Ellenor McIntosh, co-founder of Twipes
“Minority companies” contribute at least £ 74 billion to the UK economy annually and comprise eight of the country’s 23 tech unicorn companies.
According to a new report from the Open Political Economy Network (OPEN), policymakers, businesses and society at large should not only celebrate the positive effects of minority businesses, but also take active steps to help entrepreneurs and small business owners from ethnic backgrounds overcome some of the barriers that are still in their way.
OPEN describes itself as an internationally networked think tank that focuses on migration and diversity. As the founder, explains Philippe Legrain, the new report – Minority Businesses Matter – was produced at the request of MSDUK, an organization that, by its own description, advocates diversity in the supply chains of the public and private sectors. “They came to us and said they would like to do something to raise the profile of minority companies,” Legrain says.
OPEN founder Philippe Legrain
Given the purpose of the report, it may not come as a surprise that it highlights and celebrates the important economic role various companies play, but Legrain, who has authored two books in favor of immigration, says the research itself surprised him. “I was amazed at the contribution minority companies are making,” he says.
According to the report, one in six UK businesses is minority owned and employs around 3 million people. Equally impressive is that 23 of the UK’s 100 fastest growing companies are founded or co-founded by ethnic minority entrepreneurs.
This begs the question of how you define minorities. As Legrain explains, for the purpose of the report the emphasis is on business people who are not white. “So we’re talking about Asian, black, mixed, and others,” he says.
But what exactly is a minority company? According to Legrain, the definition includes sole proprietorships. Companies in which at least 50 percent of the shares are owned by minorities; Companies in which half of the founders are ignorant; In the case of listed companies, 50 percent of the company must be owned by minority shareholders at the time of the IPO.
But does it make sense to classify entrepreneurs this way? For example, the term minority business owner could be applied to a market trader. Someone with a disadvantaged background who nonetheless started a successful trading or import / export company, or an Eton and Oxford trained computer science graduate who runs a cutting edge cybersecurity startup. In other words, minority entrepreneurs are heterogeneous, both in terms of culture, background, education and, of course, the business routes they pursue. So is it helpful to bring everyone together?
Well, there is a risk of generalization, but there is also common struggle. Legrain says the report identifies three hurdles that many, if not all, minority entrepreneurs have in common: discrimination, disconnection from support networks, and self-confidence.
The report suggests that society as a whole – and government and business as a whole – should take action to help minority founders to overcome these difficulties.
What does that mean in practice? A small circle needs to be closed within the report, as the research provides evidence on the one hand that minority companies are above their collective weight in terms of economic contribution, and on the other hand that support is needed to remove existing barriers to success.
However, the truth is that the problems associated with discrimination and lack of access to the networks are real and not everyone will be able to deal with them. “Some entrepreneurs see discrimination and it gives them a burning desire to succeed,” says Legrain. “You overcome the obstacles. But other potentially very successful companies fail. ”
DR. Gordon Sanghera, co-founder of Oxford Nanopore
Dr. Gordon Sanghera
In contributing to the report, a number of successful entrepreneurs argue that minority business owners face particular challenges. Dr. Gordon Sanghera, CEO of Oxford Nanopore Technologies’ biotech business, said: “Simply put, being a minority business founder is not easy – and as things improve, we still have a long way to go to create a more diverse and inclusive community across all sectors, especially science and technology. ”
Ellenor McIntosh, co-founder of the hygiene product company Twipes, pleaded for additional support: “There are so many great ideas and aspiring entrepreneurs – some are already scaling a business and others are just getting started – but we need to do better at providing adequate funding and support. “
The question then is what can be done? A practical step – recommended in the report – would be to change the procurement policies of large companies and public authorities. Pointing out the role minority companies play in areas such as cybersecurity, biotechnology, AI and export, OPEN argues that it is a compelling case for large companies to rethink procurement policies to gain access to often up-to-date expertise to obtain. In general, after all, chain diversity is generally seen as a good thing.
Although attitudes have changed over the years, there is still discrimination preventing buyers from interacting with vendors who don’t look like this or have a similar background.
You can’t change such settings overnight, but there are steps you can take to improve engagement. For example, Legrain suggests that trade associations like the Confederation of British Industries, the Institute of Directors, and the Federation of Small Businesses step up their existing efforts to attract minority members.
This will help ethnic founders make the connections they need to successfully gain access to finance, advice, and inspiration from their peers – and should also help build trust. It is also probably correct to say that as minority businesses grow in success, their founders have the opportunity to set back something through activities such as mentoring.
Finally, the report believes that schools can play a much greater role in building confidence.
Of course, you can point out that at least some of the problems faced by those covered in the report apply to others. People with a working-class background or migrants from the European Union are less well connected than people from the middle and upper classes who attended private schools. Working-class entrepreneurs also face discrimination associated with accents and manners rather than colors. Class is a British obsession, after all.
After a divisive Brexit campaign that used – at least by some – a call to nativism to get a vacation vote on the line, this report is a timely reminder that minorities will play a big role in building the UK’s economic future.