with Dyer’s (1994) theory on entrepreneurial careers, SIEEs are acutely aware that it is their own choice to veer from a traditional path to engage in an entrepreneurial career. Research on overseas expatriates shows there are many factors that drive an individual to pursue this kind of career, such as their human and social capital (Davidsson and Honig 2003), their family background and personal circumstances (Vance and McNulty 2014), their personality (Baron et al. 2011), their ability to take risks (Hayward et al. 2010), their exposure and connection to the new country (Vance and McNulty 2014), the attitudes and mindsets, global and entrepreneurial, that they exhibit (Yokoyama and Birchley 2017) similarly; these can also be studied in the context of SIEEs.

As suggested at the start of this book, the world is globalizing and becoming even more connected. The migration of people, knowledge and ideas, and the study of the nexus of these elements are increasingly pertinent for our understanding of the world. Particularly in South East Asia, as you will see in Chap. 3, the changing economy and inter-regional migration patterns make a study on transnational entrepreneurship essential for gaining a better understanding of the region and its possible future. From a Japanese perspective, little has been written about Japanese entrepreneurs, let alone Japanese self-initiated expatriate entrepreneurs, in English, hence we are pleased to be able to share the stories of these entrepreneurs with a wider audience to aid understanding of the culture , business and economics of the country and wider region, and to encourage debate on how best to research these themes.

1.6 How Are We Approaching Transnational Entrepreneurship?

In this book, we view TEs through a constructivist lens and interpretive paradigm. We are not the first researchers to use social constructivism and we hope there may be more who expand the research agenda on these ideas. We agree with Chandler (1994) that any phenomenon that results from human agency (such as entrepreneurship) does not occur naturally; it is shaped by social, political, cultural and historical contexts. As this research is set in a constructivist paradigm, that means it is conceptualized as having aspects of both the post-positivist and interpretivist paradigms—ontological critical realism with epistemological subjectivism. In this study, meaning is created through an interaction of the interpreter and the interpreted (Crotty 1998). The findings are produced by the interaction between the interpreter and the interpreted, as situated in society, thus knowledge of the observed, in this case the SIEEs, is constructed rather than discovered.

There are two key principles of constructivist logic: (1) knowledge is not passively received, but rather built up through experiences of the individual over time; and (2) the function of cognitions is adaptive, serving to organize the experiential world rather than discover an ontological reality (Von Glasersfeld 1981). We argue that the SIEE begins a sensemaking process (Weick 1995) through life and that this process takes place through interactions with peers (family , friends, colleagues and mentors) and reflections on their education, home experience and first workplace experience. As they make sense of their environment, they are able to recognize potential opportunities and engage deeper in various social structures.

It follows Charmaz’s (2006) view of a social constructionist approach to grounded theory which allows the researcher to address why questions, such as ‘Why do Japanese become self-initiated expatriate entrepreneurs?’ while preserving the complexity of social life. We accept, as does Charmaz (2006), that (1) reality is multiple, processual and constructed—but constructed under particular conditions; (2) the research process emerges from interaction; (3) it takes into account the researcher’s positionality, as well as that of the research participants; (4) the researcher and researched co-construct the data—data are a product of the research process, not simply observed objects of it. Researchers are part of the research situation, and their positions, privileges, perspectives and interactions affect it (Charmaz 2006: 6).

Now we have established our ontological and epistemological perspective, let’s explore the different levels through which we can analyze entrepreneurs and entrepreneurship (Table 1.6).

Table 1.6 Levels of analysis in entrepreneurship studies

Although there is much research on the meso and macro levels of TE, transnational entrepreneurs, diaspora entrepreneurs, and so on, in this book, we focus on the micro level to a greater extent, considering how it is integrated into the meso and macro levels.

Research has explored the push–pull mechanisms of overseas relocation. Many SEIs have a sense of adventure or desire to travel; sometimes they wish to escape from their current circumstances (Doherty et al. 2011). Inkson and Meyers (2003) and Baruch (1995) were also able to confirm various motivations, like push and pull factors influencing SIEs. These include economic, social or legal drivers and/or an inner sense of adventure. They can be classified as explorers—those who wish to see the world, goal seekers—those who have clear goals, and escapers—those seeking to escape personal situations (Barry 1998 in Inkson and Meyers 2003). What all the studies show us is that the field is broad and the space between each level is relatively fluid.

We initially approached the study through the lens of the theory of practice akin to work by Honig et al. (2010). We too recognize transnational entrepreneurs are ‘resourceful actors’, who are operating in different contexts, and that the process of social construction takes place within the dual structures or dual habitus (Drori et al. 2010). This analytical framework, according to Drori et al. (2010), research should include macro-level social constructs with the understanding that actions are understood by observing social practices (Giddens 1986). When discussing the concept of habitus (Bourdieu 1977), Honig et al. (2010) remind us that when entrepreneurs decide to start a transnational entrepreneurial activity they draw on their knowledge and experience from their schema (Mouzelis 1995). Thus practice is the outcome of one’s habitus (Honig et al. 2010: 8).

1.7 The Study

We have thus established that, within the field of entrepreneurship, we are concerned with the sub-field of transnational entrepreneurship and the individual entrepreneurs who cross borders to set up their businesses. Some of the entrepreneurs featured in our study do not necessarily work within both their home and host context but what is important to note is that these entrepreneurs are expatriates, they are self-initiated; they have made the decision to move abroad and show a high degree of self-efficacy.

The narratives shared in this book seek to explore and help us better understand the current situation of Japanese self-initiated expatriate transnational entrepreneurs working in South East Asia. As social-constructivists work within an interpretive paradigm, we took a case method, qualitative approach, to analyze the narratives produced by 51 cases covering China, Hong Kong, The Philippines, Vietnam, Myanmar, Cambodia, Indonesia and Thailand. Interviews were conducted between 2016 and 2019, in the host country, and coding followed grounded theory protocol (as outlined by Glaser and Strauss 1967; Strauss and Corbin 1990).

The narratives shown in Chap. 3 are based on the interviews conducted in Table 1.7 and represent the circumstances of the SIEEs at the time of interview. Please note that prior to publishing, one case withdrew their detailed case description from the book, however the demographic information is still included.

Table 1.7 Location and time of interviews conducted by Yokoyama

We recognize that narratives can help us to explore how individuals view their environments (Droi et al. 2007). Birchley’s (2013) previous experience of working with narratives when she explored sensemaking among academics helped inform the method of analysis. Open coding was the first step of analysis: findings categories or themes from the data. Secondly, axial coding allowed us to relate categories to sub-categories, allowing us to make connections. In the third stage, selective coding, we coded systematically for the categories that help to make a coherent framework (Strauss and Corbin 1998). It was important to contrast literature as it helped to produce new insights (Eisenhardt 1989) and it proved to be valuable that we had explored a range of literature from various disciplines, as we suggest, that have been able to vary the level of conceptual representation and external and internal. We have aimed to focus on the individual within a particular context with the aim being trying to describe a lived experience in a way that communicates the meaning of the experience (Weick 1979). We have included summaries of the life stories and career paths in Chap. 3 as they help us to see the development of the entrepreneurs and how they comprehend the world around them (Gardner and Laskin 1995: 63–4). They give us, researchers and you, the reader, an in-depth access to understanding how the entrepreneur understands his or her own development and the development of their business (Atkinson 1998: 8). Through the data collection, we have developed trust with the entrepreneurs, seeking clarification on various points and engaging in the networks within which they function. The depth of this engagement, we argue, gives a unique insight into Japanese business people who relocate.

As we start to appreciate the lived experiences of the entrepreneurs, we attempt to develop grounded theory to reveal links between transnational entrepreneurs, opportunity recognition, venture creation, their host countries, Japan and other contextual factors. However, prior to the study we conducted an interdisciplinary literature review in education, career design, entrepreneurship, management, migration studies, sociology and Japanese studies which gave some preliminary conceptual ideas, but as we proceeded with interviews we became aware of additional themes to explore. Akin to work by Honig et al. (2010), we found Bourdieu’s theory of practice (1977) a useful framework to help us initially engage with our findings, but Deci and Ryan’s work on self-determination theory came to the forefront at the end of our study as it helped us to better understand the individual and environmental contexts within the multiple layers (macro, meso and micro) we analyzed (explained in more detail in Chap. 4).

This book comprises four remaining chapters. Chapter 2 presents an overview of the Japanese context. We feel it is an essential element of the book as it helps to position the entrepreneurs in their natural context, or habitus. On becoming aware of the societal and cultural context, we can have a better appreciation of the norms and expectations the Japanese entrepreneurs had to navigate to expatriate themselves from their home country. We cover the demographic changes , impact of globalization, human resource management, entrepreneurship and education to provide a holistic view of the Japanese context.

Chapter 3 presents a brief overview of each country, followed by the case narratives and career paths from all 51 entrepreneurs.

Chapter 4 presents a basic analysis of the countries and entrepreneur trends followed by a more in-depth qualitative analysis.

Chapter 5 considers the future of self-initiated expatriate entrepreneurship in South East Asia, from a Japanese perspective.