You live in an area, you buy things from that area, and you interact with the people around you to get not only what you need to live, but what you want in general. At its core, this is the basis of all human economic interaction, and has been since the dawn of man. With ever-present globalism and rapidly developing technology, some people may be drawn to shopping at only certain places or may prefer to buy only from certain businesses. People gravitate towards one another in these circumstances, normally bound by something they hold dear like a cultural background, to form their own, smaller economy in the shadow of the much larger economic forces that drive their neighbors to make rational choices. In these hideaways, these enclaves, where people of the same culture or group interact, an enclave economy forms.
To break it down, enclave economies are the small economies that exist within enclaves, which are groups of culturally similar people. In the past, this would mean physical locations like Chinatowns, where Chinese-Americans and other Chinese diaspora were forced into specific neighborhoods that were filled with businesses that attracted the niche audience of only Chinese diaspora. Like Chinatowns, any other physical grouping of people would be an enclave and would spur its own economy. At one point, New York City was home to the driving force of American economic development, and within itself held other economies that fit niches, selling Chinese vegetables to Chinese-Americans in Chinatown, or selling Italian meats and cheeses to Italian-Americans in Little Italy, two economic entities that remained subservient to but distinctly separated from the larger city economy.
These areas exist with the help of international trade, as you can’t have Italian meats and cheeses existing within a vacuum. The products within these enclaves, as well as the people living within them, normally come from outside the host country. Eventually, the population grows large enough to have an economy that becomes self-sustaining. When a recession hits, a tailor may see less business. However, if that were the only tailor that spoke a certain language within a fifty-mile radius, that tailor will still have a niche, and won’t have to compete for survival against the rest of the industry. With advancements like the Internet, where cultures can form in digital spaces, the future of the enclave economy is online. Even now, niche subcultures communicate and congregate in online spaces that have specific economic outlets, for people who want to solely purchase the most popular brand or things specific to subcultures.
Enclave economies are nebulous structures that could be viewed as negative to some. Some of the business success associated with certain cultural groups quickly leads to racism or xenophobia, as individuals with international connections within enclave economies may experience unprecedented business success. In addition, the very nature of the enclave economy, an economy that is only tangentially connected to the larger economy, allows for some things to slip under the radar. Within enclaves, it’s believed that populations have an easier time operating under the law, whether it be in terms of tax payments or employment regulation. Also, as mentioned earlier, the successes that these communities may find, and the insulation that businesses receive within the enclave, may spur anger towards certain communities.
More importantly, next time you find yourself sightseeing in a Chinatown or browsing a niche online shop, think about the person behind the counter. Whether physically or digitally, odds are that the people you work with will be players in some kind of enclave economy, whether it’s as blatant as cultural ties, or as subtle as what they enjoy in their free time.