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Race Equality Advisory Forum

Enterprise and Lifelong Learning Action Plan

Although it was felt that these topics would best be considered within a single action plan, the differences between them have resulted in the division of the plan into two separate parts: 1 Enterprise and 2 Lifelong Learning.

The contribution of minority ethnic businesses to the Scottish economy

An assessment of the scale and nature of minority ethnic business activity in three areas of Scotland was made by the Working Group (and is described in the Appendix). It is clear from this assessment that minority ethnic businesses are significant employers and generators of wealth in many areas. In addition, it is worth noting that according to research quoted in the Bank of England report on the financing of minority ethnic firms (1999), small businesses run by Asian entrepreneurs are more likely to grow than small businesses in general.

At a time when the Executive and the enterprise network is seeking to promote an enterprise culture and generate more growth-orientated small and medium-sized enterprises (SMEs), this suggests that minority ethnic businesses as a group may have a significant role to play. There are, however, a range of constraining factors which will need to be addressed before the contribution of minority ethnic businesses can be maximised.

Access to support networks and participation in mainstream business organisations

For a mixture of cultural and institutional reasons, minority ethnic businesses may be less likely to access external forms of support which may help them tackle these challenges. When setting up in business, many minority ethnic businesses do not know about the advice which is available to them free of charge, or cannot use this because of language barriers and often, as a consequence, have to pay for advice. There is also a great deal of good practice available through specialist support agencies such as the Ethnic Minority Enterprise Centres. However, mainstream forms of support, advice and assistance are in general not specifically targeted at minority ethnic businesses and, as a result, there is often a very low take up of provision. This can have a range of consequences, among which may be limiting the growth of the business, or not being kept up to date with changes in legislation.

In common with SMEs in general, the vast majority of minority ethnic businesses have little or no contact or involvement with Local Enterprise Companies (LECs), Chambers of Commerce or other business organisations. There is some anecdotal evidence that minority ethnic businesses are even less likely than SMEs in general to join such organisations, although in some cases organisations such as the Aberdeen and Glasgow Chambers of Commerce are working on initiatives to encourage mutual understanding and, hopefully, future participation.

Scottish Executive policy on minority ethnic businesses

The Scottish Executive's policy on SMEs -under which minority ethnic businesses would tend to fall -can be seen to be 'inclusive' in the sense that it does not differentiate minority ethnic businesses from other SMEs. The logic of this is an understandable one: minority ethnic businesses are exposed to the same competitive pressures and market forces within their sectors as any other businesses.

Nevertheless, the working group sees no obvious conflict between continuing the Executive's broad strategy for promoting small business activity while combining this with the kind of sensitivity to minority ethnic businessmen and women which influenced the CRE's response to the Enterprise Network Review Issues Paper published in February 2000. In their response, the CRE argued that minority ethnic-owned businesses had a key role to play in Scotland's economic future, and that it was necessary that an appropriate strategy was developed which would incorporate the needs and contributions of minority ethnic businesses.

Key Issues

Challenges for Minority Ethnic Businesses

It has already been observed that minority ethnic businesses make a significant contribution to the Scottish economy, and that they may be less likely to access external forms of support. There are other factors which are in danger of limiting this contribution. It is also important to note that, as shown in the Appendix, many minority ethnic businesses are small or medium-sized firms in sectors such as retail and catering subject to intense competition, shifting consumer habits, and relatively heavy regulation (e.g. licensing, health and safety, planning permission). We would therefore add our voice to that of the business organisations lobbying the Scottish Executive and the UK Government to reduce regulatory burdens for SMEs wherever possible.

There are also a range of issues which can affect minority ethnic businesses more than other firms:

• Minority ethnic businesses tend not to be engaged to the same extent by the enterprise networks and other informal sources of support, such as local Chambers of Commerce and national business organisations. They therefore run the risk of missing out on some training and management support opportunities, and not addressing the language and cultural barriers which some minority ethnic businesses face;
• There are some areas of skill shortage for minority ethnic businesses (for example, specialist chefs) which are not always readily addressed, in part due to problems with labour supply and in part due to the lack of engagement between minority ethnic businesses generally and support agencies such as LECs or the Employment Service;
• Some minority ethnic businesses may not have access to emerging technologies (even at a most basic level in terms of, for example, office tools or stock control) due to two main factors; firstly that the software and systems tend only to be written (and any training delivered) in English, and secondly, as with other forms of support, these businesses may not be kept up to date with such developments in either a timely or accessible way (or targeted by suppliers of both software and training);
• The issues of diversification and succession-planning are often difficult, compounded by the lack of access to appropriate support from specialist agencies;
• At a more general level, there is insufficient recognition and promotion of minority ethnic businesses as a resource and thus as potential key wealth-creators and contributors to the Scottish economy;
• Minority ethnic businesses are often the targets of racist crimes.

Actions

There are a number of actions which the Working Group consider can be taken in a range of areas. These actions are targeted primarily at the Scottish Executive, but also at the enterprise network (encompassing Scottish Enterprise and Highlands and Islands Enterprise as well as relevant local authority and Scottish Executive departments), representative business organisations and service providers (such as LECs and further and higher education providers).

a) Leadership and clear direction is needed from the Scottish Executive and national organisations

1 This plan to be adopted by the Scottish Executive with specific responsibility for its delivery to be given to a designated Departmental Minister and a named senior official with a specific remit for race equality;

2 Minority ethnic people in business must be seen as a resource for the new economy. Therefore, the development of strategies for the new economy must both involve, and tap into minority ethnic communities and minority ethnic businesses;

3 In moulding its Enterprise and Lifelong Learning strategies, the Scottish Executive must take account of the needs of minority ethnic businesses:

• encouraging them to be innovative and far-sighted organisations;
• encouraging them to have a positive attitude to learning and enterprise;
• ensuring that any strategy for an "inclusive economy" reflects the needs of both indigenous and minority ethnic businesses;

b) Improved research and monitoring of minority ethnic business activity is a priority

1 The Scottish Executive to develop a framework to improve the provision of information to minority ethnic businesses; this to be done in consultation with minority ethnic businesses, advisers and business organisations;

2 The Scottish Executive to institute a programme of research to gather baseline data on the extent and nature of minority ethnic businesses in Scotland, and their contribution to the Scottish economy. The Executive should also ensure that this data is updated on a regular basis;

3 Measures to be put in place to monitor levels of entrepreneurship within minority ethnic communities, including start-up rates, levels of business ownership and of self-employment;

4 The Scottish Executive to continue to support the Future Skills Scotland Unit to ensure that the need for improved labour market information and intelligence relating to race is addressed; this information to be made available in appropriate ways to support the needs of both businesses and individuals in minority ethnic communities;

c) The creation of new networks and structures to help national policy makers and local agencies engage with minority ethnic businesses and communities

1 Business organisations to consider and implement good practice in attracting minority ethnic businesses into membership;

2 The Scottish Executive to support the establishment of a Minority Ethnic Business Advisory Group, consisting of sources of expertise on minority ethnic businesses, encompassing relevant trade associations and Ethnic Minority Enterprise Centres, the academic community and other relevant individuals. This Advisory Group would be a resource which policy makers and agencies would be expected to consult when developing new programmes or assessing the suitability of existing ones. In addition, to ensure that minority ethnic business issues are 'mainstreamed' as far as possible, a minority ethnic business representative should be added to the Minister for Enterprise and Lifelong Learning's Small Business Consultative Group;

3 Continued funding to be made available to support the Ethnic Minority Business Centres, provided that the Centres can demonstrate their impact through appropriate performance indicators;

4 The enterprise network to set up a mechanism to ensure the spread of good practice in initiatives that have been successful with minority ethnic businesses, individuals and communities;

d) Improving accessibility and quality of services available to minority ethnic businesses

1 The Scottish Executive to make an initial investment in the development of tools and a set of common standards (perhaps in the form of a workbook or guide) to facilitate race equality auditing by all providers of services to SMEs;

2 A greater emphasis to be placed on external auditing of the race equality practices of both enterprise agencies and training providers (as well as the Scottish Executive itself);

3 The enterprise network to make its small business services more accessible by minority ethnic businesses through consultation with minority ethnic business organisations and advisers, and through auditing the suitability and effectiveness of existing services;

4 The enterprise network to ensure that new services are equality-proofed at the planning stage;

5 At the earliest practicable date, the enterprise network to audit its communications strategy to ensure that it is effective in ensuring that minority ethnic businesses are aware of the services which may be available to them, and how to access them;

6 At the earliest practicable date, Scottish Executive departments similarly to audit their communications strategy to ensure that essential business information and intelligence (for example in relation to labour market issues, legislation, emerging technologies and access to funding streams) reaches minority ethnic businesses;

e) Other specific programmes for consideration

1 In the light of the Bank of England's 1999 report on financing minority ethnic businesses, the Scottish Executive to look carefully at any findings that emerge from the current research project on this subject supported by the Bank of England and the CRE and which is being co-ordinated in Scotland by Professor David Deakins;

2 If the monitoring of business start-ups among minority ethnic communities recommended above suggests low levels of entrepreneurship, Ministers to issue strategic guidance to the enterprise network on developing a programme of action to support minority ethnic businesses. Such schemes might be modelled on existing programmes for Women into Business;

3 The Scottish Executive to initiate a dialogue with business organisations such as the Institute of Directors, the Confederation of British Industry Scotland, the Scottish Council (Development and Industry), the Chambers of Commerce and the Federation of Small Businesses about how to promote the contribution which minority ethnic business people can make to the boards of Scottish companies, and to ensure that minority ethnic directors of businesses have access to appropriate training regarding their directorial roles and responsibilities;

4 The Scottish Executive to review the provision and accessibility of English language training for minority ethnic business people;

5 The enterprise network to develop the Business Mentoring Scotland scheme as a way of involving minority ethnic businesses in mainstream programmes, through improved marketing and the creation of specialist mentors and support;

6 In addition, the enterprise network to develop support to assist with diversification and succession planning;

7 The enterprise network, in conjunction with both representative organisations and the Employment Service in Scotland, to identify and address the issues of skill shortage faced by minority ethnic businesses in Scotland;

8 In conjunction with community safety and law enforcement organisations, the Scottish Executive to ensure that minority ethnic businesses can operate without being subject to racially motivated crimes, including damage to property and harassment of staff.

Key Issues

Barriers to participation in learning and employment

As with barriers facing businesses, all groups, regardless of race, experience some barriers to learning. However, there is anecdotal evidence to suggest the presence, and in some cases, prevalence of a range of additional problems facing people from minority ethnic communities within the labour market in terms of accessing and benefiting from lifelong learning.

Among the additional barriers facing individuals from minority ethnic communities in relation to lifelong learning:

• There are still examples of inappropriate provision by service providers which do not meet the needs of minority ethnic service users;
• There is anecdotal evidence that careers guidance information may not be reaching people from minority ethnic communities, who need, therefore, to rely on informal sources;
• Language is a crucial barrier to participation in lifelong learning, and budgets are not always made available for this;
• Lifelong learning is often geared to mainstream employment (for example in terms of times and modes of study, fees and supporting costs and the need for work-based placements) and this may not always be an appropriate model for individuals working in minority ethnic businesses, given the small size and the patterns of working hours and practices of many of these businesses;
• There is anecdotal evidence that people from minority ethnic communities in employment do not always find it easy to secure training opportunities appropriate to their skills and aspirations;
• There is a low level of participation by people from minority ethnic communities in state-funded vocational programmes (for both young people and adults) and anecdotal evidence suggests lower levels of take up of programmes generally. In many cases, lifelong learning opportunities are linked to participation in, for example, Skillseekers or Training for Work (although it is acknowledged that the Employment Service has developed a specific strand of the New Deal for minority ethnic communities).

There are also a range of issues which arise in relation to the needs of specific groups within minority ethnic communities:

• There are specific groups within the broader minority ethnic population who face additional problems, for example in terms of a long history of unemployment, or only casual employment, alongside a lack of formal qualifications and language issues. That said, there are many individuals within minority ethnic communities in areas of deprivation who, with appropriate support, would progress very rapidly through the labour market;
• For people living in areas experiencing deprivation, although many of the same factors apply to minority ethnic communities as with the majority population, some issues may again be magnified by cultural and language issues, for example, in terms of the difficulties in accessing appropriate services or transportation issues;
• For those seeking skills within, or prior to entering the labour market, providers (and businesses) are not always aware of specific cultural and language issues which arise, for example, for Muslim women;
• Some groups of women need additional encouragement and an appropriate setting to gain access to skills training and so enter the labour market. The employment rate among some groups of women from minority ethnic communities is very low, and many will not, therefore, have a work history, skills or experience relevant to the current labour market;
• Many younger women from minority ethnic communities are well qualified, but face double discrimination in the labour market, preventing them from achieving employment at a level appropriate to their qualifications;
• The situation facing spouses of minority ethnic students seeking to gain employment is often very difficult.

There are also wider structural issues in relation to macro economic policy which impact on the effectiveness of lifelong learning. Among these issues are:

• Anecdotal evidence suggests that there are still many cases of illegal discrimination in the Scottish labour market which affect the opportunities available to virtually all people from minority ethnic communities;
• The changing nature of skills needs of the labour market in the face of both global competition and technological development poses a threat to many people from minority ethnic communities who are not currently participating in the labour market, or undertaking any learning, as, in effect, the gap between their existing skills and those required by businesses may widen further, placing them at even greater disadvantage in securing employment;
• The current drive by the government to "import" skilled workers poses some issues if not addressed in a comprehensive manner. Minority ethnic workers coming to Scotland may have considerable skills in, for example, IT, but may not have similar levels of the specific language skills needed in this sector. The consequence of this could be that these in-coming workers may ultimately fail to progress in the labour market and themselves become excluded through time, despite the technical skills which they have.

Actions

As in the case of enterprise, there are a number of actions which the Working Group consider can be taken in a range of areas. These actions are targeted primarily at the Scottish Executive, but also at the enterprise network (encompassing Scottish Enterprise and Highlands and Islands Enterprise as well as relevant local authority and Scottish Executive departments), and service providers (such as LECs and further and higher education providers). These include:

a) Leadership and clear direction from the Executive and national organisations

1 The Scottish Executive to ensure that its Enterprise and Lifelong Learning strategies are sensitive to the needs of diverse entrepreneurs and enterprises in Scotland, and robust and inclusive in their implementation, and that they effectively address the challenges facing minority ethnic communities in the labour market;

2 The Scottish Executive to target and eradicate illegal racism in selection and recruitment practices in businesses of all kinds, with a considerable increase in the resources applied to ensuring compliance with existing and forthcoming legislation in this area;

3 The Scottish Executive to assess the need for, and, if necessary, develop further national campaigns targeted at both businesses and individuals to promote the positive benefits of diversity within work;

b) Improved research and monitoring of minority ethnic learning and employment

1 Support to be given to the emerging framework for labour market intelligence at a national level through the Future Skills Scotland Unit to ensure that the need for improved labour market information and intelligence relating to race is addressed; this information to be made available in appropriate ways to support the needs of both businesses and individuals in ethnic minority communities (cf. Enterprise Recommendation b 4 above);

2 This improved intelligence to underpin the delivery of a careers and guidance system which is responsive to the needs of minority ethnic communities, in part by considering more closely role model portrayal, cultural sensitivities and accessibility;

3 A system of monitoring to be introduced which allows for the disaggregation of data of minority ethnic students leaving college and university in Scotland;

c) Other specific programmes for consideration

1 The Executive to encourage providers and businesses to undertake more innovative work to promote lifelong learning to groups among whom take up is currently very low;

2 The Executive to develop and implement, as a matter of urgency, specific strategies for engaging and involving in the labour market minority ethnic people and communities in poorer areas, and women who are presently outside the labour market or in jobs below their abilities;

3 Providers of advice and guidance on employment and learning issues, including the Scottish University for Industry (SUfI) and learndirect scotland, to ensure that this advice and guidance is available in languages other than English;

4 In addition, SUfI to be directed by Ministers to pay particular attention to the need to reach minority ethnic communities and to include in its annual report an assessment of its success in this regard;

5 The Scottish Executive to examine the real and perceived barriers to the take up of national programmes (for example in Skillseekers and Training for Work) and to address them, learning from the experience of the New Deal.

Appendix: Summary Results of Assessment

An assessment of the scale and nature of minority ethnic business activity was undertaken by the working group to inform the development of this action plan. Though bearing a Scotland-wide focus, the scope of the survey was primarily minority ethnic businesses in Glasgow, Edinburgh and Aberdeen. The reason for this was simply that these are the areas with which the working group members were familiar. As regards minority ethnic representation, the focus of the assessment was primarily on businesses which are predominantly owned and operated by people of South Asian and South-East Asian backgrounds.

South Asian Business Sectors

The South Asian minority ethnic businesses surveyed can be divided into five main sectors. These comprise hotel and leisure, wholesale/cash and carry, convenience stores and corner-shops, nursing homes and property investment. Most of the businesses referred to in these sectors are primarily, though not exclusively, based in Glasgow and Edinburgh and to a lesser extent, Aberdeen.

Hotel and Leisure

Minority ethnic communities have diversified over the last ten years into the hotel and leisure industry. The working group's investigation revealed that there are now some key players who own between 4 and 5 hotels each. However, there is no established research to identify the actual size of this industry or the number of people involved in terms of ownership or employees.

The Asian food industry has blossomed in the UK over the last five years or so, resulting in almost 450 outlets of Asian restaurants and takeaways across Scotland, employing ten people each on average. Among these are some larger outlets which employ more than 100 people.

Cash and Carry

This is a well-established industry, especially in Glasgow. The service it provides is wide-ranging and comprises the rag trade, household goods etc. Again, there is no established research to establish exact figures, but the working group estimates that there are probably 300 businesses involved, employing between 30 and 50 people each.

Convenience Stores and Corner Shops

This is one of the few Asian industries on which various research projects have been carried out. However, much of this research is primarily related to Glasgow and Edinburgh. There appears not to be any Scotland-wide study of the industry.

Minority ethnic community involvement in this sector is quite considerable. For example in Edinburgh alone there are 340 independent grocery stores largely owned and operated by people of South Asian origin.

Nursing Homes

Asian people have diversified into this industry but there are no established figures as to their strength in this sector. However, there are at least four key players who own about 20 nursing homes between them. Again, data on the number of employees is unavailable, but it is estimated that each nursing home employs about 40 staff, mostly on a part-time basis.

Property

Again, there is no proper data available to establish the extent of minority ethnic involvement in this sector. However, there is reliable anecdotal evidence to suggest an increase in minority ethnic investment in this industry.

South-East Asian Businesses

The South-East Asian businesses surveyed were primarily Chinese-owned and based in the Aberdeen and Aberdeenshire/Grampian area. In Aberdeen and the surrounding area, the survey showed that there were at least 30 restaurants, 75 takeaways, and one cash and carry operating.

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