The Centre for Research in Ethnic Minority Entrepreneurship (CREME) has published ten evidence-based recommendations to promote greater success and integration of ethnic minority businesses (EMBs) into the UK business finance and support system. The aim is to build an inclusive entrepreneurial ecosystem that helps businesses thrive.
According to CREME, which partnered with NatWest to produce the Time to Change report, implementing these recommendations could help address the multiple barriers faced by EMBs, including access to finance, markets and quality business support.
As a first step, the report states that support for ethnically-dominated businesses across the UK should be a standard feature of all future plans to tackle racial inequality. This includes integrating them into wider policy agendas for inclusive growth, productivity and innovation.
A more inclusive approach to enterprise is essential to tackle wider structural social barriers such as unequal access to employment opportunities and product markets and gender and ethnic pay gaps.
Concretely, to support and accelerate the growth ambitions of EMBs, concerted action is needed, particularly in light of the adverse impact of the pandemic on ethnic minority communities.
The report notes that EMBs have been particularly affected by the Covid-19 pandemic because of the sectors in which they tend to operate and recommends that recovery support should be focused on those businesses most in need.
The report calls for strong action to eliminate the long-standing problem of discouraging ethnic minority entrepreneurs from seeking finance and business support.
The report also highlights the need for greater accountability from public, private and third sector organisations, including business support agencies, finance providers and large purchasing organisations, for their engagement with EMBs.
Professor Monder Ram, Director of the Centre for Ethnic Minority Entrepreneurship Research at Aston Business School, said: “This major report sets out an ambitious but practical agenda for realising the potential of ethnic minority businesses in the UK.
Ethnic minority entrepreneurial ambition can play a crucial role in the UK Government’s vision to ‘level up’ prosperity in the regions, promote ‘Global Britain’ business opportunities and create a more cohesive society.
“Drawing on the latest research and examples of international practice, the report sets out a comprehensive approach to tackling the barriers faced by businesses from ethnic minority communities.
“We highlight the key challenges and present recommendations – based on extensive consultation with business support practitioners and entrepreneurs – that call on policymakers, companies and entrepreneurs to work together in a new partnership to advance entrepreneurial activity and the UK’s diverse communities.”
The report calls on the central Government and policymakers to set clear evidence-based targets for inclusive entrepreneurship and ensure that SMEs can access quality business support that helps them grow.
Dr Eva Kašperová, a research fellow at CREME, said: “Addressing the barriers faced by SMEs and helping them realise their entrepreneurial potential will require commitment and leadership from Government as well as local actors in the business support ecosystem.
“The current lack of an explicit UK policy on inclusive entrepreneurship could mean that parts of the country are left behind in terms of tackling structural inequalities and enabling entrepreneurs from ethnic minorities and other under-represented or disadvantaged groups to access finance, wider markets and quality business support.
“If experience is any guide, securing the engagement of key stakeholders could be the biggest challenge.”
Andrew Harrison, head of business banking at NatWest Group, said: “As the UK’s largest business bank, we are committed to championing small businesses and supporting growth, but we know that there are barriers that disproportionately affect ethnic minority businesses (EMBs).
“That’s why we want at least 20% of places in our 13 national accelerator centres to be reserved for ethnic minority entrepreneurs. By 2021, 26% of the companies in our hubs were EMBs.
“Only close collaboration can bring about meaningful change and ensure that SMEs get the support they need to reach their full potential. Now is the time to accelerate action, and, at NatWest, we are committed to playing an integral role in the change that is needed.”
In this article, you learnt that:
- The Centre for Research on Ethnic Minority Entrepreneurship (CREME) has partnered with NatWest on the Time to Change report.
- The report sets out ten evidence-based recommendations for advancing the growth potential of ethnic minority businesses (EMBs), including increasing their contribution to gross value added from the current £25 billion a year to £100 billion.