Cast your mind back to the darkest days of 2020. Covid-19 was sweeping the world, economies were on lockdown and – perhaps most importantly – there was genuine terror generated by a disease that stubbornly refused to respond to existing antiviral treatments.
Hope was restored with the arrival of the first vaccine, marketed by Pfizer in partnership with a relatively little-known German company known as BioNTech.
As we already know, BioNTech – currently valued at around €41 billion – was and is a vaccine research venture co-founded by a Turkish husband and wife team. From one perspective, it was a “minority-owned” European business that managed to change the world.
And as a new report points out, minority-owned businesses make a significant contribution to the innovation economy in both the UK and continental Europe. According to 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 (the traditional, if somewhat stereotypical starting points for first-generation migrants) to high-tech ventures such as the aforementioned BioNTech or Oxford Nanopore, the study highlights how businesses owned and founded by people from ‘minority’ backgrounds are not only a part of the fabric of Europe’s commercial life, they are also increasingly important from an economic point of view in terms of their contribution to job creation and GDP.
Yet, the report states, relatively little is known about them. Philippe Legrain is the founder of OPEN, and as he explains, European governments are reluctant to collect information on the ethnic background of business owners. “The UK has a full register that provides beneficial ownership 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 kind of information is not readily available elsewhere on the continent. Therefore, in order to complete this research, OPEN had to use an AI algorithm to identify minority owners.
So why does this matter? Well, OPEN argues that minority businesses face some very specific challenges. And without knowing who the owners are, very little can be done to help them overcome any obstacles that stand in their way.
“Challenges that minority-owned businesses face include discrimination, disconnection—they’re not part of the networks that other business owners can tap into—and doubt,” Legrain says.
There is, he admits, another side of the coin. “Minority entrepreneurs often have a drive to succeed and a determination to bounce back. They also benefit from being connected to their own networks. However, many are overwhelmed by the problems they face,” he adds.
Legrain argues that there is a need to provide support and help such businesses overcome ongoing discrimination. But what does that look like?
“There is a role for policy in procurement,” he says. “Often, minority businesses cannot access public procurement because the processes are opaque.”
On the private sector side, Legrain says progress is being made, not least because large corporations are realizing the benefits of cross-sourcing as they seek to make their supply chains more sustainable.
But this brings us back to the problem of having transparent information about the actual owners of the business. OPEN recommends that all European countries maintain a register of beneficial owners that includes details of ethnicity. In addition, governments must collect data on the ethnicity of residents.
Now it has to be said that not everyone would agree. There are some very real philosophical questions here. Parties may assume that all citizens are simply citizens and therefore there is no requirement to focus on ethnicity. It would indeed be undesirable to do so. A similar argument can be made about recording the ethnicity of owners or directors.
From its perspective as a think tank dedicated to promoting commercial and social openness, OPEN takes the view that information is necessary to combat discrimination. And as Legrain argues, it’s hard to enforce the EU’s Race Equality Directive with data.
There is certainly a debate to be had. In the meantime, it is worth celebrating the contribution of businesses founded and developed by migrants.