|Ethnic minority businesses are estimated to contribute £25-£32 billion to the UK economy per year, and women-led enterprises contribute around £70 billion, but sadly they are still very much under represented. The paper Barriers to Ethnic Minority and Women’s Enterprise, published by the Enterprise Research Centre, reviews the research evidence on enterprise diversity. The research review focuses on key issues including access to finance, market selection and management skills. The following are some of the key findings that were concluded with the research:
- Particular ethnic groups find it more difficult to obtain credit for their businesses.
- Perceptions of ethnic discrimination discourages some ethnic minority businesses from applying for bank loans.
- Under-resourced immigrant entrepreneurs tend to focus on the same low-cost business niches such as small-scale retailing and catering. This sadly increases the risk of market saturation, difficulty in standing out and a higher risk of failure.
- Female entrepreneurs perceive financial barriers higher than male entrepreneurs and avoid getting into debt to start a business. This has a knock on effect relating to size and resources.
- Women-led firms are typically smaller and overrepresented within service sectors.
- Women-owned enterprises typically start with lower levels of resources.
- 20% of female entrepreneurs can be masked by dual ownership: joint male/female partnerships.