1. Diversity and SMEs: Existing
Evidence and Policy Tensions
sara.carter@strath.ac.uk
mram@dmu.ac.uk
k.trehan@bham.ac.uk

2. Introduction
• Longstanding concern that entrepreneurial activities and ambitions are
restricted to narrow range of social groups
• Some ethnic minorities and women characterised as both less interested
and possessing lower levels of resources
• Attempts to increase participation rates have had only modest results
• White Paper focuses on ethnic-minority and women-led enterprises, the
context of disadvantage, the existing research evidence and current policy
tensions

3. Ethnic Minority Owned
Businesses
All SME
Emps
0-1
years
2-3
years
4-5
years
6-10
years
11-20
years
Over 20
years
SBS
2012 N=
4768 86 219 244 715 1152 2332
% % % % % % %
MEG-led 7 12 11 13 8 8 5
SBS
2010 N=
3817 66 117 212 532 942 1930
% % % % % % %
MEG-led 8 16 10 12 10 10 5

4. Money, Markets, Management
1. Access to finance cited as significant barrier
• Credit outcomes worse for particular ethnic groups
• Standard risk factors account for discrepancies
• Discouraged borrowers
2. Structural disadvantage arising from market sectors
• Small retailing
• Catering
• Clothing manufacture
3. Access to appropriate skills and expertise
• EMBs increasingly entering ‘non-traditional’ sectors
• Mismatch between qualifications and occupation
• Market ‘break-out’ dependent on strategic deployment of labour

5. Women-owned Businesses
Source: BIS (2012) Small
Business Survey 2012
Businesses with no
employees
Businesses with
employees
N = 955 4768
% %
Majority-led by women 21 19
Equally-led 16 23
At least 50% female
(majority led and equally
led)
37 42
Women in a minority 2 8
Entirely male-led 61 49

6. UK Self-employment by SOC Classification
Standard
Occupational
Classification
Employed
All
Men Women Self
Employed
All
Men Women
Managers /
Senior officials 14.5 18.9 10.0 17.9 16.3 22.1
Prof. Occupations 12.5 13.6 11.3 12.7 13.1 11.8
Associated Prof & Tech 13.8 13.2 14.4 15.2 13.5 19.6
Admin & Secretarial 14.0 5.4 22.7 3.2 0.7 9.9
Skilled Trades 8.7 15.6 1.7 30.5 39.4 6.5
Personal Services 8.0 2.5 13.7 5.5 0.9 18.1
Sales /Customer Servic 8.9 5.2 12.6 2.1 1.4 3.7
Process/ Machine Ops 7.3 12.4 2.1 7.9 9.6 3.1
Elementary Occupation 12.3 13.2 11.5 5.1 5.1 5.1
All (thousands) 24729 12630 12099 3624 2658 966

7. Money, Markets, Management
1. Why do women use less finance than men when starting a business?
• Structural dissimilarities between male and female businesses?
• Supply side discrimination?
• Demand side debt aversion?
2. Access to markets
• Smaller scale business, predominance of services
• US supplier diversity programmes led by corporates believe this to be an issue
3. Laying waste to the ‘female underperformance hypothesis’
• Controlling resource inputs with performance outputs demonstrates
performance equality by men and women
• In practice, women-owned firms are under-resourced

8. The Role of the Household
• Research studies focus on individual / firm
• ‘EMBs’ and ‘Women-owned businesses’ are research constructs seldom
used by individuals
• Self-employment more likely in households where one adult is in
employment – ‘wage subsidy to entrepreneurship’
• Growth viewed as a firm-level issue separate from the people leading and
working in the business
• Need to explore the business-household interactions around business
start-up and growth

9. Policy Tensions
1. To what extent are the outcomes of diverse enterprises a product of
discrimination or a reflection of complex social, economic and
institutional factors?
2. Successive governments have tried to boost self-employment among
women and ethnic minority groups; but should greater emphasis be
accorded to qualitative business development?
3. There is continuing debate on the desirability of mainstream approaches
to business support versus more specialist interventions for diverse
enterprises.
4. To what extent of market failure in the support provided to diverse
enterprises is still a matter of debate.

10. Future Work
1. Understanding the drivers and barriers of entrepreneurial
growth in under-represented groups
2. Understanding the connection between households and
the decision to finance and grow diverse businesses
3. Mapping and activating support for diverse business
networks through the Enterprise Diversity Alliance (EDA)

11. Contact us:
If you would like more information about the Diversity & SMEs WorkPackage, please
contact the Theme Leaders sara.carter@strath.ac.uk, mram@dmu.ac.uk, or
k.trehan@bham.ac.uk
For more information about the ERC and any of its activities please contact
the Director, Stephen Roper at stephen.roper@wbs.ac.uk or the Deputy
Director, Mark Hart at mark.hart@aston.ac.uk.
More details about the activities of the ERC and our latest events can be
found at:
www.enterpriseresearch.ac.uk