Companies being run by leaders from ethnic minority backgrounds contribute at least £74bn a year to the UK economy, a new report has found.
Ethnic minority entrepreneurs are succeeding against the odds, according to the Minority Businesses Matter report, but are identifying challenges when establishing and scaling up their companies.
The research, published on Wednesday (February 10), was carried out by OPEN, a London-based think-tank that focuses on migration and diversity issues, and was commissioned by MSDUK, a Leicester-based membership organisation championing diversity and inclusion in public and private-sector supply chains.
The report analysed the economic contributions made by minority-ethnic-led businesses to combating the coronavirus crisis, exports, innovation and levelling-up deprived areas, and to national wealth and local jobs.
It found that ethnic minority business leaders face “consistent” hurdles, including direct and indirect discrimination; disconnection from key financial, business and political networks; and disproportionate levels of doubt.
It follows a recent report that found the number of black people leading the 100 largest firms in Britain has fallen to zero despite numerous commitments from government and business to address diversity at executive levels.
Eight of the UK’s 23 tech unicorns – private start-ups valued at $1bn (£740m) or more – and 23 of the UK’s top 100 fastest-growing companies in 2019 were co-founded by minority entrepreneurs, including energy supplier Bulb which ranked number one for fastest growth.
However, the contribution and challenges faced by business leaders from ethnic minority backgrounds are often overlooked by policymakers, the wider business community and the public, the report found.
Philippe Legrain, founder and director of OPEN, said: “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.”
We’re celebrating the success of the UK’s black-owned businesses – and we want to tell you all about them in our #IAmBOB newsletter!
Following the success of the #IAmBOB campaign, BusinessLive is launching a newsletter all about UK black-owned businesses.
Once a month, we will share news, features and comment from companies led by black business leaders – from start-ups and SMEs to blue-chip corporations and household names.
Mayank Shah, founder and chief executive of MSDUK, said the report shows the UK economy is “much better off” because of the contribution of ethnic minorities at a local, regional and national level.
“Immigrants move to the UK in search of a better future for themselves and their families, which makes them work harder and seize every opportunity to succeed,” said Mr Shah.
Dr Gordon Sanghera, chief executive of Oxford Nanopore Technologies, said being a minority business founder was “not easy”.
He said the UK still had a “long way to go” to create a more diverse and inclusive community across all sectors, especially in science and technology, but “some progress” had been made in life sciences businesses.
“It’s encouraging to see how many minority founders are leading efforts in domestic and international scientific work to fight Covid – a testament to the contribution of minority entrepreneurs to this country,” he added.