Roma Entrepreneurs in Hungary
Brief summary
Compared with the Roma population as a whole, entrepreneurs have a better educational background, their level of professional education is higher, and at the same time a high proportion were also actively working prior to launching their own enterprise.
While overall nearly half of the Roma community lives in conditions of segregation, within which well above a fifth live in ghetto-like conditions, among the entrepreneurial Roma these indices reflect a much better situation. Although Roma entrepreneurs generally live in better circumstances, there are still successful enterprises to be found in segregated and even in ghetto-like surroundings.
Relative to the Roma population as a whole, the families of entrepreneurs are characterised by considerably better living conditions and the majority of their homes are furnished with the necessary infrastructure.
Roma entrepreneurs have significantly higher incomes than non-entrepreneurial Roma; consequently, the bread-winning capacity of the families of entrepreneurs are considerably higher than for average Roma, meanwhile entrepreneurs, to the extent of their abilities, show more solidarity with their relatives than their poorer compatriots. Nonetheless, income conditions show a varied picture. Among the entrepreneurial and non-entrepreneurial families in the lowest income bracket (tenth) differences are only in the scale of their poverty: from deep poverty to poverty.
However, in the upper seven income tenths the income difference per capita between entrepreneurial and non-entrepreneurial families is between 2.5 and 1.8; in these strata entrepreneurial families have a two to two and a half times better standard of living than the families of non-entrepreneurial Roma. However, this two to two and a half times difference is sufficient to be able to talk about a relatively good standard of living-in particular in the upper two or three income tenths.
Among entrepreneurs the proportion of those with strong network capital is significantly higher than in the Roma population overall; in this group network capital also converts into financial capital. Total segregation or total assimilation, nevertheless, is destructive to social networks, and among those who live in a mixed neighbourhood setting there is a much higher proportion of those with good networks.
Our research leads us to believe that the best index for showing the profitability of Roma enterprises is the income scale of entrepreneurs. Although the sector of operation, the duration of the enterprise and so on has a serious effect on the success and profitability of an enterprise, personal network capital is among the most significant factors. This is of a human character and, as such, can be developed and improved, moreover appropriate 'networking', which produces the connections necessary for an entrepreneurial existence, or the cultivation of connections can both open great perspectives in developing Roma enterprises.The data that was compiled in the research clearly shows that we can almost exclusively refer to Roma micro-enterprises, we found no small or middle-sized enterprises in the legal sense.
The vast majority of the entrepreneurial group has one enterprise, i.e. they themselves are private entrepreneurs, agriculturists or in their ownership there is an enterprise in another legal form; 70.5 percent of the studied enterprises are private entrepreneurs or agriculturists, 20.7 percent are in a limited partnership, 4.8 percent are limited companies, with 4 percent remaining (e.g. co-operative, non-profit organisation, etc.).
The majority of the enterprises are active in (the building) industry, the second largest group is that of mercantile enterprises, while enterprises belonging to the third group operate in a sparse sector of one-two percent (transport, security services, education, other community services), and contrary to expectations relatively few entrepreneurs work exclusively in the field of agriculture.
Half of the entrepreneurs have experienced external pressure of some sort or other, these are forced entrepreneurs who have 'escaped forwards', beginning an enterprise because they were unable to make ends meet from their previous income. The degree of pressure is strongly influenced by the strength of network capital, where objective and personal reasons both play a role. Segregated Roma with limited network capital have no choice but to 'escape forwards', on the other hand those with good or strong network capital can have reasonable confidence in their success and thus do not feel that they have acted under pressure. In a characteristic way, the primary capital available has less of an effect on the pressure experienced in an enterprise; but only those who have the primary capital available, personally or through their family, will launch into an enterprise. Lack of finance is evidently an impeding factor. Prospective entrepreneurs whose decision to launch their enterprise is not a result of pressure make better choices in activity-sector and later are more successful. Moreover, those with a good or excellent potential for establishing networks are able to have much greater confidence in the success of their entrepreneurial venture; they considered their choice less or not pressure induced.
Entrepreneurs in segregated circumstances are unable to draw on bank loans or state support in establishing their businesses. A number of reasons lie behind this for example prejudice and discrimination, a low level of education, and the lack of collateral. The unavailability of bank loans for those living in segregation draws attention to the need for a credit fund (or institution) to be established, with the involvement of the appropriate governing organs, to satisfy the primary and operational capital demands of Roma enterprises in particular. That in turn should be independent of the financial situation of the entrepreneur and their family. The majority of Roma entrepreneurs-micro and small enterprises, private entrepreneurs, family partnerships, and agriculturists-are basically only able to launch a business with cash; this phenomenon in particular illustrates the need to rethink the entire initial financial support system.
The chances of development for Roma entrepreneurs show inequality: those with a low level of schooling, in segregated circumstances and with correspondingly weak personal networks experience substantially worse business flow than those at the other end of the spectrum. Enterprises operating in agriculture or in more than one sector also have less chance of development. Moreover these reduced probabilities are further decreased by the fact that more successful enterprises have broader access to various types of development support.
On average only a fifth of Roma enterprises receive any form of support in foundation, operation, development or some human resources aim, while the proportion of enterprises in need of support is far higher. Private entrepreneurs, who constitute the largest group among the enterprises, receive the lowest level of support; on the other side, the organisations with the highest capacity to assert their interest (co-operative, non-profit organisation, etc.) receive the most, despite their proportional insignificance compared to the bulk of enterprises. The chances of Roma entrepreneurs gaining access to the various types of support are not equal: those in segregated circumstances with poor personal networks, especially the building industry sector, have considerably less opportunity than the rest.
We viewed entrepreneurial expertise as a more multifaceted and varied issue than entrepreneurial knowledge. While the latter can be learned in formal education and primarily represents pieces of theoretical information, entrepreneurial expertise is comprised of information and knowledge acquired through experience, reflexes and behaviour patterns inherited from the cultural micro-environment. Examining the resources for entrepreneurial expertise we concluded, amongst other things, that the future target should not necessarily be to increase the quantity and scale of formal education, but a more complex form of assistance.Over a quarter of the examined Roma entrepreneurial group, that is, 26.4 percent, successfully operate an enterprise, alongside that are two other strata of entrepreneurs with similar stature: the 36.7 percent average group, contending with average difficulties and the 36.9 percent ratio of the deficit-making and/or uneducated group.
Our data demonstrates that the Roma who couple skilled workmanship in a particular field with a strong tradition of family entrepreneurship secure far better opportunities and livelihoods even with this level of education, than others with a higher level of education.
The entrepreneurial expertise and potential, which is one of the prerequisites of success, truly has an effect when entrepreneurial tradition and education are present concurrently. Our hope is that in the future entrepreneurial expertise through education will be available to more Roma, yet this will be lacking in tradition for many, and for that reason a system, as yet undeveloped, of transferring labour and entrepreneurial tradition needs to be formulated. Processes like mentoring or incubation methods could to some extent, even if not entirely compensate for all that these would-be entrepreneurs are unable to bring from home.
Roma entrepreneurs with the appropriate conditions have the same chances of success regardless of age, and segregated circumstances do not present an obstacle to this stratum with better preconditions. Similarly, the lower level of success of entrepreneurs is due neither to their age nor to their worse situation, but rather to their lower level of education and/or lack of labour or entrepreneurial tradition and entrepreneurial and work culture.
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