Philippe Legrain said more information is needed about minority businesses.
Cast your mind back to the darkest days of 2020. Covid-19 was sweeping the world, economies were shutting down and – perhaps most importantly – there was a real panic caused by a disease that refused to respond to existing antiviral treatments.
Hope has returned with the arrival of Pfizer’s first vaccine to market in partnership with a relatively unknown German company called BioEntech.
As we know it now, BioEntec – currently valued at 41 billion euros – was a vaccine research venture founded by a couple of Turkish origin. From one point of view, it was the “minority ownership” of European business that succeeded in changing the world.
And according to a new report, minority-owned businesses in the UK and mainland Europe are making a significant contribution to the innovation economy. As Minority Businesses Matter: Europe Published by the Open Political Economy Network (OPEN) There are currently six minority-owned tech unicorns in Europe and a further nine in the UK.
The report doesn’t just focus on unicorns. From restaurants and shops (if the first-generation immigrant tradition is somewhat skewed) to high-tech ventures, such as the aforementioned BioEnTech or Oxford Nanopore, the study shows how people from “minority” are not owned and established businesses. Only one part of European business life is growing in economic importance in terms of their contribution to job creation and GDP.
However, the points of the report are disputed, relatively little is known about them. Philippe Legrand is the founder of OPEN and he explains that European governments do not tend to collect data on the ethnic origin of business owners. “The UK has a comprehensive register of useful patents and you can look at that register and find out who is from a minority community,” he says.
However, with the exception of Denmark, this type of information is not easily available elsewhere on the continent. Consequently, in order to complete this survey, OPEN had to deploy an AI algorithm to identify minority shareholders.
Special challenges
So why is this important? Well, OPEN argues that minority businesses face some very different problems. And without information about who the owners are, there is very little to help them overcome any obstacles they encounter on their way.
“Challenges that minority-owned businesses face include discrimination, disconnection—not being part of networks that other business owners can tap into—and suspicion,” says Legrain.
He realizes that there is another side to the coin. “Entrepreneurs from minority backgrounds often have the determination to succeed and give back. They benefit from being connected to their own networks. However, many are overwhelmed by the challenges they face,” he added.
Legrain argued for the need to provide support and help such businesses overcome persistent discrimination. But what does that look like?
“There is a role for policy in terms of public procurement,” he says. “Often, minority businesses cannot obtain public contracts because the procedures are unclear.”
From a private sector perspective, Legrain says, it’s not just that large corporations are realizing the benefits of multisourcing as they seek to make their supply chains more resilient.
But that brings us back to the problem of getting clear information about the beneficial ownership of businesses. OPEN recommends that all European countries maintain an important ownership register that includes ethnic details. In addition, governments should collect information on the nationality of residents.
Now it must be said that not everyone agrees. There are some very real philosophical issues here. Countries can simply assume that all citizens are citizens, so there is no requirement to focus on nationality. Of course, it would be undesirable to do so. A similar argument can be made about documenting the lineage of owners or directors.
OPEN recognizes the need for information to fight discrimination from the perspective of a caring institution for business and social transparency. And as Legrain points out, with data, the EU racial equality directive is difficult to implement.
There is certainly an argument to be made. In the meantime, it’s worth celebrating the contributions of businesses founded and grown by immigrants.
