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Small
businesses are very much part of contemporary informational or post-industrial economies.
They are-among other things-sources of innovation, employment growth and of social
mobility. As numerous examples from many cities in the European Union, and in advanced
economies in general, illustrate, immigrant entrepreneurs are part and parcel of this
development. These immigrants are affecting advanced urban economies in various ways as,
for example, by revitalizing formerly derelict shopping streets, introducing new
('exotic') products or by fostering the emergence of new spatial forms of social cohesion.
Setting-up a business often means one has to revert to informal economic activities to
survive. The specific mix of informal and formal economic may have significant
implications for the process of socio-economic incorporation of newcomers, and, therefore,
also for patterns of social cohesion of the societies involved more in general. 
Notwithstanding the apparent diversity of
both the origins of the immigrant entrepreneurs and the various types of businesses they
have established in different countries, there are clearly similar underlying processes.
Lacking in most cases access to significant funds of (financial) capital and also deemed
lacking in appropriate educational qualifications, most fledgling immigrant entrepreneurs
can, in principle, only set up shop in markets with low barriers of entry in terms of
capital outlays and required educational qualifications. Most immigrant entrepreneurs are,
hence, funnelled towards market segments at the lower end. In these market segments,
production is mainly small-scale, usually very labour-intensive and low in added value,
while cut-throat competition reigns. Accordingly, many firms fail but due to the low
barriers of entry, there are also many new start-ups. Cutting costs is an obvious strategy
in these markets. This can be done in formal ways, but the scope here being rather
limited, many firms (especially recent start-ups) may revert to informal practices by
cutting corners with respect to taxes, labour regulations, minimum wages, employing
workers who are not allowed to work (e.g. children, undocumented immigrants), and also,
possibly, by engaging in other, illicit, transactions. Immigrant entrepreneurs are,
consequently, expected to be over-represented in specific kinds of informal
economic activities.
These informal economic activities--and,
therefore, also the specific mix between informal and formal economic activities--may be
articulated in different ways in the various countries as they are highly contingent on
the institutional framework. Differences between countries with regard to policies towards
immigration, traditions of immigration and insertion of immigrants, paths of economic
development and, also, with respect to the regulatory frameworks (especially the welfare
state and its concomitant arrangement of socio-economic rules and regulations) and the
associated enforcement regimes will generate different trajectories of opportunities for
economic activities (formal and informal). This may result in diverging paths of
integration for immigrants on a national and even on a local level with significant policy
implications.
The rise of immigrant entrepreneurship and
its relationship with informal economic activities is a very complex and, in some
respects, rather opaque process involving important questions from both a scientific as
well as a policy perspective. Seen from a policy maker's point of view, the most crucial
questions centre, eventually, on the dilemma of giving priority to enforcing rules on
economic activities (upholding the rule of law) versus allowing certain activities in
order to facilitate the process of socio-economic incorporation of immigrants which is
essential to maintain and promote social cohesion. This latter option may encompass
changing the regulatory framework (a formal change o f rules, as is the case in so-called
economic development zones), or tolerating, in principle, unlawful activities (a change in
enforcement), or upgrading the skills of the entrepreneur and thereby increasing the
competitive edge. To be able to grasp this dilemma on a higher level, a more profound
understanding of the dynamics behind the involvement of immigrant entrepreneurs in these
informal economic activities in its complex socio-economic context is imperative.
Immigrant entrepreneurship and the informal
practices of immigrant entrepreneurs have been the subject of a number of studies in
various countries in Europe, North America and Australia. However, overall results have
contributed to a rather fragmented and also to a , in a certain sense, skewed pool of
knowledge as most researchers have confined their analyses solely to one country, its
welfare state and its regulatory framework and have emphasised cultural practices and
preferences of immigrant ethnic entrepreneurs, and more or less ignored the dynamics of
markets in advanced economies. The next logical step, therefore, is doing research on
immigrant entrepreneurs on the fringes of the formal economy from an international
comparative perspective that will explicitly address the processes of economic change as
well as the institutional arrangements.
Immigrant businesses are crucial economic
nodes in social networks of immigrants linking production and consumers in concrete
organizational and spatial ways. These immigrant businesses can also be seen as potential
primary nodes of informal activities. As in the wider economy, informal economic activity
may sometimes involve criminal activities. The aim of the project is to create an
innovative, multi-disciplinary trans-EU network. This network will focus on informal
economic activities of immigrants as they may have significant implications for the
process of socio-economic integration and, thus, of the social cohesion of the societies
within the EU.
Immigrant businesses engaged in informal
economic activities are, on the one hand, in breach of the law, but, on the other, they
may provide immigrants with better economic opportunities. Policy makers, therefore, have
a dilemma. The international network compare informal economic activities by taking
immigrant entrepreneurship as the strategic starting point. The project entails a
comparison of the role of immigrant businesses in the underground economy as well as an
assessment and evaluation of rules and regulations and existing policy approaches related
to informal and criminal economic activities in European Union member states and an
affiliated member. The following objectives are addressed:
How has immigrant entrepreneurship evolved
in the last two decades and what are the structural determinants of the observed trends in
the selected countries?
What kind of profiles of informal economic
activities do the immigrant entrepreneurs display? How are they related to activities in
the mainstream economy on the one hand, and, on the other, to the regulatory framework (in
particular the welfare state) and the enforcement regime?
What significance has to be attributed to
these (semi-)informal economic activities in terms of combating social exclusion and
socio-economic incorporation?
For policy makers and practitioners, how
is the crucial dilemma between upholding the law and facilitating immigrant
entrepreneurship approached in the selected countries? What are the underlying
determinants and which best practices can be identified for dealing with these issues? 
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