Ethnic Minority Businesses Research Articles

Ethnic networks and small firm internationalisation: a study of UK-based Indian enterprises

This paper draws upon on a sample of 21 UK-based Indian small- and medium-sized enterprises to explore the impact of ethnic networks on the internationalisation of minority ethnic businesses. Issues examined include the perceived importance of such networks in the study firms' international expansion and how this perception might have been affected by the firms' overall level of development. It emerged that these network resources provided useful intelligence and contacts that bridged critical gaps in the study firms' international knowledge and experience, and facilitated their selection of international partners, particularly at the early internationalisation stages. The managerial, policy and future research implications of the findings are discussed.

Experimenting with Supply Chain Learning (SCL): Supplier Diversity and Ethnic Minority Businesses

This paper reports on an innovative UK-based ‘Supply Chain Learning’ (SCL) initiative to encourage the corporate sector to consider supplier diversity in respect of ethnic minority businesses. This follows academic and policy interest in programmes to empower ethnic minority enterprises to achieve breakout to mainstream markets and business growth. The first phase of the initiative, entitled Supplier Development East Midlands (SDEM) is examined. By adopting an inter-organisational action learning approach, some of the key attributes of the programme are delineated, focusing on the recurrent action-reflection cycle taking place in a learning group comprising SDEM, LPOs (Large Purchasing Organisations) and small EMSs (Ethnic Minority Suppliers).

A new US definition of ‘Minority Business’: lessons from the first four years

The purpose of this paper is to discuss current definitional issues regarding minority business in the USA and the policy-oriented implications of these issues with regard to European ethnic minority enterprise. After an introductory discussion of the concept of ‘minority business’ and related terminology, this paper then examines a major change in the definition of such businesses made by the National Minority Supplier Development Council (NMSDC), the principal link between large US corporations and the minority business community. In line with US government minority assistance programme requirements, a ‘minority business’ previously had to be at least 51% minority-owned. Under the new NMSDC policy, a firm can have as little as 30% minority ownership and still be eligible for corporate minority-targeted contracts. This paper explains this re-definition and discusses the experiences of the first four years of this new policy and the lessons and implications for the USA. The discussion is then extended to the European context – the rise of immigration and the related increase in ethnic minority business enterprises, the current nature of public policy toward such enterprises in terms of programmes and legislation, and the implications of the US experience for Europe. Finally, future issues with regard to European ethnic minority enterprise are raised, along with areas for future research focus.

Diversification in ethnic minority business

Purpose – To provide an initial assessment of the nature and extent of the involvement of Asian‐owned firms in the creative industries in London; to identify and assess any barriers they face; and draw out the implications for policy.

A case history of a ‘successful’ Asian entrepreneur in the UK: Moni Varma of Veetee Rice Ltd

A need exists to profile ‘successful’ members of ethnic minority communities to act as learning vehicles for prospective entrepreneurs from the respective communities. Arguably, existing literature concerning ethnic minority businesses has become somewhat dated given the integration of communities in the UK over time. Some entrepreneurs from ethnic minority communities have combined best practices from their own culture with that of the UK to form an ‘Anglo-Asian way’ of undertaking business in contributing to their success. Successful entrepreneurs seem to be able to manage serendipitous events in exploiting opportunities and do not rely exclusively on strategic management practices that feature in business school teaching. Copyright © 2005 John Wiley & Sons, Ltd.

Impact of Ethnicity on Management and Channel Building in Minority Enterprises

As the number of ethnic minority enterprises continues to grow dramatically in the U.S., these enterprises have become a significant priority for both public policy makers and businesses who wish to target minority markets. Doing business with minority firms and customers is no longer the right thing to do but a business necessity. Given the lack of literature in this area, the present study aims to improve our understanding of selected issues in management of minority firms. It focuses on the marketing decision making and supervisory behaviors of ethnic minority business managers and derives implications for channel building. Specifically, the study examines the impact of ethnic affiliation on personal values, supplier selection and supervisory behaviors of managers from the two largest ethnic groups in the U.S., Hispanics and African-Americans. Using the dominant Anglo-American culture as a benchmark for comparison, the results indicate a significant effect of ethnicity on the dependent variables. The results yield a number of future research avenues and implications for building efficient distribution networks with and for minority businesses.

Addressing the Business Support Needs of Ethnic Minority Firms in the United Kingdom

The authors examine the provision of enterprise support to ethnic minority businesses (EMBs) in five cities in the United Kingdom. The central focus is on the nature of support provision, including relationship with the commercial banks. It is well established that EMBs are underrepresented as clients of mainstream providers of enterprise support, such as Business Links in England, or Local Enterprise Companies in Scotland, and that participation and practice, even with specialist ethnic agencies, is highly variable. The authors discuss evidence from research undertaken through a programme of thirty-three face-to-face interviews with respondents from a cross-section of support agencies in five city locations in which EMBs are concentrated, namely, London, Leicester, Birmingham, Glasgow, and Edinburgh. They discuss evidence from the face-to-face interviews in the light of previous research findings, developing implications for future support policy for EMBs. They highlight good practice, identify gaps in provision, and suggest policies which can improve the access of EMBs to support and finance.

Supplier diversity initiatives and the diversification of ethnic minority businesses in the UK

This paper examines the role that supplier diversity initiatives can play in opening up market opportunities for ethnic minority businesses (EMBs). EMBs have long been encouraged to diversify from inauspicious ‘low value’ niches; for some, the prospect of contracts with public and private sector organisations could serve as a means of facilitating this process. The advent of the Race Relations Amendment Act provides a legislative stimulus for diversity in public sector procurement. The ‘corporate social responsibility’ agenda, ostensibly embraced by many leading firms, provides a further impetus to re-assess diversity issues in respect of procurement. Case studies of two types of supplier diversity initiatives are drawn upon to inform this assessment: purchaser initiatives, from both the public and private sector; and intermediary or business-to-business brokerage type initiatives that attempt to facilitate the access of EMBs to potential contract opportunities. It is clear that such initiatives are at an early stage of development, and have to operate within legislative and political constraints. Nonetheless, there is still scope for the development of progressive measures; this is explored in the conclusion.

Exploring the characteristics, attitudes to targeting and relationship marketing of small ethnic minority businesses

This paper presents a discussion of the literature and research about small ethnic minority businesses (SEMBs). Their business practices and characteristics, family and community ties and attitudes concerning measuring, targeting and relationship marketing are explored. Conclusions are drawn about ethnic businesses and recommendations for further study are given.

Access to Finance by Ethnic Minority Businesses in the UK

This article presents findings from a large-scale study of access to finance and business support by ethnic minority businesses (EMBs) in the UK. The results show more variation between ethnic minority groups than between EMBs (as a group) and white-owned firms; with African/Caribbean owned businesses (ACBs) appearing the most disadvantaged. Analysis shows them to have been less successful in accessing bank loans than either white or other ethnic minority groups and to have a higher propensity to turn to non-bank formal sources of start-up finance (including various sources of `last resort' lending). Although some of these difficulties are associated with certain types of business activity in which ACBs are concentrated, sector is not a determining influence. The results suggest that ACBs, and/or sectors in which ACBs are concentrated, would appear to justify a targeting priority in any new finance initiatives that are taken.

Banking on 'break-out': Finance and the development of ethnic minority businesses

Reflecting recent changes in the pattern of ethnic minority business activity in Britain, this paper examines the experiences of firms attempting to break out from the cramped range of generally marginal activities historically occupied by South Asian, African-Caribbean and other immigrant-origin entrepreneurs. Based on in-depth case histories supplemented by a large-scale quantitative survey, the present paper addresses the financial experiences of these firms in the light of the assumption that break-out entails a shift from labour-intensive to capital-intensive activities requiring external financing. Access to bank credit continues to be problematic, with frequent perceptions of racist discrimination even in the case of entrepreneurs with seemingly impressive track records and personal resource endowments.

Policies to support ethnic minority enterprise: the English experience

Continued political enthusiasm for encouraging entrepreneurship in the UK is beginning to influence business support policy towards black and minority ethnic businesses (BMEBs). The Small Business Service (SBS; the government agency charged with providing business support to small firms in England) has an explicit remit to cater for entrepreneurs from all sections of society. This is an important development given the widely noted reluctance of BMEBs to avail themselves of the services of mainstream business support agencies. This paper aims to assess the extent to which policy aspirations in relation to BMEBs have been realized. A survey of Business Links (the agencies contracted to deliver SBS services in England) and interviews with key informants are drawn upon to address three questions: To what extent do Business Links have a policy to support BMEBs? What form are initiatives to support BMEBs taking? How can these experiences inform a policy agenda towards BMEBs? The findings suggest that uneven and under-developed approaches to the support of BMEBS are commonplace. However, some encouraging examples of potentially fruitful initiatives are in evidence, which may reflect a growing awareness of the particular needs of BMEBs. A number of guidelines for future policy are presented, including the importance of diversity within mainstream provision; the need for an engagement strategy; improved access to finance; the promotion of sectoral diversity; and better evaluation.

Microbusiness, Household and Class Dynamics: The Embedding of Minority Ethnic Petty Commerce

Microbusinesses are embedded in wider social processes, and it is the nature of this social embeddedness that is the principal focus of the article. In particular, ‘domestic embedding’ of petty commerce is crucial, and involves a mixture of competition, domination, negotiation, and custom (Wheelock and Mariussen, 1997). Furthermore, as a socio-economic group, petty traders and producers occupy an ambivalent position in the class structure, as they are vulnerable both to upward and downward social mobility. While the petty capital class has the advantage of possessing property assets, many members lack significant symbolic and cultural assets. Nonetheless, property assets offer the most robust bases for class formation (Savage et al., 1992). In addition, the embedding of petty commerce can be both ‘identity-sensitive’ and ‘identity-neutral’ (Sayer, 1995; 2000; Fraser, 1995). Extra-ethnic factors are significant in this process. The research uses formal interviews and ‘quasi-ethnographic’ methodology to explore the different contexts in which restaurateurs and market traders operated in Birmingham, UK. The article draws critically on several literatures on industrial organisation, economic sociology, family businesses and minority ethnic businesses. One aim is to give the rather indifferent concept of ‘embedding’ substantive content, and in this way to make an empirically informed contribution to ‘new economic sociology’.

Ethnic Minority Business Policy in the Era of the Small Business Service

The advent of the Small Business Service (SBS) has been accompanied by a renewed interest in ethnic minority enterprise. The content, nature, and efficacy of engagement processes with ethnic minority business (EMB) are likely to be important criteria for the granting of local SBS franchises, if the support needs of EMBs are to be successfully identified and responded to in the light of community and socioeconomic differences. This imperative has thrown into sharp relief unarticulated assumptions upon which policy towards EMBs has been, or should be, constituted. A review of these policy questions, and an assessment of the way forward, is long overdue. This is the key aim of the paper. In addressing this task, the authors draw upon a range of recent and ongoing studies of different facets of EMB activity, focusing in particular on the policy dimension. The discussion is divided into three main sections. First, there is an assessment of the support needs of EMBs. A key question is the extent to which such businesses are distinct from the general small firm population; and whether differences can be attributed to other factors, such as size and sector. This issue has implications for the delivery of business services; in particular, should services be delivered within existing ‘mainstream’ business support institutions, or through agencies predicated upon notions of ethnic differentiation? Second, issues and lessons from previous policy initiatives are considered. In particular, the role of specialist agencies, urban regeneration initiatives, and business-led organisations are assessed. After considering issues emerging from extant studies, part three identifies elements for a more coherent policy towards EMBs. Such a policy should include: clearer objectives; placing support EMBs within mainstream provision; an engagement strategy; closer integration between business support and regeneration policies; better access to finance; and more client-focused business support.

Immigrant and Minority Businesses: Making the Policy Case

The government plays an important role in the socio-inclusion of immigrants and ethnic minorities in its capacity as employer and purchaser of services. The government's functioning as "a business," in particular as a buyer of goods and services that includes immigrants and minorities in Europe, is examined. Several factors are significant in the growing importance of ethnic minority and immigrant entrepreneurship in Europe: (1) as an alternative to wage labor, unemployment, and public assistance; (2) as a source of benefit for national economies; (3) as a pathway to socio-economic integration. Immigrant and ethnic minority business is gaining recognition among several European governments (Germany, the Netherlands, Sweden, and the United Kingdom). Public procurements and the Government Procurement Agreement (GPA) of 1994 are reviewed, along with European Union legislation, and debates on a social approach to public procurement. In most countries, government at all levels is the largest consumer in the market; the current trend in government is to contract out an increasing proportion of its spending. In the European Union, public procurement contracts account for 14% of the GDP, i.e., over 1,000 billion Euros per year. Proactive procurement policies are profitable and advantageous from both a business and a social policy viewpoint.(CBS)

Making the link: Households and small business activity in a multi-ethnic context

The 'family' is frequently mentioned in assessments of the apparent distinctiveness of ethnic minority enterprise. Family involvement can account for the 'success' of some ethnic groups, and low rates of small business activity in others. Implicitly, such debates are recognition of the importance of the nature of the household and small business. However, few studies in Britain make explicit the link between household dynamics and ethnic minority business activity. This paper examines how households from a variety of ethnic communities impinge upon 'family' enterprise operating in the independent restaurant sector. In-depth interviews with family members from 37 micro-business households are drawn upon to illuminate three particular issues: the role of family members in the business; the impact of household dynamics on business activity; and the nature of 'second-generation' involvement in the family business. The findings highlight the gendered nature of roles within the micro-business household, and the importance of extended family ties to small business activity. However, the involvement of predominantly second-generation family members could not be regarded as an example of uncomplicated family collectivities at work. Rather, their presence was more a product of limited labour market choices, socialisation, and power relations within the household. La participation ded la familia en la empresa puede explicard 'exito' de algunos grupas etnicas, y a vez el numero reducido de las PYMES entre algunos otros drupos. Implicitamente tales debates manifestan la importancia de la naturaleza de la familia y la pequena empresa. Sin embargo, pocos estudios iievados a cabo en Gran Bretana senalan explicitamente la conexion entre la dinamica dentro de la familia y la activdad de las pequenas empresas de las minorias etnicas. Este papel examina como las caracteristicas de la vida domestica de diversas comunidades etnicas afectan la empreesa 'familiar' en al sector de los restaurantes indepenientes. Se refiere a una serie de entreuistas cualitativas con los miembros de 37 familias involucradas en micro-negocios y sirve para iluminar tres temas especificos: el rol desampenado por los miembros de la familia en la empresa; el impacto de la dinamica familiar del compromiso de la segunda generacion en la empresa de su familia. Los resultados de estas investigaciones destacan los lazos que existen entre las caracteristicas de las tareas dentro de las empresas y el sexo de los individuos que las iievan a cabo. Tambien demuenstran la importancia de los extendidos lazos familiares para las activadades empresariales. Sin embargo la presencia de tantos individuos pertenecientes a la 'segunda generacion' no puede considerarsed simplemente ejemplos de unas comlectiuidades familiares tvabajaundo juntes. En efecto, la presencia de estos inividuos es mas bien producto de la falta de oportunidudes en el mercado del trabajo, la socialiacion, el poder y las relagiones dentro de la familia.

Studying economic institutions, placing cultural politics: methodological musings from a study of ethnic minority enterprise

In most studies, the politics of race is presented as bi-polar, privileging the relationship between a dominant White majority and non-White minority groups. In this paper we outline some of the methodological problems that we faced in our research in Leicester, a city where 71% of the population identified themselves as White, 23% Indian, 1% Pakistani and 1.5% Black Caribbean at the last Census. Our research aimed to study ethnic minority businesses in Leicester, but from the beginning we were faced with Leicester's Asian business success stories and we soon became conscious of the invisibility of African–Caribbean businesses and the problems that they faced as a minority within a minority in the city. This paper focuses on the ways in which the ethnic mix of Leicester as a place influenced our study, and the methodological problems that ensued from conducting a study on economic processes where the meanings of the key terms `ethnicity', `enterprise' and `entrepreneurship' serve to obscure the business stories of some to privilege others. The paper thus argues for a shift in our focus of interest from issues of research method towards the more holistic term `research practice'.

`Apprentice Entrepreneurs'? Ethnic Minority Workers in the Independent Restaurant Sector

Ethnic minority business activity has often been presented as a vehicle for `upward mobility' for owners and workers alike. Much attention has focused upon the owners themselves. The co-ethnic labour that such employers usually rely upon has often been treated as unproblematic. This paper aims to illuminate the experiences of workers in ethnic minority owned restaurants. In particular, the widely held view that working in a co-ethnic firm serves as an `apprenticeship' for eventual self-employment is explored. Rather than co-ethnic ties, workers' labour market experiences highlight the importance of the `opportunity structure' in shaping employment choices. The evidence of the current research suggests that the goal of self-employment was not widely held; and although many workers did move around to acquire better paid work, this was not part of a strategic route to becoming a restaurateur. Some workers did cherish such ambitions, but were inhibited by major obstacles. These included intense competition, high start-up costs, and a lack of `know-how'. The labour market and social context of the firm often militated against the hazardous proposition of self-employment.

Socio-economic and policy dimensions of the mixed embeddedness of ethnic minority business in Britain

Ethnic minority businesses in Britain are examined in relation to the concept of mixed embeddedness. Earlier intellectual approaches emphasising cultural factors, urban and economic contexts, and public policy are identified. Ethnic minority businesses are shown to be typically small, to compete in saturated spatial markets and to be concentrated in economically vulnerable sectors. Moreover their fragile position has been further destabilised by the effects of government policy. Special attention is given to the repeal of the Shops Act, which limited the opening hours of shops. We conclude that an unintended outcome was the entry of large-scale chains into the formerly protected niches of South Asian-owned businesses. This represents a catastrophic occurrence for some ethnic minority firms. Meanwhile, public policy related to enterprise support and the regeneration of the urban fabric has been largely ineffective in the arena of ethnic minority business. The whole picture is complicated by generational differences in minority communities and by continuing restrictions on immigration.

Socio-economic and policy dimensions of the mixed embeddedness of ethnic minority business in Britain

Socio-economic and policy dimensions of the mixed embeddedness of ethnic minority business in Britain