directorate general for enterprise and industry 1 opportunities for ethnic minority entrepreneurs...
TRANSCRIPT
![Page 1: Directorate General for Enterprise and Industry 1 Opportunities for ethnic minority Entrepreneurs European week of Regions and Cities, Brussels 11 October](https://reader035.vdocument.in/reader035/viewer/2022081821/5515321a55034685568b486f/html5/thumbnails/1.jpg)
1
Directorate General for
Enterprise and Industry
Opportunities for ethnic minority Entrepreneurs
• European week of Regions and Cities, Brussels 11 October 2005
• Mr.Albrecht Mulfinger, • Head of Unit „Crafts, Small Enterprises, Cooperatives and Mutuals,
European Commission, DG Enterprise and Industry
![Page 2: Directorate General for Enterprise and Industry 1 Opportunities for ethnic minority Entrepreneurs European week of Regions and Cities, Brussels 11 October](https://reader035.vdocument.in/reader035/viewer/2022081821/5515321a55034685568b486f/html5/thumbnails/2.jpg)
2
Directorate General for
Enterprise and Industry
Introduction
• in 15-20 years ethnic minorities will have a dominant place in the population of large European cities
• more entrepreneurship for ethnic minorities will facilitate their integration in the society
• also a considerable number of ethnic minority entrepreneurs need bank finance,
• But all need a bank account
• finance opportunities of ethnic minority entrepreneurs depend to a large extend from the person, his education, business plan, track record
• banks are not allowed by law to lend to a person that is unable to reimburse
![Page 3: Directorate General for Enterprise and Industry 1 Opportunities for ethnic minority Entrepreneurs European week of Regions and Cities, Brussels 11 October](https://reader035.vdocument.in/reader035/viewer/2022081821/5515321a55034685568b486f/html5/thumbnails/3.jpg)
3
Directorate General for
Enterprise and Industry
Definition of ethnic minority entrepreneurs
• an individual which is citizen of an EU 25 member state/ EEA country but has an immigrant background ( up to the 3rd generation)
• an individual that recently came to an EU 25 member State/ EEA Country from a 3rd non EU country and holds a valid residency permit or had the necessary authorisation to become self-employed or start-up business
![Page 4: Directorate General for Enterprise and Industry 1 Opportunities for ethnic minority Entrepreneurs European week of Regions and Cities, Brussels 11 October](https://reader035.vdocument.in/reader035/viewer/2022081821/5515321a55034685568b486f/html5/thumbnails/4.jpg)
4
Directorate General for
Enterprise and Industry
Statistics for ethnic minorities
• definition used for migrants and minorities varies considerably in the EU-member states
• in DE, AT after naturalisation immigrant are removed from statistics.• in UK, FR, NL, DK ethnicity appears in statistics; in other member
states not recorded or forbidden• different statistical concepts,• statistics on ethnic minorities very different, incoherent and quite
weak• statistics on ethnic minority entrepreneurs and self-employed in
formal or informal sector could be misleading• citizens with Chinese, Pakistani or Turkish origin are more
entrepreneurial than those from black Africa or former Sovjet block
![Page 5: Directorate General for Enterprise and Industry 1 Opportunities for ethnic minority Entrepreneurs European week of Regions and Cities, Brussels 11 October](https://reader035.vdocument.in/reader035/viewer/2022081821/5515321a55034685568b486f/html5/thumbnails/5.jpg)
5
Directorate General for
Enterprise and Industry
Education of ethnical minority entrepreneurs
• majority of first generation migrants has low level of education or qualification
• exception: migrants selected for their skills ( nurses, doctors computer specialists)
• educational level improves for 2nd and 3rd generation including university
![Page 6: Directorate General for Enterprise and Industry 1 Opportunities for ethnic minority Entrepreneurs European week of Regions and Cities, Brussels 11 October](https://reader035.vdocument.in/reader035/viewer/2022081821/5515321a55034685568b486f/html5/thumbnails/6.jpg)
6
Directorate General for
Enterprise and Industry
Reasons for self- employment
• entrepreneur by necessity versus entrepreneur by vocation• escape unemployment or risk of unemployment (simple jobs suffer
under delocalisation to low cost countries)• escape 3d jobs- dirty, dangerous and demanding occupation, often
badly paid and almost no hope for promotion• become self-employed : facilitate integration into the society• reduces the risk of young people to become criminal• entrepreneurs by necessity mostly start a small business with low
entry barriers such as• restaurant, food shop, house cleaning and repair, health care,
nurses, gardening, textiles and clothing etc.• main target group of clients: same ethnic community or residents
from the same urban area
![Page 7: Directorate General for Enterprise and Industry 1 Opportunities for ethnic minority Entrepreneurs European week of Regions and Cities, Brussels 11 October](https://reader035.vdocument.in/reader035/viewer/2022081821/5515321a55034685568b486f/html5/thumbnails/7.jpg)
7
Directorate General for
Enterprise and Industry
Entrepreneurship of Ethnic minorities
• depending on countries and the mix of ethnic minorities the entrepreneurial dynamism vary considerably.
• entrepreneurial activities of ethnic minorities have increased • • in SE immigrants are more likely to be self- employed than native
Swedes
• DE number of self employ persons among foreigners was 8.6% against 10% of the total employed population
![Page 8: Directorate General for Enterprise and Industry 1 Opportunities for ethnic minority Entrepreneurs European week of Regions and Cities, Brussels 11 October](https://reader035.vdocument.in/reader035/viewer/2022081821/5515321a55034685568b486f/html5/thumbnails/8.jpg)
8
Directorate General for
Enterprise and Industry
Access to Finance
• Warwick Business School– no significant differences in likelihood of using external finance between
white and ethnic minority owned business- some 80% of SME have used external sources of finance in last 3 years
– 25% of ethnic minority entrepreneur report lack of self –confidence with finance (Average 16%)
– ethnic minority owned businesses have significantly lower overdraft limits than white owned business (L 18 .000 versus L 35.000 )
– no significant differences in the size of term loans by gender or ethnicity
– no significant differences in rejections or discouragement rates by gender, ethnicity or growth rate
![Page 9: Directorate General for Enterprise and Industry 1 Opportunities for ethnic minority Entrepreneurs European week of Regions and Cities, Brussels 11 October](https://reader035.vdocument.in/reader035/viewer/2022081821/5515321a55034685568b486f/html5/thumbnails/9.jpg)
9
Directorate General for
Enterprise and Industry
Access to Finance
• ethnic minorities entrepreneurs raise funds from family, then from the same ethnic minority community, and then from banks
• all banks say to treat finance requests from ethnic minorities in the same way than from white citizens
• often banks are reluctant to finance start-up businesses irrespective of gender, ethnicity or growth prospects
• bank clerks have to reach given profit targets, failure to meet them will reduce their promotion prospects
• Basel II will increase the transparency requests by banks, • high risk will lead to higher interest rates, lower risk to lower interest
rates
![Page 10: Directorate General for Enterprise and Industry 1 Opportunities for ethnic minority Entrepreneurs European week of Regions and Cities, Brussels 11 October](https://reader035.vdocument.in/reader035/viewer/2022081821/5515321a55034685568b486f/html5/thumbnails/10.jpg)
10
Directorate General for
Enterprise and Industry
Access to finance
• a large number of ethnic minority entrepreneurs request micro- loans with less than € 25 000
• they are often unable to offer sufficient guarantees
• poorly presented business plans and moderate business situations have an impact on the size and the cost of loans, even if they can assure credit institutions of good market opportunities
• do ethnic minority entrepreneurs communicate efficiently with banks clerks (language, behaviour, clothing)?.
![Page 11: Directorate General for Enterprise and Industry 1 Opportunities for ethnic minority Entrepreneurs European week of Regions and Cities, Brussels 11 October](https://reader035.vdocument.in/reader035/viewer/2022081821/5515321a55034685568b486f/html5/thumbnails/11.jpg)
11
Directorate General for
Enterprise and Industry
Best practices for finance of ethnic minority entrepreneurs
• all public promotional banks ( KfW, BDPME, ICO) offer their loans to all SME irrespective of gender and ethnicity
• also Commission financial instruments managed by EIF are offered to all SMEs
• some banks are promoting finance of ethnic minority entrepreneurs such as
• Cooperative Banks in Italy for reason of corporate social responsibility (in form of reduced guarantee requirements)
• Dutch cooperative banks with specific loans for ethnic minorities • Specific measures issued by Member States in disadvantaged
urban areas
![Page 12: Directorate General for Enterprise and Industry 1 Opportunities for ethnic minority Entrepreneurs European week of Regions and Cities, Brussels 11 October](https://reader035.vdocument.in/reader035/viewer/2022081821/5515321a55034685568b486f/html5/thumbnails/12.jpg)
12
Directorate General for
Enterprise and Industry
Business opportunities for ethnic minorities
• by filling market gaps – taking over small shops from native traders (retirement, decline of
turnover in depressed urban areas with high immigrant density
– creation of new shops in urban areas for citizens without car
• by creation of new markets for specific products or services– ethnic fast food franchising with high quality service (food is safe, fresh
and low fat)
– tour operator for holidays in the country of origin (e.g. Turkish tour operator in Germany)
– personal and health services for the ageing society in particular for women
– arrival of highly skilled academics (financial analysts, software experts) as employee could lead in several years to new start ups, as Asian immigrants in California have successfully shown
![Page 13: Directorate General for Enterprise and Industry 1 Opportunities for ethnic minority Entrepreneurs European week of Regions and Cities, Brussels 11 October](https://reader035.vdocument.in/reader035/viewer/2022081821/5515321a55034685568b486f/html5/thumbnails/13.jpg)
13
Directorate General for
Enterprise and Industry
Specific actions of the DG ENTR
• Ethnic minority entrepreneurs are a specific target group in the entrepreneurship action plan ( 2004)
• Launch of a study on best practices for ethnic minority entrepreneurs
• Network of member states experts on ethnic minority entrepreneurs
• Final report and conference in 2007
• THANK YOU FOR YOUR ATTENTION
![Page 14: Directorate General for Enterprise and Industry 1 Opportunities for ethnic minority Entrepreneurs European week of Regions and Cities, Brussels 11 October](https://reader035.vdocument.in/reader035/viewer/2022081821/5515321a55034685568b486f/html5/thumbnails/14.jpg)
14
Directorate General for
Enterprise and Industry
Thank you for your attention