Immigrant entrepreneurs choose to start businesses for various reasons. For example, they may encounter obstacles in local job markets or identify promising opportunities in the host country. Additionally, many entrepreneurs draw inspiration from their predecessors when launching their ventures. It is crucial to recognize the challenges and prospects they face to promote overall immigrant entrepreneurship which is beneficial for the economy of the host country.
Who are the second-generation immigrant entrepreneurs (SGIEs)?
Children or grandchildren of immigrants born in a country different from their parent’s homeland, or those who migrate to the host country at the same time and later become involved in entrepreneurial ventures, are referred to as second-generation immigrant entrepreneurs. It has been noted that SGIE is usually more inclined to start a business in the information technology sector than first-generation immigrant entrepreneurs. They are interested in the global expansion of their businesses. (Pruthi & Tasavori 2022, 1, 6.)
What challenges and opportunities do SGIEs face?
A study by Ramalingam (2024, 71) revealed that SGIEs view entrepreneurial activities as the primary source of income for their family. Their families have high expectations that they will continue the family-owned businesses. A difference in expectations of families and SGIE can lead to mental pressure. It can feel like a forced decision, which can complicate their relationship with the family.
However, some SGIEs reported that they appreciate being close to their family-owned businesses. Making decisions about the business makes them feel a valued part of it. SGIEs are more likely to take responsibility from a young age than first-generation immigrant entrepreneurs (FGIEs) since they have been developing relationships with businesses since childhood. The change of ownership should occur with enough time in advance to smooth the transfer process. Support from the government and family is a vital part of SGIEs’ entrepreneurial successes. (Ramalingam 2024, 71–72.)
How can the challenges be mitigated?
There is no specific support system only for SGIEs. Sultana (2025, 15, 42) highlights that business development companies have the potential to encourage immigrant entrepreneurship in a positive way in the host country. With proper business consultations from a business development manager, many challenges SGIEs face can be addressed. For example, the Finnish Enterprise Agency assists immigrant entrepreneurs in establishing and growing their businesses in Finland. The service is available for anyone, so both FGIE and SGIE can take their consultation. Their services are free of charge, which is very convenient for immigrant entrepreneurs. The FGIE and SGIE can specifically utilize the regional development company’s transfer of ownership services that can be used years before the actual transfer happens (LADEC 2025).
As support organizations are an important part of an immigrant entrepreneur’s journey, Sultana (2025, 40, 47) emphasized the need for business development managers to recognize that people from different countries will possess different ways of thinking about entrepreneurship. If managers are trained properly by focusing on the diversity, equity, inclusion and belonging (DEIB) perspective, more businesses by people from different cultures will be established in the host country.
In short, SGIEs may face barriers when they are starting or operating a business in the host country like FGIEs. But with proper support from organizations and families, they can succeed in their entrepreneurial ventures. Given the growing cultural diversity in many countries, it is essential to ensure that second-generation immigrant entrepreneurs receive the support they need to thrive. Their success not only benefits their families but also contributes to the economic and social vitality of the host country.
Authors
Nadira Sultana is a graduate of the Bachelor’s Degree Programme in International Business at the LAB University of Applied Sciences.
Sari Suominen works as Senior Lecturer at the LAB University of Applied Sciences in Lahti.
References
Eren098566. 2025. Eren, K. Meeting, business, office, team. Pixabay. Cited 28 May. Available at https://pixabay.com/photos/meeting-business-office-team-9498211/
LADEC. 2025. Change of ownership advice. Cited 21 May 2025. Available at https://www.ladec.fi/en/for-operating-businesses/change-of-ownership-advice
Pruthi, S. & Tasavori, M. 2022. Staying in or stepping out? Growth strategies of second-generation immigrant entrepreneurs. International Business Review. Vol. 31 (5), 101997. Cited 20 May 2025. Available at https://doi.org/10.1016/j.ibusrev.2022.101997
Ramalingam, A. 2024. The Entrepreneurial Identity of the Second-Generation Migrants during the Covid-19 Pandemic. LEMEX Research Papers on Entrepreneurship. Universität Bremen. Vol. 6, 58–95. Cited 21 May 2025. Available at https://www.uni-bremen.de/fileadmin/user_upload/fachbereiche/fb7/lemex/Forschung/LEMEX_Research_Papers_on_Entrepreneurship/LEMEX_Journal_Vol._6_Anorth_Ramalingam.pdf
Sultana, N. 2025. Immigrant entrepreneurship through the lens of a development company. Case: Lahti Region Development LADEC Ltd. Bachelor’s Thesis. LAB University of Applied Sciences, Faculty of Business and Hospitality Management. Lahti. Cited 21 May 2025. Available at https://urn.fi/URN:NBN:fi:amk-2025052315097
