Britain's immigration policy was the focus of much media attention around election time, with Michael Howard calling for caps on numbers coming into the country. The message was often negative, yet in terms of business success, the contribution of the UK's immigrant population has been extremely positive.
Almost unnoticed amid April's electioneering, the Institute for Public Policy Research published a report revealing that immigrants to the UK, that is, those born outside the UK but who are resident here, contribute relatively more to the economy than those born in the UK.
Although the total immigrant workforce makes up only 8.7 per cent of the population, it contributes 10.2 per cent of all income tax collected and the proportion is likely to grow. Total revenue from immigrants grew from pounds 33.8bn in 1999-2000 to pounds 41.2bn in 2003-04. This 22 per cent rise compares to a 6 per cent increase in revenue from those born in the UK.
Similarly in May, research by Barclays shows that the number of black and minority ethnic (BME) business start-ups has reached record levels. They have increased by around 33 per cent in four years, from 32,000 in 2000 to 50,000 in 2004. BME start-ups now account for 11 per cent of all start-ups.
Talking about almost anything in terms of ethnic origin alone is always simplistic, but the growing success of ethnic minority entrepreneurs is no accident. While their numbers are still relatively small, the success of BME enterprises is indicative of the way that many BME entrepreneurs have turned their situation to their advantage.
Success for any entrepreneur is not easy, and BME entrepreneurs can find it even harder than usual to access funding from a market dominated by mainstream lenders who may have little or no presence in their community and little understanding of their intended market.
It's a problem recognised by the Government. Last year Stephen Timms, then minister of state for energy, e-commerce and postal services, said, 'Often the people with the money don't know what entrepreneurs know. Entrepreneurs know their own communities inside out.'
According to research from the London Business School (LBS), what typifies BME entrepreneurs is that rather than be discouraged by the lack of mainstream funding options, they often turn to their communities for financial support, particularly from family and friends.
LBS's Global Entrepreneurship Monitor found that for many ethnic groups in the UK, the main source of start-up finance was friends and family. In the Pakistani community, it accounted for 93 per cent of financing, whereas for white British entrepreneurs a bank overdraft was the most common funding source, at just under 30 per cent.
'Finance is a classic example of how the extended family can help. It's not unusual for family members to chip in with funding for a new venture, or to help in other finance-related areas, such as finding premises,' says Mohammed Ali, chief executive of QED UK, a charity which supports the economic development of disadvantaged South Asian groups.
Professor Monder Ram, director of the Centre for Research into Ethnic Minority Enterprise (CREME) at De Montfort University in Leicester, also believes that the strength of family and community networks can have an indirect benefit if businesses do try and obtain financial support from banks and other external sources.
'It's likely that they will not be seen by bank managers as an isolated entrepreneur, but as someone with a stock of commercial experience in their family that they can draw on,' he says.
BME communities often have a higher percentage of self- employment and enterprise. It means there is a larger pool of first- hand expertise on tap for entrepreneurs to turn to, over and above anything available from local initiatives, such as Business …