One in Five UK Companies Started by Ethnic Minorities

Almost a fifth of new business directors in the UK in the past three years have come from an ethnic minority group, research by the Made Simple Group has found.

The online business service provider’s survey of 110,000 company formations since January 2009 found that people describing themselves as Indian made up the largest single ethnic group (3,335 directors) of directors of new businesses.

They were followed by Pakistani (1,858), Chinese (1,750) and Nigerian (1,617). However, Chinese directors made up the highest proportion per head of UK population, with an estimated 1 in 68 Chinese people in the UK now a business director.

Howard Graham, chief executive of the Made Simple Group, said the survey of new businesses registered with Companies House between January 2009 and September 2011 presented “a fascinating picture of the people starting business in the UK”.

The research also found that:

Chinese make up the highest number of directors of new UK companies living overseas, followed by French, Germans and Italians most new business directors are aged between 21 and 40, with the youngest being 16 and the oldest 94 during the period surveyed the number of women becoming directors of new businesses has risen very slightly from 23.79 per cent to 24.86 per cent more than half of new business directors are based in London, the East of England and the South East, with south London and Guildford being the UK’s start-up hubs

Dawn Whiteley, chief executive of the National Enterprise Network, noted that the profile of new business owners using enterprise agencies differed from that of the research. “Based on our members’ activities last year, 43 per cent of their clients were women and 25 per cent ethnic minorities,” she said.

Ellie Kerr, who runs the North-West based support network Women in Business, also said she felt the research did not offer an accurate picture of female entrepreneurship in the UK, which was changing as a result of the economic downturn and the growth of online business.

“There’s been a definite increase in women starting businesses in the last 12 months,” she said. “We’ve been finding many cases in the past two years of husbands losing their jobs and taking on childcare and women building up small businesses to keep money coming in.

“We’re also finding more women taking redundancy and using the money to follow their passion,” Kerr added. “But most of these women are below the VAT threshold and are sole traders, so they wouldn’t appear in these results.”

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