A hodge-podge of cultures, religions and ethnicities, London is one of the most diverse and cosmopolitan cities on earth. It has long held a reputation as one of the globe’s foremost finance and business centres and is fast gaining credit as a hub of entrepreneurial excellence. This goes some way to explaining why multitudes of talented people are coming to live on these fair shores.
With nearly half a million migrants from 155 countries living in the UK, some overlook the benefits of a dynamic and international ecosystem and instead focus their attentions’ on making Blighty’s new inhabitants feel unwelcome – the recent pandemonium over Romanians and Bulgarians flocking to the UK is a case in point.
Popular and usually unfounded perceptions about immigrants have included their coming to Britain to take jobs and depress wages. However, a recent study by the Centre for Entrepreneurs (CFE), the entrepreneurs’ think tank and DueDil, the online companies database, seemed to shatter these perceptions, presenting a wholly different picture of reality.
“The aim was to bring hard data to what is a very emotive topic of debate around immigration,” says Matt Smith, director of the CFE. “The entrepreneurial value of migrants and their role as entrepreneurs as job and wealth creators has simply not been part of any immigration discussion in the past.”
The CFE research probed the job-creating capabilities of migrants and found that one in seven businesses in the UK are started by people who hail from outside the country, corresponding to 14% of jobs. “Among the business community, there is an understanding that migrants are often very productive people,” comments Matthew Rock, editor-in-chief at Duedil. “I think what happens though, in the public realm of popular newspaper and news agenda on radio and TV, is that something changes and much more suspicion and doubt enters into the argument.”
Another absent truth which the institutions sought to bring to the ongoing immigration debate is that entrepreneurial activity among the migrant community is nearly double that of UK-born individuals with 17.2% of migrants having launched their own businesses, compared to 10.4% of those born here. These are people who have maybe come to the UK as asylum seekers, refugees, or as children and have grown up in Britain.
Tobi Schneidler, founder and CEO of Bouncepad, the tablet kiosk provider, came to London from Germany in 1993 to study architecture. Nearly 20 years on, he runs a company which sells tech for public spaces with 25 employees. “There’s something that my French and German friends and people from all over the place find in London that they don’t find at home,” he says. “It’s to do with the opportunities, the people that you meet, access to academic institutions and the whole business spirit of the country. There might be complaints from entrepreneurs around regulations, but in terms of starting up a new company Britain definitely has the edge.”
Smith agrees. “We have a stable rule of law, an economy that’s recovering and growing, compared to many other countries, and we have access to a very large European market and sit rather perfectly between the US and Europe and the east,” he says.
Moving to a new country is a giant enough step but setting up a business is a whole other kettle of fish. “It takes real entrepreneurial zeal to do that,” says Smith. “But I think once they’re in Britain, they would face very similar challenges to any other British-based business or entrepreneur.”
For entrepreneurs, understanding a new culture, the market, the support structures, as well as the customer base and institutions – already enough of an undertaking for native starters – can pose significant challenges for migrant entrepreneurs who are without easy access to the networks that are vital when it comes to starting a business.
There are other teething troubles, too. “The challenges London poses are around costs, access to space and access to people,” says Schneidler. However, he sees the latter as an opportunity. “Very clever people are drawn to London. So I actually see that as an asset of being in this great place,” he says. “We have a mix of people from Germany, Mexico, Romania, Belgium and of course British people. It’s a great asset to developing companies to actually have people with different points of views chipping in their ideas and introducing language skills, whilst helping to connect to other countries and cultures.”
Getting an entrée into established networks can prove challenging and while many will acquiesce that it could be better, there’s pretty decent support for SMEs in the UK.
The CFE report also commissioned research from the University of Birmingham, which raised the point that some migrant businesses or entrepreneurs may not be engaging in business support initiatives as much as British entrepreneurs.
Smith provides an explanation as to why this might be the case. “I wouldn’t say it’s any form of discrimination but there is more that can be done to address cultural barriers and any other barriers that are holding back migrant entrepreneurs from engaging with the support that’s available,” he says. “The government should review access to business support and resources to make sure that migrants are getting all the support that is available to the wider business community.”
The motive of the migrant entrepreneur is changing quite significantly too. Whilst in the past, many people who settled here became almost ‘accidental’ entrepreneurs as they set up shop, many moves are now much more targeted, owing to Blighty’s stellar entrepreneurial credentials. “Many of those established at the moment didn’t come as entrepreneurs; they came as refugees and happened to start a business,” says Smith. “Now, we’re attracting entrepreneurs who move here from Europe or want to take the entrepreneur’s visa with the explicit aim of launching a business.”
Therefore, the task of the government and other organisations is to positively encourage migrant entrepreneurs to start and grow business. “I think that as a country, we’ve got to figure out what our new edge in the world economy is and we need to become more enterprising,” says Rock. “The big companies and big employers of the past are breaking down. They won’t provide as many jobs in the future as they have done in the past.”
It’s clear that the importance of offering support to SMEs is on the political agenda – the PM declared in his closing speech at the Conservative party conference last October that entrepreneurs are the future of the UK economy. “As the report shows, migrants are highly productive and entrepreneurial, in terms of creating new businesses and running small businesses,” says Rock. “As a country we’ve got to take that seriously and focus on that community because we will need that hard work and their endeavour and those companies, if we’re gonna thrive and survive in a very global market.”
Home and away
Tobi Schneidler, CEO, Bouncepad
“Bouncepad was set up just over three years ago but it started life before that as a design agency. From working with clients such as Barclays and Adidas, we came across this opportunity to design the B2B product for secure tablet kiosks.
“When we launched the website in January 2011, a week later we got the first phone call not from Oxfordshire or Birmingham, but from Johannesburg. So we’ve been an export business from day one and it has continued like that.
“And we’ve opened a Boston office as well, not least because one of our great British guys is married to an American who came to study here and her company introduced us to a great company in Boston.
“I don’t think all of that dynamic would have unfolded in Berlin, Munich or Stuttgart. German companies are masters at exporting and being successful internationally but Bouncepad has benefitted from a very innovative and design-focused customer base in the UK.”