Thursday, August 12, 2010

Working with New Migrant Businesses in the West Midlands: Challenges and Opportunities


In recent years, the West Midlands has seen a wave of migration from countries such as Somalia and Poland. This is sometimes called new migration, in contrast to established patterns from countries in the Caribbean and South Asia. Many new migrants establish their own businesses, a process of great importance for their economic integration but it remains a neglected contributor to entrepreneurial activity in the region. Yet there is little research on their enterprises or experiences of business support.

Studies by De Montfort University’s Centre for Research in Ethnic Minority Entrepreneurship (CREME) and early evidence-gathering by Minority Ethnic Enterprise Centre of Expertise (MEECOE)1 as mentioned in previous blog posts on new migrant businesses in the West Midlands has revealed:

• An alarming dearth of information on the scale and nature of new migrant business activity Considerable interest in entrepreneurship as a career option amongst new migrants
• Involvement of new migrants in a diverse range of business activities
• Unacknowledged human capital within many businesses
• A lack of awareness of the existence and role of ‘mainstream’ business support agencies
• Active interest in pursuing appropriate support to develop their businesses
• A willingness to engage with business support professionals

Barriers to enterprise

Access to finance

It was suggested that new migrants struggled to secure finance from banks and other ‘mainstream’ financial intermediaries. This led to reliance on informal sources, and the running of severely under-capitalised businesses.

Cultural constraints

Language was seen as a barrier for some groups, as was a lack of familiarity with rules and regulations surrounding the business activities. Equally, it was noted that business support intermediaries rarely had an appreciation of the different cultural traditions of new migrant communities.

Trading patterns

The tendency for new migrants to trade primarily with their own communities meant that their potential customer base was extremely narrow. There was a lack of attention to the need to diversify their businesses.

Lack of information

New migrants often struggled to secure information on the process of business start-up and functions such as marketing and business planning.

Implications

A number of issues merit further consideration:

• Self-employment is reputed to be an important economic activity for new migrants in the region. Its scale and dynamics need to be understood if appropriate policy interventions are to be devised.
• ‘Mainstream’ business support agencies do not appear to be widely utilised by such groups. This is a concern since the boosting of enterprise in disadvantaged areas (where new migrants are often located) is a key objective of such agencies. Further, such agencies’ knowledge of the new migrant business activities appears limited.
• There is considerable diversity in the experiences of new migrant communities in the region; this needs to be understood and reflected in policy interventions.
• There does not appear to be a clear mechanism to articulate the experiences and needs of new migrant entrepreneurs. Ethnic minority business intermediaries should reflect upon their links with such communities.
• Consideration should be given to new and innovative ways of engaging new migrant business owners.


1 Funded by Advantage West Midlands, the Minority Ethnic Enterprise Centre of Expertise is an exciting two-year project that aims to promote a strategic and innovative approach to supporting ethnic minority businesses in the West Midlands. A consortium led by De Montfort University’s Centre for Research in Ethnic Minority Entrepreneurship (CREME), in collaboration with the University of Lancaster and CSK Strategies, will work with public and private sector stakeholders to enhance policy and practice for ethnic minority enterprise in the region.

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