Is more data needed to support Europe’s ‘minority’ businesses?

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 real terror created by a disease that stubbornly refused to respond to existing antiviral treatments .

Hope was restored with the arrival of the first vaccine, brought to market by Pfizer in collaboration with a relatively little-known German company known as BioNTech.

As we now know, BioNTech – currently worth around €41 billion – was and is a vaccine research company founded by a husband and wife team of Turkish origin. From one perspective, it was a “minority” European enterprise that managed to change the world.

And as a new report points out, minority-owned businesses are making 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 another nine in the UK.

The exhibit doesn’t just focus on unicorns. From restaurants and shops (the traditional if somewhat stereotypical starting points for first-generation immigrants) to high-tech businesses such as the aforementioned BioNTech or Oxford Nanopore, the study highlights how businesses owned and founded by people of “minority” origins they are not only part of the fabric of Europe’s commercial life they are also increasingly important economically in terms of their contribution to job creation and GDP.

And yet, the report argues, relatively little is known about them. Philippe Legrain is the founder of OPEN and, as he explains, European governments do not tend to collect information on the national 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 type of information is not readily available elsewhere on the continent. Consequently, in order to complete this research, OPEN had to develop an artificial intelligence algorithm to identify minority owners.

Specific Challenges

So why does this matter? Well, OPEN argues that minority businesses face some very specific challenges. And without information about 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—not being part of the networks that other business owners can use—and doubt,” says Legrain.

There is, he admits, the other side of the coin. “Entrepreneurs from minority backgrounds 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 lingering discrimination. But what does this look like?

“There is a role for politics when it comes to public procurement,” he says. “Often minority businesses cannot access public procurement because the processes are opaque.”

As for the private sector, Legrain says progress has been made, largely because large companies are realizing the benefits of sourcing from different sources as they seek to make their supply chains more resilient.

But this brings us back to the problem of transparency of information about the true ownership of businesses. OPEN recommends that all European countries maintain a register of beneficial owners that includes details of nationality. In addition, governments should collect data on the nationality of residents.

Now we have to say that not everyone would agree. There are some very real philosophical issues here. Countries may take the view that all citizens are just citizens and therefore a focus on ethnicity is not required. Indeed, it would not be desirable to do so. A similar argument could be made about recording the ethnicity of owners or directors.

From its perspective as a think tank dedicated to promoting trade and social openness, OPEN considers that information is needed to combat discrimination. And as Legrain argues, given data, the EU’s race equality directive is hard to enforce.

There is definitely a discussion to be had. Meanwhile, the contribution of businesses founded and grown by immigrants is worth celebrating.

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