IMMIGRATION : The New Ethnic Entrepreneurs
America’s biggest cities have been transformed by immigration in the 1990s. Yet, the entrepreneurial impact of some immigrant groups has been far out of proportion to their numbers. Perhaps the most outstanding, and least appreciated, have been immigrants from the Middle East. Even when compared with acknowledged entrepreneurs like Chinese and Cubans, Mideast immigrants’ rates of entrepreneurship exceed virtually every immigrant group in the increasingly complex U.S. economic stew. In a 1996 study published in the Journal of Human Resources, Americans of Middle Eastern descent, including Christians, Muslims and Jews, were twice as likely as the national average to be self-employed. In fact, among all ethnic groups surveyed, only Korean Americans and Russians, mostly Jews, were comparably self-employed.
The rates of entrepreneurship were even more pronounced in five-county greater Los Angeles. Analysis by California State Northridge demographers James P. Allen and Eugene Turner found the highest rates of entrepreneurship among people of Israeli, Iranian, Lebanese and Armenian heritage. Although estimates of the number of Middle Easterners in Los Angeles range up to 300,000 to 400,000, their influence is felt powerfully across a series of industries: garment, jewelry, textile, manufacturing, real estate, retail and distribution.
The phenomenon of certain immigrant groups--by virtue of their historical circumstances, religion, culture or tradition--having economic effects disproportionate to their numbers is not new in U.S. history. Before the Revolutionary War, Quakers and other religious dissenters played a major role in building the commercial infrastructure of the budding nation. These God-fearing people embraced the values of education, thrift and enterprise to a degree unmatched by other Americans of British descent. By the early 19th century, dissenters dominated the emerging trade economy and, in ensuing decades, drove the first stages of industrial development
Immigrant entrepreneurship continued through the 19th century on up to the present era. German mechanics and engineers, arriving in the late 1840s and 1850s, played a preeminent role in building the first foundries and factories across the upper Midwest. Chinese and Japanese farmers, operating in a climate of open hostility, first cultivated the vegetable fields and fruit orchards that would make California the world’s premier produce grower. Other newcomers, mostly Jews from Eastern Europe, launched the New York garment industry despite encountering rampant discrimination. Within 20 years of their arrival at the turn of the century, they controlled between 50% and 80% of all the hat makers, furriers, tailoring shops and garment-makers in the nation. Ashkenazic domination of the garment industry continued until about 1980, when Sephardim and Asians moved into the sector.
The Middle Eastern immigrant story in Los Angeles has taken a different turn. Although they own barely 7% of the companies and constitute a negligible part of the work force in the city’s clothing factories, Middle Eastern immigrants control the higher-end stars of the regional industry, including Guess?, Bisou-Bisou, Jonathan Martin, Tag Rag and BCBG. They are, if anything, more dominant in the textile industry; more than 120 Iranian companies, owned by Jewish, Muslim and Christian entrepreneurs, have helped drive sales of L.A.’s textile industry from $300 million in 1982 to an estimated $20 billion today.
What accounts for the astounding achievements of today’s Levantines in garments and other industries? It turns out they share a characteristic with yesterday’s British dissenters, Asian farmers and Polish tailors: a legacy of persecution at home. Many others, particularly Jews, Arab Christians and Armenians, have a long history of being minorities in great polyglot cities of the Old World: Beirut, Tehran, Jerusalem, Cairo or Damascus.
Such experiences may embolden Middle Eastern immigrants to start a business where native-born Americans may fear to tread. For example, Chaldean Arabs are the small shopkeepers of Detroit; Palestinian Christians own an estimated 600 such stores in U.S. inner cities. Armenians and Greeks, whose cultures have been influenced by the Levantine experience, are renowned for their coffee shops, groceries and specialty-retail stores.
Many of these immigrant entrepreneurs carry with them experiences not only from their original homelands, but also from places where their ethnic diaspora has touched down. At each step along the way, they acquired cultural attributes--marketplace instincts from home, fashion sense from France, an appreciation of rational management in the U.S., for example--that in combination produced a well-rounded business outlook that few can hope to match.
Take furniture-maker Victor Sawan, who has parlayed his own and his family’s odysseys into a supercharged global MBA. Sawan was brought up amid the chaos of Beirut and later emigrated to Brazil. Two decades ago, he came to Los Angeles seeking his fortune.
“Having lived in three different countries . . . I have been opened up to every kind of experience,” the Lebanese entrepreneur says. “I grew up Lebanese, where there is a very entrepreneurial culture. In Brazil, I learned how all the races can mix and learned about fun and enjoying life. You learn humility living in Brazil.”
Sawan also learned something about humility in America. He started off in the furniture business sweeping floors, later graduating to the assembly line. He picked up English and Spanish to supplement his Arabic and Portuguese. He learned how to sell metal bed frames. Eventually, Sawan formed a partnership with Martin Bender, who founded the Wesley-Allen furniture factory in South Los Angeles two decades ago. Today, the company employs 100 workers in Los Angeles, owns a factory in Mexico and sells more than 100 bed-frame designs, many of them by Sawan.
“People always say, ‘You foreigners work too hard,’ ” Sawan says. “But it’s the foreigner like me who comes here to work. When you’re an outsider, you try harder. And the more you try, the better the chance you’ll succeed.”
The Middle Eastern immigrants helping to expand L.A.’s industrial base have begun to shape the city’s character, as well. One prominent Iranian Muslim textile entrepreneur credits Middle Easterners with transforming downtown into an apparel bazaar of low-cost wholesale shops, open-air markets and specialized businesses. The district, located south and east of the corporate high-rises near the Civic Center, is dotted with Israeli, Persian and North African restaurants.
Middle Easterners’ experiences in France have also helped to turn the city into a fashion capital. “Tunisians and Moroccans went to France and got exposed to a culture that has a great sense of taste,” says Orly Dahan, vice president of Tag Rag, a fast-growing sportswear firm based in Los Angeles. “When you’re an immigrant and not a scholar [and] without much money, all you have in your favor is your good taste.”
Other immigrants link their entrepreneurial skills to older traditions. Uri Harkham, founder of Jonathan Martin, comes from a distinguished Baghdad Jewish family, which traces its roots to the Babylonian captivity following the destruction of the First Temple. “We had a good life there,” Harkham recalls. “We were strong and educated. We were the doctors, the merchants. We worked well with the Turks, the British and the old monarchy.”
In 1951, with anti-Jewish sentiment growing in the wake of the establishment of the state of Israel, the Harkhams reluctantly left their ancestral home. It was a wrenching change for a proud people; an ancient flourishing community of more than 400,000 was suddenly reduced to barely 1,000. In Israel, the Harkhams, like many Sephardim, found themselves second-class citizens, living in tents without running water or electricity, lorded over by the often arrogant, socialist-minded Ashkenazic Israeli elite.
By his 16th birthday, Harkham had had enough and moved to Australia. Within a decade, he and his brother, David, built a successful clothing business. In 1975, they moved to California, where he continued to develop his concept of “soft clothing,” the kind of easy-to-wear clothing that appeals to people living in climates pleasant all year.
Today, Harkham works out of a busy factory and design shop near the downtown apparel mart. He believes that the traumas endured by Middle Easterners have made them tougher competitors than virtually any group in society and important contributors to the increasingly fast-paced, entrepreneur-driven economy of this region.
“At the end of the day, the Middle Easterners are all traders at heart. Arab, Jew, Persian or Christian, it doesn’t matter,” suggests Harkham, whose company’s annual sales exceed $100 million. “We have the ambition and the drive others don’t. The fashion business is so fast you have to be willing to be a gambler and live on the edge.”*
