Entrepreneurial transition: the changing profile of ethnic minority business in the West Midlands

A recent report produced by the Minority Ethnic Enterprise Centre of Expertise (MEECOE) provides an invaluable insight into ethnic minority business (EMB) within West Midlands.

As residents and visitors to the West Midlands have all observed, the region is enriched by the prevalence and great variety of ethnic minority businesses. The report Ethnic Minority Businesses in the West Midlands (PDF, 992kb) looks at the traditional view of these enterprises and how they are changing as second and third-generation members of ethnic groups are exhibiting entrepreneurial transition.

People of South Asian descent have often been associated with self-employment (often the only career option available) and the traditional picture of working in corner shops, restaurants and low value and labour-intensive activities involving family groups.

However, MEECOE have shown that, for many communities, this image is changing as they experience entrepreneurial transition. This definition refers to people moving out of ‘traditional’ sectors into less labour-intensive, higher value sectors.

In addition, some groups have experienced a decline in levels of self-employment as transition has seen a move away from low paid self-employment into better paid employment in skilled occupations.

These trends are associated more with members of ethnic groups who are British born, second and third-generation individuals.

Despite these observed trends, barriers to this transition persist, most notably under-capitalisation. Also, minority ethnic groups are under-represented in higher value sectors and employment opportunities.

Whilst some EMBs become high-growth businesses contributing to the region’s growth, the report also recognises that they  play an important role in socially and economically deprived communities. As well as providing accessible resources, they can also inspire ethnic minority entrepreneurs.

The full report contains an analysis of Indian, Chinese, Pakistani, Bangladeshi, Black Caribbean and other ethnic groups. The report also reviews the implications of the research for policy and practice:

  • A need to appreciate the diversity of EMBs (between ethnic groups, between first and second-generation business owners, and between EMBs in different sectors).
  • Other aspects of diversity, not just ethnicity, should be considered as a variety of factors shape the fortunes of EMBs.
  • Business support providers need to develop coherent, consistent and comprehensive data on regional EMBs.
  • Support provision from key agencies needs to be ‘diversity-proofed’ to ensure full accessibility to ethnic minority entrepreneurs.

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