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Ethnic Minority Businesses doing more for British Economy

Ethnic Minority Businesses (EMB’s) are doing more to regenerate deprived areas of Britain than indigenous companies, a new survey has found.

The first ever Social Economic Impact Report by Minority Supplier Development UK (MSD UK) found that EMB’s grew their work force by 4%, compared to the national average of 2% whilst also offering three times as many placements for interns and apprentices.

It is in spite of the fact that a majority of the companies surveyed were located in areas of lower than average educational attainment and above average unemployment.

MSD UK – a not-for-profit organization which campaigns for a more inclusive supply chain for Britain’s private and public sector corporations – surveyed more than 350 companies across the country for the report.

Mayank Shah, Director of MSD UK, told The UKAsian: “Ethnic minority businesses make a huge contribution to the economy.  But they are still under-represented in the mainstream supply chain both in the public and private sectors.  I think if public and private sector corporations open up their supply chain to ethnic minority suppliers it would lead to much greater economic balance in this country.”

The ethnic minority-owned companies surveyed employ more than 13,000 people, less than half of whom are workers from non-white backgrounds.  “This shows that EMB’s are far more inclusive, contrary to popular perceptions”, Mr Shah says. 

“These businesses represent the perfect vehicle for economic regeneration so it’s imperative that we get the public and private sector to engage ethnic minority businesses so that it will encourage job creation and lead to more disposable income to kick-start the economy.”

Whilst the private sector is becoming increasingly inclusive – MSD UK’s client list of corporates include IBM, Capital One and Exxon Mobil among others – the public sector remains a challenge for Ethnic Minority suppliers.  “Although the current government has declared an aspirational target of purchasing 25% of its requirements from local businesses or ethnic businesses, there is no measurement so we don’t know if those targets are being met.” Mr Shah adds.

It is a point echoed by private sector business leaders. 

Paul King, Global Supplier Diversity Program Manager for IBM, said: “Minority Owned businesses tend to be more responsive to the needs of IBM and help IBM achieve our key strategic diversity objectives by delivering innovation and quality goods and services.”

Ethnic minorities now make up just over 12% of the British population, a figure that is set to double by 2050. 

Minority-owned businesses make up just over 10% of all SME’s and that figure is said to be rising at a much faster rate, despite the general economic downturn; a result of these businesses willing to innovate and provide services that are ‘value-for-money’, the basis by which all current public contracts are assessed.   

A 2011 report by the Department of Business, Innovation and Skills (BIS), ethnic minority-owned businesses have demonstrated greater resilience against the economic downturn and are also more likely to have hired additional staff in the last 12 months than the general population of SMEs. 

Ethnic minority business owners also demonstrate more positive attitudes towards entrepreneurship and innovation, and are more likely to act as mentors to other entrepreneurs in the community.



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