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ETHNIC MINORITY BUSINESS IN THE UK: KEY DEVELOPMENTS IN POLICY

ETHNIC MINORITY BUSINESS IN THE UK: KEY DEVELOPMENTS IN POLICY. MONDER RAM Professor of Small Business Small Business and Enterprise Research Group De Montfort University. OBJECTIVES. Basic profile of EMBs Assess 3 policy responses Identify policy challenges.

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ETHNIC MINORITY BUSINESS IN THE UK: KEY DEVELOPMENTS IN POLICY

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  1. ETHNIC MINORITY BUSINESS IN THE UK: KEY DEVELOPMENTS IN POLICY MONDER RAM Professor of Small Business Small Business and Enterprise Research Group De Montfort University

  2. OBJECTIVES • Basic profile of EMBs • Assess 3 policy responses • Identify policy challenges

  3. ETHNIC MINORITIES: SOME BASIC FACTS Population size • According to the 2001 census, ethnic minority groups make up about 8% (4.6 million) of the UK’s total population (58.7 million). Geographical distribution • Tend to be clustered in particular urban areas or aggregations of urban areas. Greater London (47.6%), West Midlands (13.6%),Yorkshire and Humberside (7.6%) and NorthWest and Merseyside (6.8%)

  4. ETHNIC MINORITIES: SOME BASIC FACTS Immigrants and UK-born ethnic minortites • In 2000, about 9% of the working age population of Britain (approximately 4.5 million people) were born in another country – and hence are immigrants Unemployment • Unemployment rates vary from 21.3%(Bangladeshis), 16.1% (Pakistanis), 14.1% (Black African), 11.6%(Black Caribbean) to 7.3%(Indian) and 6.0% (Chinese). In comparison, the unemployment rate for Whites is estimated to be 4.7%

  5. ETHNIC MINORITY BUSINESSES (EMBs) • Defined as 51% ownership • There are roughly 200,000 EMBs - some 6% of all businesses in the country. 51% of ethnic businesses are in the retail sector -75% of all convenience and retail outlets and 95% of independent retailers in London are Asian owned • EMBs tend to be under-represented in consumer services (12% v 23% white) and construction (2% v 13%).Female owners of EMBs are comparatively rare too – 19% compared with 30% white • Relatives are more likely to be employed in EMBs (37%), as was the case with White-owned enterprises (19%) (Source: Critical Research for Barclays Bank, June 2000)

  6. THE SUPPORT NEEDS OF EMBs IN CONTEXT • The Academic Debate • Three perspectives: • Cultural • Structural • ‘Mixed embeddedness’ • Sector • Concentration in ‘traditional’ sectors • Feasibility of ‘break-out’? • Size • Predominance of ‘micro-enterprises’ • Location • Implications for finance and business support

  7. LESSONS FROM PREVIOUS POLICY EXPERIENCE • Low take-up of ‘mainstream’ business support Variety of responses: • Specialist EMB support agencies • Urban regeneration programmes • Membership-based groups • Importance of ‘awareness’, ‘sensitivity’ and ‘credibility’

  8. POLICY RESPONSE 1: THE ETHNIC MINORITY BUSINESS FORUM • Advisory body to government • Improving monitoring and quality of business support information • Promoting procurement • Encouraging ICT take-up • Access to finance

  9. POLICY RESPONSE 2: AN AGENDA FOR SUPPORTING EMBs • Coherent and integrated business support • Promoting market diversification • Building capacity in support organisations • The need for an engagement strategy • Evaluation and dissemination of good

  10. POLICY RESPONSE 3: FINANCE AND EMBs • Need for a more strategic approach to handling relationships with EMB owners • Need for procedures for monitoring the ethnicity of their clients • Greater transparency in loan evaluation criteria, in order to help narrow the gap between expectations and reality. • Need for steps to establish trust-based relationships through proactive engagement with ‘difficult to reach’ groups

  11. CURRENT POLICY CHALLENGES AND PRIORITIES • Emphasising ‘quality’ of management. • More transparent monitoring of diversity issues by public and private sector organisations • Continued attention to access to finance issue: Is response of banks adequate? • Need to increase attention paid to new migrant groups

  12. REFERENCES • Ram M. and Smallbone D. (2001) Ethnic Minority Enterprise: Policy in Practice, Final Report prepared for the Small Business Service, June 2001. www.sbs.gov.uk • Ram, M., Smallbone, D. and Deakins, D. (2002) The Finance and Business Support Needs of Ethnic Minority Firms in Britain, British Bankers Association Research Report.

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