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CHAPTER THREE SECONDARY DATA
Introduction
3.1 The secondary data analysis uses self-employment
data as a proxy for the importance (that is the numbers of
minority ethnic-owned businesses) and the distribution of
minority ethnic enterprise in Scotland. This data is
corroborated through the additional collection and analysis
of data on small employers, which does give a breakdown by
ethnicity, but not in the same detail as self-employment
data. The research team did also collect neighbourhood
statistics, which give the number of small and medium-sized
enterprises by ward level. However, this data gives no
breakdown by ethnicity and is drawn from
VAT-registered businesses only.
Therefore, it contains some deficiencies and does not add
usefully to the overall picture of the importance and
distribution of minority ethnic enterprise in Scotland,
apart from known concentrations of minority ethnic
enterprises in small inner-city locations, such as
Tradeston in Glasgow. This data has been omitted from the
following analysis.
3.2 Following on from this explanation, the reader needs
to bear in mind that as a proxy for the numbers of minority
ethnic- owned enterprises, the data will have a number of
deficiencies, it will tend to:
- Over-estimate the importance of
MEBs in rural areas and
under-estimate their importance in urban areas, because
overall self-employment rates are generally higher in
rural areas.
- In comparison to white-owned businesses, it will
tend to over-estimate the importance of
MEBs, because national
UK rates of self-employment and
minority ethnic ownership are higher in small and
micro-sized firms compared to white owners.
- In gender differences it will tend to
under-estimate the importance of women-owned minority
ethnic enterprises, because overall self-employment
data is known to under-estimate the number of
women-owned businesses (
SBS, 2004).
- Finally, the reader should bear in mind that
results presented are from using 2001 Census data
records and obviously the pattern of minority ethnic
enterprise will have altered a little, although not
significantly. This approach is still methodologically
better than using more recent Labour Force Survey data
on self-employment, which relies on sampling
techniques. It is also methodologically consistent with
the baseline data analysis, which is based on the 2001
dataset and survey, as explained earlier.
3.3 Overall, with these deficiencies in mind, this is
still the most reliable indicator of the numbers and
proportions of minority ethnic enterprises in Scotland.
When combined with the baseline data analysis in Chapter 4,
it provides a powerful, quantitative picture of the
relative numbers of minority ethnic enterprises in
Scotland, from this an estimate of their importance in the
economy is given later, something that has not been
achieved in previous studies.
All Scotland
3.4 Table 3.1 illustrates self-employment rates for
Scotland for different minority ethnic groups, using
standard Census 2001 definitions of ethnicity. The data
used to derive the self-employment rates can be found in
Annex 1, Table 1. The average self-employment rate
2 for Scotland is calculated at 10.2 per cent, for
minority ethnic groups. However, for South Asians, the
self-employment rates are much higher at 28 per cent for
Pakistanis, 21 per cent for Chinese and 20 per cent for
Indians. Alternatively, there were over 7,400 self-employed
from minority ethnic groups, accounting for over 3 per cent
of all the self-employed in Scotland. It is worth noting
that the Scottish Executive's report gives slightly higher
self-employment rates for some minority ethnic groups,
particularly for Pakistanis and Chinese (Scottish
Executive, 2004). They are reported at 32 per cent and 22
per cent respectively. The difference is accounted for by
the definition of economically active used by the Census
classifications (ages 16-74). As noted above, the Census
data tends to under-estimate the importance of minority
ethnic groups due to their younger demographic
structure.
3.5 Figure 3.1 shows that other minority ethnic groups
also have higher rates of self-employment than the average
for Scotland with the Bangladeshis' rate being 18 per cent
and other South Asians being 16.5 per cent. Although there
are lower rates of self-employment among African and
Caribbeans in Scotland, at 6.8 per cent and 8.7 per cent
respectively, their overall rates for the
UK are also below 10 per cent and are
not significantly different from the
UK rates (
ONS, Census 2001)
3.
3.6 Data from the 2001 Census has also been collected
for the importance of minority ethnic groups as small
organisation employers and own account workers (under Class
4;
NS-
SEC,
ONS, 2004). This data is shown by the
tables in Annex 2 and can be used to corroborate the
self-employment indicators on the importance of minority
ethnic enterprise for Scotland. Aggregate data from Table 1
in Annex 2, under this definition, are illustrated by
Figure 3.2
Figure 3.1 Self-employment rates for all
Scotland by minority ethnic group (per cent)
Source:
http://www.scrol.gov.uk/scrol/analyser
see also
CD Rom Series. Census Analysis - General
Register Office for Scotland, Edinburgh
Figure 3.2: Importance of minority ethnic group
for all Scotland using small employers (per
cent)
Source:
http://www.scrol.gov.uk/scrol/analyser
see also
CD Rom Series. Census Analysis - General
Register Office for Scotland, Edinburgh
3.7 The numbers (and hence importance) of
MEBs for Scotland is greater than the
overall levels of
MEB demographics might indicate as
mentioned earlier. With a total number of 7,532
MEB self-employed, this accounts for
just over 3 per cent of all self-employed in Scotland.
Alternatively using the number of small employers,
MEB owned small-employers account for
3.6 per cent.
3.8 By extrapolation, using self-employed as a proxy for
minority ethnic enterprise, then there are probably over
2,500
MEBs that are small firms with
employees. Data on the number of enterprises in Scotland
from the
DTI (source, Small Business Service) and
used by the Enterprise, Transport and Lifelong Learning
Department (
ETLLD), Analytical Services Division (
ASD) of the Scottish Executive indicates
that there were 78,560 small firms with employees (where
small firms are defined as less than 50 employees). This
data is compiled from
VAT registered enterprises and
Inter-Departmental Business Data (source, Small Business
Service) and gives the most accurate data on the number of
enterprises and small firms that are employers (as opposed
to the self-employed). According to a report from the
ETLLD (
ASD) of the Scottish Executive, there
were 149,300 registered enterprises operating in Scotland
in 2001 (Teasdale and Walker, 2003). From this figure it is
implied that there are over 4,400 registered minority
ethnic enterprises in Scotland. (Assuming that minority
ethnic enterprise is represented in the same proportions in
the numbers of registered enterprises as in the numbers of
self-employed in Scotland. However, previously we have
noted that in some respect, due to demographic profiles,
Census data may underestimate the numbers of minority
ethnic enterprises.)
3.9 The total number of enterprises, including
unregistered enterprises, is more difficult to calculate,
but
DTI (Small Business Service) data, that
includes zero employees, indicates over 234,000
'enterprises' for Scotland, indicating that in total there
are over 8,000
MEB enterprises. Alternatively, other
sources suggest 240,000 'enterprises' in Scotland. For
example, the Scottish Executive Omnibus Survey (2003, page
1), Comments that
"Small and medium sized enterprises (
SMEs) are a very important sector of
the Scottish economy. They account for 99% of the
243,000 businesses (November 2001) active in Scotland
and they represent 50% of non-government
employment."
3.10 From this data it can be implied that there are a
total of over 8,500
MEBs in Scotland (holding to the same
assumption that minority ethnic enterprises are represented
in the same proportion).
3.11 The importance of minority ethnic enterprise to
Scotland's
GDP, can also be estimated from their
percentage of the number of private sector enterprises and,
therefore, their contribution to private sector turnover.
The
DTI have stated "a dynamic small
business community is central to enterprise in the
UK, generating 52% of private sector
turnover" (
DTI, 2003).
SMEs account for 50% of private sector
employment (Scottish Executive Omnibus Survey, 2003).
3.12
MEBs, therefore, account for about 3 to
3.5 per cent of private sector turnover, or 1 to 1.5 per
cent of Scotland's
GDP. Revised estimates of Scotland's
GDP in 2001 put total
GDP at £64 billion, or approximately
£13,660 per head (Scottish Executive, Statistics and
ONS, 2004). This suggests, using a
number of assumptions
4, that the contribution of minority ethnic enterprise
to Scotland's
GDP is in the region of £500 million to
£700 million. A detailed explanation of the process of
estimating the contribution of
MEBs to
GDP is given in Annex 3.
Differences by gender
3.13 There are, of course, significant differences by
gender when considering the importance of minority ethnic
enterprise. Much higher rates of participation by minority
ethnic groups in self-employment for males compared to
females are in evidence. Thus the rate for Pakistanis
increases among males to 34 per cent, for Chinese to 25 per
cent and to 23 per cent for Indians. These compare to 16.6,
15 and 15 per cent, respectively, for female rates of
self-employment. However, the point should be made that,
even with these lower rates for female self-employment,
they are still well above the national rate for women in
Scotland, which is only 6 per cent.
3.14 In terms of the participation rates by gender, male
minority ethnic self-employed accounts for 74 per cent of
all minority ethnic self-employed in Scotland, overall
proportionate activity rates are 23.6 per cent for males
compared to 12.4 per cent for females.
3.15 Data on these minority ethnic self-employment rates
by gender can be examined in Annex 1, Tables 2 and 3 and
are illustrated in Figures 3.3 and 3.4.
Figure 3.3: Males: self -employment rates by
ethnicity (per cent)
Source:
http://www.scrol.gov.uk/scrol/analyser
see also
CD Rom Series. Census Analysis - General
Register Office for Scotland, Edinburgh
Figure 3.4: Females: self-employment rates by
ethnicity (per cent)
Source:
http://www.scrol.gov.uk/scrol/analyser
see also
CD Rom Series. Census Analysis - General
Register Office for Scotland, Edinburgh
Geographical distribution of minority ethnic
enterprise
3.16 Although national census data indicates the
importance of minority ethnic enterprise for Scotland, this
hides considerable variation in this importance across the
country. Annex 1 provides tables on the importance of
self-employment for Scotland's main cities(Glasgow,
Edinburgh, Aberdeen and Dundee); the remaining Lowland
areas apart from the South of Scotland; the Highlands and
Islands and the South of Scotland, Dumfries and Galloway
and the Scottish Borders. Annex 2 provides equivalent data
for the number of small employers for the same areas by
minority ethnic groups, although there are fewer breakdowns
by ethnicity in the tables in Annex 2.
The cities
The city of Glasgow
3.17 Glasgow is the most important city in Scotland for
the numbers and proportion of minority ethnic enterprises.
With a minority ethnic population of over 31,500, it
contains 31 per cent of the minority ethnic population for
all of Scotland. Glasgow's share of minority ethnic
enterprise is equally as important, as might be expected
given the geographical dominance of Glasgow for Scotland's
minority ethnic population. The city contains 25 per cent
of all minority ethnic self-employment for Scotland. For
small employers and own-account workers the city is
slightly more important, representing nearly 27 per cent of
this category of minority ethnic enterprise.
3.18 Figure 3.5, illustrates the self-employment rates
for minority ethnic groups in Glasgow, using the 2001
Census data tables. As might be expected, self-employment
rates in Glasgow are lower than the national average, but
for minority ethnic groups the self-employment rates are
much closer to their national averages, especially for the
Indian and Pakistani communities. More detailed data on the
numbers of self-employed for Glasgow can be examined in
Table 10 in Annex 1 and, by comparison, Table 8 in Annex 2
for the numbers of small employers. Glasgow is particularly
important for Pakistani-owned businesses and contains 34
per cent of all the self-employed in Scotland that are in
this ethnic group.
Figure 3.5: Self-employment rates for minority
ethnic enterprise in Glasgow (per cent)
Source:
http://www.scrol.gov.uk/scrol/analyser
see also
CD Rom Series. Census Analysis - General
Register Office for Scotland, Edinburgh
3.19 The importance of
MEBs for Glasgow is revealed when
comparing the minority ethnic self-employed to the total
numbers of self-employed for the city.
MEBs account for 10.6 per cent of the
self-employed and when considering the proportion of small
employers this rises to 14 per cent. These are the highest
proportions of any city or area in Scotland. Thus
MEBs are particularly important in
Glasgow. Neighbourhood ward data was also collected for
Glasgow and indicated that there are 10,600 firms
registered for
VAT, of which, approximately 96 per cent
are small firms, that is, they employ less than 50
employees. Thus the contribution of
MEBs to small firms and small firm
ownership in Glasgow is particularly important.
The city of Edinburgh
3.20 The City of Edinburgh is Scotland's second city in
terms of importance for minority ethnic enterprise. With a
minority ethnic population of over 18,000 it contains 18
per cent of Scotland's minority ethnic population.
Edinburgh contains 15.6 per cent of the minority ethnic
self-employed for all of Scotland with a slightly lower
proportion of minority ethnic small employers and
own-account workers.
3.21 Self-employment rates for Edinburgh are illustrated
in Figure 3.6 There are particularly high, almost dramatic,
rates of self-employment in the Pakistani community,
although in terms of numbers this ethnic group is
relatively much less important than they are in Glasgow.
However, Edinburgh is relatively important for African and
Caribbean-owned businesses. For example, the city contains
over 30 per cent of all African self-employed in Scotland.
Although overall numbers are small, this still represents
the most significant presence of these communities in
Scotland.
3.22 Although a much lower proportion than the City of
Glasgow, the number of
MEBs in Edinburgh is important,
accounting for 5.1 per cent of the total numbers of
self-employed for the city.
Figure 3.6: Self-employment rates for minority
ethnic enterprise in Edinburgh (per cent)
Source:
http://www.scrol.gov.uk/scrol/analyser
see also
CD Rom Series. Census Analysis - General
Register Office for Scotland, Edinburgh
The city of Dundee
3.23 Although third in importance, Dundee comes some way
behind Glasgow and Edinburgh for the importance of minority
ethnic enterprise as measured by minority ethnic
self-employment. With a minority ethnic population of over
5,000, it has 5.2 per cent of Scotland's minority ethnic
population. Whether taking self-employment data or small
employer data, it accounts for 4.4 per cent of Scotland's
minority ethnic enterprises.
3.24 Data on self-employment rates in Dundee can be
examined in Table 8 in Annex 1. Although the numbers of
minority ethnic self-employed are relatively small compared
to other cities in Scotland, there are relatively high
rates of self-employed in the South Asian communities,
especially Pakistani and Indian communities, where the
rates are above 20 per cent.
3.25 The proportion of all self-employed in Dundee that
are
MEBs is 7.3 per cent, indicating their
importance to the vitality of the city's economy.
Figure 3.7: Self-employment rates for minority
ethnic enterprise in Dundee (per cent)
Source:
http://www.scrol.gov.uk/scrol/analyser
see also
CD Rom Series. Census Analysis - General
Register Office for Scotland, Edinburgh
The city of Aberdeen
3.26 Aberdeen is the least important of Scotland's
cities for minority ethnic enterprise when measured by the
number of minority ethnic self-employed or the numbers of
small employers. Although its minority ethnic population of
over 6,000 represents 6 per cent of the minority ethnic
population for Scotland, it accounts for just 3.4 per cent
of all minority ethnic self-employed or only 3.0 per cent
of minority ethnic small employers for Scotland.
3.27 Data on self-employment rates by ethnic group for
the city can be examined in Annex 1, Table 7 and are
illustrated in Figure 3.8. A notable feature in Aberdeen is
that the rates are uniformally lower than other cities and
compared to national rates. For example, the
self-employment rate for the Indian community is only 5.1
per cent compared to national rates of 19 per cent. Rates
of self-employment for all categories do not rise above 20
per cent with the highest rates in the Pakistani community.
For other ethnic groups, rates are nearer the national
trends, but are still notably lower. This may reflect
greater employment market opportunities in Aberdeen.
Figure 3.8: Self-employment rates for minority
ethnic enterprise in Aberdeen (per cent)
Source:
http://www.scrol.gov.uk/scrol/analyser
see also
CD Rom Series. Census Analysis - General
Register Office for Scotland, Edinburgh
Minority ethnic enterprise outside the
cities
The Central Belt and Lowland Scotland
3.28 The remaining areas of Lowland Scotland contain
significant levels of minority ethnic enterprise as shown
by Table 4, Annex 1 on self-employment and by Table 2,
Annex 2 on small employers. With 3, 375 minority ethnic
self-employed, this area contains over 45 per cent of all
the minority ethnic self-employed in Scotland. A similar
proportion is accounted for with the number of small
employers and own-account workers. This demonstrates that
minority ethnic enterprise is important outside the main
cities. Rates of self-employment are illustrated in Figure
3.9. This shows, for example, the average rate of
self-employment in the minority ethnic groups for this area
is 23.1 per cent, being particularly high with the
Pakistani community at 35 per cent. These compare to an
average self-employment rate for this area of only 9.7 per
cent.
3.29 It should be remembered, however, that medium and
larger enterprises will be more important in the cities.
Nevertheless for local economic development in these areas,
these rates indicate the important contribution to local
economic development by
MEBs in the Central Belt.
Figure 3.9: Self-employment rates for minority
ethnic enterprise in Lowland Scotland excluding the
South and the main cities (per cent)
Source:
http://www.scrol.gov.uk/scrol/analyser
see also
CD Rom Series. Census Analysis - General
Register Office for Scotland, Edinburgh
Highlands and Islands and the South of
Scotland
3.30 The remaining areas of Scotland have smaller
numbers of minority ethnic self-employed, and obviously are
of much less importance in terms of numbers, compared to
other areas, as an important contributor to the local
economy.
3.31 For illustrative purposes only, self-employment
rates are shown for the Highlands and Islands region. In
rural areas of Scotland, minority ethnic communities are
more dispersed, reducing the importance of social capital.
The numbers involved are comparatively small as shown in
Annex 1. For example, the minority self-employed account
for less than 1 per cent of the total self-employed in the
Highlands and Islands. Nevertheless, as indicated by
previous work, their role is perhaps less visible, but
still can be significant and there are additional issues
for
MEBs in rural areas, associated with the
more dispersed distribution. It should also be noted that
in the context of an ageing population structure (and
declining population in some areas of the Highlands and
Islands), the role of
MEBs could be significant in
contributing to the vitality of local economies (Bryden,
et al. 2001).
Figure 3.10: Self-employment rates for minority
ethnic enterprise in the Highlands and Islands (per
cent)
Source:
http://www.scrol.gov.uk/scrol/analyser
see also
CD Rom Series. Census Analysis - General
Register Office for Scotland, Edinburgh
Summary
- The secondary data indicates that minority ethnic
enterprise ownership of businesses is important in
Scotland, accounting for just over 3 per cent of all
self-employed in the nation, alternatively
minority-owned businesses account for 3.6 per cent of
the number of small employers (using
NEC-
SE classification). By
extrapolation, and bearing in mind limitations of the
data, it is estimated that there are over 4,400
MEB registered enterprises in
Scotland, for unregistered enterprises there may be
over 8,000
MEBs, inclusive of those with zero
employees.
- The importance of
MEBs is greater than the ethnic
breakdown of Scotland's population might suggest. This
is due to the higher rates of self-employment and
business ownership in minority ethnic communities than
other ethnic groups, with the highest rates of
self-employment in the Pakistani, Chinese, Indian and
Bangladeshi communities respectively.
- The importance of
MEBs for Scotland will increase in
the future, on current trends, due to the younger
demographic profile of the minority ethnic population.
For example, the rates of self-employment are
considered to be under-estimated because of this
factor. In comparison to the white population,
Scotland's minority ethnic population will increase
(rather than decrease) the numbers of younger people
that may start an enterprise (below 30 years of
age).
- Glasgow is Scotland's most important city for
minority ethnic enterprises.
MEBs account for 10.6 per cent of
the self-employed and 14 per cent of small employers.
Neighbourhood data indicated 10,600 firms registered
for
VAT in Glasgow. Extrapolating from
these data sets, suggests over 1600
VAT registered
MEBs in Glasgow, underling the
importance of minority ethnic enterprise for the
city.
- High rates of self-employment also exist in
Edinburgh, particularly in the Pakistani community.
Although the numbers of
MEBs are lower, the number of
MEBs in Edinburgh is important,
accounting for 5.1 per cent of the total numbers of
self-employed for the city.
- In the remaining cities, Aberdeen and Dundee; there
are higher rates of self-employed and in numbers of
MEBs in Dundee. In Dundee
MEBs account for over 7 per cent of
the self-employed.
- Outside the main cities in Scotland,
MEBs are also important in areas of
the Central Belt. Indeed this area contains over 45 per
cent of all the minority ethnic self-employed in
Scotland, with a similar proportion accounted for in
the number of small employers and own-account
workers.
- In the remaining rural areas, of the Highlands and
Islands and the South of Scotland,
MEBs are much smaller in number and
more dispersed, although there are still some high
rates of self-employment. There are special issues for
MEBs in rural areas and a small
number of interviews were undertaken by the research
team in the Highlands and Islands. Comments are made on
special issues with this group in later chapters of
this report. The role of
MEBs in the context of rural areas
has been noted, in this section, given that they are
areas that face more acute demographic issues than
other areas, in some cases declining populations and a
steeply ageing population structure.
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