In refugees we trust: Exploring social capital formation from scratch

We are currently witnessing the highest levels of displaced people in history, with close to
66 million in a state of forced migration (UNHCR, 2017). Such numbers have placed a lot of
stress on hosting countries to find solutions for both the social and economic integration of
these populations, and in particular, refugees (Bloch, 2014; Lyon, Sepulveda & Syrett, 2007;
Phillimore & Goodson, 2006). As Ram, Theodorakopoulos and Jones (2008) have suggested,
small businesses and entrepreneurships by migrants illustrates their super-diversity, while
highlighting an important labour option through which integration and independence may be
achieved. Both opportunity-driven and necessity-driven, refugee entrepreneurs opt for selfemployment
in their new countries of residence. In a notable contribution to our knowledge
on the phenomenon, Sternberg, von Bloh and Brixy (2016) have evidenced that refugees may
even be more likely to start businesses than natives. In accordance, they must often build
entirely new social capital (SC) prior to business start-up, also as a strategy for overcoming
other types of capital disadvantage. Recent studies that consider SC in relation to refugee
entrepreneurship (Basok, 1993; van Kooy, 2016; Bizri, 2017; Sandberg, Immonen & Kok, in
press) have emphasised the need to build critical contacts in new countries of residence,
given the high value and instrumentality weak ties can bring.
There is still a dearth of knowledge regarding refugee entrepreneurship in general, and their
processes of SC formation for business start-up in particular. To address this lack of insight,
we are undertaking a study that examines the processes of nascent entrepreneurs in a central
European capital city. The study explores how SC is created in situations where nascent
entrepreneurs are forced to ‘start from scratch’. That is, refugees engaging in entrepreneurial activity, who are dependent on relationships when starting their business, but have little or
nothing to draw from. Leading from this, the research question undertaken in this study is a
processual one: how do refugee entrepreneurs build the SC they require to start their
businesses?
In this paper, we adopt the threefold perspective of SC, as defined by Nahapiet and Ghoshall
(1998): structural, cognitive and relational. Interrelated, the first deals with the discernable
features – network ties – that link actors. The cognitive dimension manifests through shared
language, narratives and codes, while the latter deals especially with bonds that emerge
between actors, associated with trust, trustworthiness, obligations and expectations, as well as
identity and identification. Over time, and through repeated and reciprocal interactions, SC
ties may strengthen, while “relational embeddedness” extends. The source of SC, the initial
formation of SC, examined through values is what we endeavour to examine.