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State of the Nation

Migrant-Run Businesses Are Running Much of Britain, But Where & In What Sectors?

By March 26, 2014 No Comments
Migrant-Run Businesses Are Running Much of Britain, But Where & In What Sectors?

UK map outlineImmigration has become one of Britain’s hottest political topics. The UK Independence Party’s recent electoral successes have made it a crucial issue for all the mainstream parties. It has exposed stark divisions within the Coalition, between European leaders – and even between departments within the UK Government.

But away from the scaremongering and talk of immigrants taking jobs from British-born candidates, more attention is being paid to the positive role that immigrants play in establishing and developing new businesses in the UK. History shows it, and recent research confirms it – foreigners who come to settle in a new country often bring great enterprising zeal, determination to succeed, and the energy needed to make a business work.

When a study into migrant business owners was published earlier this month by the Centre for Entrepreneurs (CFE), it found that no fewer than one in seven British companies now turning over at least £1 million a year was founded by someone from overseas.  More striking still, these foreign-born entrepreneurs who are contributing so much to the British economy were found to come from a staggering 155 different countries.

The report, which was carried out in conjunction with research company DueDil, excluded sole traders, but it revealed some remarkable facts about a large proportion of the UK’s businesses:

  • More than 464,500 companies in Britain have been started by migrant entrepreneurs. This equates to about 14 per cent of all UK firms.
  • There are almost 457,000 entrepreneurs operating in the UK who were born in other countries.
  • More than 17 per cent of non-UK nationals arriving in Britain start their own companies, compared with just 10.4 per cent of those who are British born and bred.

As Damian Kimmelman, DueDil’s Chief Executive, points out, the study shows “that migrant entrepreneurs are hyper-productive, net contributors to the UK economy.”

So, who are these foreign-born business innovators, what sort of companies are they running in Britain, and where are they from? Frankly, the answers might surprise you. Ranked by the greatest number of entrepreneurs, the countries that are boosting the UK’s business numbers are:

  • Ireland. Almost 49,000 people from the republic have set up businesses in the UK. However, in truth, this figure is a little misleading. Of the 17,000 migrant-run companies based in Belfast, which is, of course, part of the United Kingdom, the vast majority were started by people from across the border in the Irish Republic.
  • India. More than 32,500 firms in Britain were founded by business owners of Indian origin.
  • Germany. Germans account for the ownership of about 30,700 businesses in Britain.
  • The United States. Almost 30,000 of the UK’s estimated 4.9 million firms have an American at their head.

Other countries also have a big entrepreneurial presence in the UK – China, Poland, France and Italy are significantly represented in Britain’s SME ranks.

And it can’t be said that immigrants are drawn to just a few sectors of the economy. They’re evident in every industry and walk of life, though there are some categories where foreign-born business owners seem to make their mark in particular:

  • Construction and real estate. About 10.3 per cent of all migrant-run firms in Britain are in housing or property-related fields.
  • Consumer goods, such as clothing, food and jewellery, are produced by 7.6 per cent of foreign-owned businesses.
  • Information technology is another popular field with migrant entrepreneurs, accounting for 6.1 per cent of foreign-run companies.
  • Manufacturing. One in 20 SMEs run by migrants is in this type of heavy industry.
  • Management consultancy accounts for 3.2 per cent of all foreign-owned businesses.
  • Media and entertainment is next in line, accounting for 3.1 per cent of migrant business owners.
  • Healthcare. Entrepreneurs may not necessarily have been born in Britain, but they do see the business opportunity in looking after the nation’s health. Exactly 3 per cent of migrant firms operate in the field.

When it comes to analyzing where migrants seek their fortune, London is overwhelmingly the most popular place to start a business. The research identified 188,000 immigrant enterprises that were founded in the capital. This compared with 19,000 started in Birmingham, Britain’s second city. And just as immigrants as a whole from a particular community or country tend to cluster in one place, the same is true of immigrant entrepreneurs. The study found that, for example, Birmingham has a concentration of businesses started by German nationals; Harrow has a cluster of enterprises launched by immigrants from India; and there’s a disproportionately large number of companies in Cardiff whose founders are from China.

The findings echo evidence from elsewhere in the world indicating that immigrants are particularly vigorous entrepreneurs. The Global Entrepreneurship Monitor Global 2012 Report indicated that this is a worldwide pattern. When people start a new life in a new country, they show a real appetite for taking control of their destiny by launching a business – and they’re ambitious for its growth prospects. The report says: “In most regions [of the world], first-generation migrants are more active in business start-ups than non-migrants… start-ups founded by both first and second-generation migrants are on average more growth-orientated than those of non-migrants across all economic development levels.”

So, one could argue that those immigrants appear to be doing the UK more good than harm. Despite all the political rhetoric suggesting that immigration squeezes native Britons out of the jobs market, much indicates otherwise. A review carried out jointly by the Home Office, Department for Business, Innovation and Skills, and the Department for Work and Pensions concluded that there was “very little evidence” that overseas workers have taken jobs from the British unemployed. If anything, it seems that many people who choose to make Britain their home are creating work. It doesn’t take much to see the success of foreign business owners in towns and cities across England, Scotland, Wales and Northern Ireland, setting up and growing enterprises, and employing many people along the way. Numbers are hard to pin down, but the CFE’s research found that companies founded or co-founded by migrant entrepreneurs employ about 1.16 million people – one in seven of all employees in this part of the economy.

People will always move countries, whether by force or by choice. Either way, their new home benefits from most migrants’ energy, innovation and drive. And Britain is no different – as a good proportion of its business community already shows.
Image courtesy of Ventrilock /

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