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A recent virtual event organised by NatWest and The Entrepreneurs Network shone a spotlight on the challenges faced by entrepreneurs from diverse ethnic backgrounds – and the policies needed to help them succeed.
Last updated: 29 Oct 2020 5 min read
NatWest and The Entrepreneurs Network (TEN) this week organised an online seminar addressing the challenges and opportunities for UK entrepreneurs from diverse ethnic backgrounds. The session focused in particular on issues such as government support, Black representation in the banking sector, and the importance of Black role models.
Entitled Supporting Ethnic Diversity In Entrepreneurship, the event was hosted by Alison Cork, entrepreneur and member of TEN. Taking part in the discussion with Cork were:
Badenoch opened the session by talking about the government’s commitment to tackling inequality, in particular access to support for entrepreneurs. “The recent British Business Bank report, Alone Together: Entrepreneurship And Diversity In The UK, has highlighted the obstacles facing entrepreneurs from ethnic minority backgrounds,” she said. “These include facing more challenges in starting and growing businesses, while their median turnover levels and productivity rates are lower.”
Lack of access to finance is one of the major challenges facing ethnically diverse entrepreneurs, Badenoch added. “The evidence tells us we need to do more to fully understand how race, gender, geography and income are shaping individual entrepreneur experiences.”
She said the government is working hard to turn its belief in equality into action. “We always look at who is getting government money to make sure it is distributed more fairly: for example, 65% of Future Fund funding – over £400m – went to companies with ethnically diverse management boards.”
Wilfred Emmanuel-Jones expressed the frustrations of many Black entrepreneurs. “If you are Black and trying to start a business, it is a nightmare,” he said. “You have white people in positions of power making [finance] decisions about what would and would not make a successful Black business. My experience is that it’s a fight to get the same opportunities as others.
“But the big question is: how do we go from talking about these challenges to actually taking action?”
Andrew Harrison said a recent study carried out by NatWest found that 44% of entrepreneurs with a Black-African background would not apply for bank finance because they didn’t expect their application to be looked at fairly – compared with just 4% of white people. “That is shocking and points to the fact there is something structurally not right in terms of how we engage, support and speak to these customers,” he said.
“If you are Black and trying to start a business, it is a nightmare. My experience is that it’s a fight to get the same opportunities as others. But the big question is: how do we go from talking about these challenges to actually taking action?” Wilfred Emmanuel-Jones, The Black Farmer
Samuel Okafor added that NatWest has recently introduced a specific target for Black representation among senior management in an effort to address the issues raised by Emmanuel-Jones.
Professor Monder Ram said any initiatives developed by the government or financial sector need to address the fact that the disadvantages faced by minority ethnic entrepreneurs tend to be systemic. “So we don’t need solutions that ‘fix’ these entrepreneurs – we need ones that fix the system,” he explained.
In terms of practical steps, Professor Ram pointed out that the government is a major procurer and is capable of changing its policies to improve access to tenders to businesses run by people from ethnically diverse backgrounds. “This is a way to send an important message,” he added.
Cork asked the panel about the potential role of education in helping Black entrepreneurs access more opportunities. But Melanie Eusebe echoed Professor Ram’s point and warned that a focus on education risked perpetuating the idea that the problem lies with the entrepreneurs themselves.
“We all have to go through a learning journey – and that includes white men as well,” she said. One important step, Eusebe added, would be to improve the visibility of role models from more diverse backgrounds. “It is about showcasing successful entrepreneurs: after all, you can’t be what you can’t see.”
Professor Ram added: “We also need to change the narrative we perpetuate about ethnic minority entrepreneurs: at CREME, we have recently carried out the biggest study of ethnic entrepreneurs for the Federation of Small Businesses, and it found that this group is more innovative, more likely to grow their businesses and more likely to export. These are exactly the qualities that will help the UK emerge from the pandemic.
“These businesses are providing real leadership, but this is not being sufficiently acknowledged.”
Cork also asked the panel about the potential consequences of Black or other ethnically diverse businesses focusing on delivering solutions for their own communities. Eusebe said: “I think we need to be careful here: if certain communities are more affected by structural racism and they direct their enterprises to tackling those problems, it limits their potential customer bases and turnover.”
Emmanuel-Jones added: “What you need in business is volume, which means being part of the mainstream. If you’re only offering a service to your own specific community, you are set up to fail.”
Leadership and Management