Diversity and SMEs : Existing Evidence and Policy Tensions : ERC White Paper No.3

The purpose of this White Paper is to present an overarching review of the evidence that currently exists with regard to diversity and SMEs. It outlines longstanding concerns that entrepreneurial activities and ambitions are restricted to a narrow range of social groups, with others, in particular some ethnic minority groups and women, characterised as having both lesser interest in enterprise and lower levels of resources necessary to participate. Attempts to increase participation rates of under-represented groups have resulted in only modest changes. This White Paper introduces the key evidence relating to ethnic minority and women-led enterprises, explaining the context of each group, and summarising research evidence relating to their relative access to finance, markets and management. Research and policy within the field of diversity and SMEs is characterised by a number of tensions, relating to perceived or real discrimination; whether to promote a volume of new businesses or focus on high growth potential firms; whether specialist business support is more effective or desirable than mainstream provision; and whether there is evidence of market failure in the support provided to diverse enterprises

Diversity, economic development and new migrant entrepreneurs

How do migrant entrepreneurs contribute to economic development? The growing attention to the contribution that migrants make tends to be skewed towards their economic role. Drawing on interviews with 49 new migrant business owners and 60 workers in the West Midlands, UK, we argue that benefits of diversity should be explored beyond the economic dividend. We engage with key theoretical developments in the fields of migrant entrepreneurship and diversity economics, and show that migrant entrepreneurs are characterised by the polarisation of their performance between high fliers and survival entrepreneurs. Despite their overall resource poverty, migrant entrepreneurs on the lower level create employment for their locality, cater to community needs and cushion the social incorporation of new communities in British society. We argue that debates around the benefits of diversity should incorporate not only economic growth, but also its impact on social processes

Barriers to Ethnic Minority and Women’s Enterprise:Existing Evidence, Policy Tensions and Unsettled Questions

This article presents an overarching review of the evidence regarding enterprise diversity. It discusses the context of ethnic minorities and women in enterprise and summarises research evidence relating to their relative access to finance, market selection and management skills. Policy within the field of diversity and enterprise is characterised by a number of tensions and unresolved questions including the presence of perceived or actual discrimination, the quantity and quality of ethnic minority and women-led businesses, potential market failure in the support provided to diverse enterprises and the substantive uniqueness of ethnic minority and women-led enterprises. Particular implications for policy and practice as well as directions for future research are discussed

The Roots of Informal Responses to Regulatory Change: Non‐compliant Small Firms and the National Living Wage

How do small ‘non‐compliant’ firms (those evading existing regulations) react to further regulatory change? The impact of the National Living Wage in the UK in 2016 is analysed through 22 mostly longitudinal case studies of small non‐compliant firms. The varied responses, endurance of non‐compliance, and blurred and dynamic nature of transitions to compliance are discussed through the lens of institutional approaches to informality. The analysis sheds new light on the relative autonomy of micro processes and the conditions under which external forces affect these processes. Non‐compliant informality, as a persisting feature of small business, is unlikely to be transformed by legal regulation alone

Bricolage as Survival, Growth and Transformation:the Role of Patchworking in the Social Agency of Migrant Entrepreneurs

This article examines the patch-working strategies of migrant entrepreneurs as a form of social agency. ‘Patch-working’ – the reliance on supplementary forms of income to support business activity – is often seen as a means of cushioning the financial vulnerability of small firms. However, the mechanisms and forms that patch-working takes tend to be overlooked. Evidence from 42 West Midlands’ firms shows that, despite the highly constrained operating environment, the exercise of social agency can help to cushion against disadvantage and to rework their current conditions through patch-working. This allows for business growth, and even transformational growth in some cases, rather than sheer survival. Even so, our findings show that the agency of migrant entrepreneurs brings about only minor improvements in revenue and is certainly not capable of fundamentally changing either the nature of the sector or the structure of the labour market in which they are embedded

Thwarted or Facilitated? The Entrepreneurial Aspirations and Capabilities of New Migrants in the UK

This article draws on biographical interviews with migrants to assess their aspirations and capabilities to become entrepreneurs. By augmenting mixed embeddedness emphasis on contextual factors with Sen’s capabilities framework, we contribute to extant sociological debates on the interaction of structure and agency, the conceptualisation of aspirations, the non-pecuniary aspects of entrepreneurship and the role of institutions in neoliberal Britain. We argue that structural barriers drive the formation of aspirations to become entrepreneurs while at the same time limit their capabilities to do so. Entrepreneurial agency must be seen as relative autonomy, effective in strategic decision making but limited to the weak financial position in which migrant entrepreneurs operate

Towards a more inclusive human resource community:Engaging ethnic minority microbusinesses in human resource development programmes targeted at more productive methods of operating

The economic and social importance of ethnic minority microbusinesses (‘EMMBs’ with 1–9 employees) is neglected in human resource (HR) academic and policy discourse on productive ways of working. This article presents an action research approach to show how academics and intermediaries (local trusted industry representatives) can collaborate to promote HR development programmes targeted at more productive methods of operating in EMMBs. Our research collaboration involves academics, EMMBs (from the catering and creative sectors) and intermediaries. We develop perspectives on HR in small firms by showing how EMMBs can be engaged in initiatives of learning and development targeted at organisational change. The study contributes to recent calls for a more inclusive approach to HR theorising and practice

What happens to refugee-origin entrepreneurs? Combining mixed embeddedness and strategy perspectives in a longitudinal study

Whilst it is acknowledged that refugees are more likely to select into self-employment due to discrimination and labour market exclusion, we know little about how their ventures perform over time. To address this gap, we draw upon qualitative longitudinal evidence gathered in 2010 and 2018 in the UK to explore the outcomes of their ventures and what strategies they have put in place. We argue that the trajectories of refugee-owned businesses are explained by their structural position and the strategies, resources, and business support networks, highlighting that refugee entrepreneurs re-work their condition in a manner that is much more proactive and resilient than suggested by extant portrayals of refugee entrepreneurship. Our analysis sheds new light on the dynamics of refugee business development and encourages a more nuanced theoretical approach to evaluate these enterprises as vehicles for integration against the backdrop of neoliberal Britain