Thursday 12 May 2022
London Chamber of Commerce and Industry (LCCI) has today published a paper entitled, ‘Ethnic Diversity in Business: Removing barriers impeding business success’, on ethnic diversity in business and what is needed to remove the barriers impeding minority-led business success. The report looks at the correlation between demographics of individuals from ethnic minority backgrounds and subsequent success in business and highlights the problems that ethnic minorities face accessing finance and procurement opportunities.
From the report, it is clear that education and training as well as employment issues seem to influence ethnic diversity in business. Another of the key problems uncovered in the report is that minority led businesses reported difficulties accessing funding and a disproportionately low percentage of Venture Capital funding has been found to go to ethnic minority led businesses. The report also highlighted an aversion to applying for funding by ethnic minority led businesses, and those that did apply were found to be less likely to receive it.
The London Chamber of Commerce and Industry recognises London’s complex history and relationship with a rich tapestry of ethnic minorities and has published this paper to highlight the relationship between the city and the outcomes of ethnic diversity in business.
However, what become evident while producing this paper is that we still know little about ethnic minority led businesses and the sectors in which they operate due to the lack of robust data gathering and research. What data we have is inadequate and often not granular enough to reflect the diverse ethnic makeup of ethnic groups and their respective experiences. This in turn has a detrimental effect on how these businesses are perceived in wider conversations about business development and growth.
This paper highlights the need for more robust data gathering and research on ethnic minority led businesses and points to the need for strategic engagement between, and concerted efforts from, the government, the business community and people from ethnic minority backgrounds.
The recommendations outlined in the report include:
- Better data collection is needed to improve understanding of the ethnic minority led business landscape and to identify and address the differences between ethnic sub-groups.
- Banks and financial institutions should review their lending practices and eliminate requirements that place unnecessary hurdles in the path of ethnic minority owned businesses.
- Steps should be taken across the public and private sectors to address negative perceptions amongst ethnic business communities about taking on debt and improving trust in the availability of financial support through targeted campaigns.
- A dedicated Government taskforce should be convened to establish effective measures to boost the inclusion of ethnic minority-led businesses in public procurement.
The full report is available to read here.