Ethnic Minority led businesses make £74BN annual contribution to UK economy
Businesses led by ethnic-minority entrepreneurs contribute at least £74 billion a year to the UK according to a new report published.
The report by OPEN, a London-based think-tank that focuses on migration and diversity issues, was commissioned by MSDUK, a Leicester-based membership organisation that champions diversity and inclusion in public and private-sector supply chains.
Minority businesses make up a sixth of the 6 million businesses registered in the UK and employed nearly 3 million people in 2019–20.
Since Companies House does not collect data on the ethnicity of corporate officers, the report’s estimates of minority businesses’ numbers, employees and gross value added are derived using artificial intelligence (AI) tools to predict owners’ ethnicity on the basis of their name – performed by Gyana, a minority data-science company – cross-checked and refined with human expertise at OPEN.
The report, sponsored by EY, reveals that eight of the UK’s 23 tech unicorns – private start-ups valued at $1 billion (£740 million) or more – were co-founded by minority entrepreneurs. In addition, 23 of the UK’s top 100 fastest-growing companies in 2019 were co-founded by minority entrepreneurs, including the No1, Bulb Energy.
Yet the contribution and unique challenges encountered by minority entrepreneurs are often overlooked by policymakers, the wider business community and the public.
The report finds that minority entrepreneurs succeed against the odds, identifying consistent challenges when establishing and scaling up their businesses. These include direct and indirect discrimination; disconnection from key financial, business and political networks; and disproportionate levels of doubt.
While these challenges hold many minority businesses back, minority entrepreneurs also have particular strengths, notably their drive to succeed, determination to overcome challenges and diversity of skills, perspectives, experiences and contacts.
The report’s findings and recommendations spotlight the disproportionate challenges the UK’s minority entrepreneurs face. Its publication comes at a time of growing global support for the Black Lives Matter movement and its efforts to highlight structural racism and the unique challenges minority communities have faced throughout the Covid pandemic. At the same time, the report stressed that stronger support for minority entrepreneurs would provide a significant boost to the UK’s economic output.
Philippe Legrain, Founder and Director of OPEN, comments: “Against the odds, minority businesses make a huge contribution to the UK, providing valuable products and services, creating good jobs and boosting national wealth. They are helping to tackle the coronavirus crisis and can help build a fairer, more innovative and more environmentally sustainable Britain in its aftermath. So addressing the challenges that still hold minority businesses back is both an economic and an ethical priority.”