Bring your mind back to the darkest days of 2020. Covid-19 swept the world, economies were locked up and – perhaps most importantly – there was real terror caused by a disease that stubbornly refused to respond to existing antiviral treatments.
Hopes were restored with the arrival of the first vaccine, marketed by Pfizer in collaboration with a relatively little-known German company known as BioNTech.
As we now know, BioNTech – currently valued at around €41 billion – was and is a vaccine research company co-founded by a husband-and-wife team of Turkish descent. Viewed from one perspective, it was a European minority owned company that managed to change the world.
And as a new report points out, minority-owned companies make a significant contribution to the innovation economy in both the UK and mainland Europe. According to minority companies are important: Europe published by the Open network for political economy (OPEN) There are currently six minority technology unicorns in Europe and another nine in the UK.
The report doesn’t just focus on unicorns. From restaurants and shops (the traditional, if somewhat stereotypical, premise for first-generation migrants) to high-tech ventures, such as the aforementioned BioNTech or Oxford Nanopore, the study shows how companies owned and founded by people from a ‘minority background’ are not just part of the fabric of European commercial life, they are also becoming increasingly important economically in terms of their contribution to job creation and GDP.
And yet, according to the report points, relatively little is known about it. Philippe Legrain is the founder of OPEN and as he explains, European governments do not tend to collect information about the ethnic background of entrepreneurs. “The UK has a complete register that offers ultimate ownership and you can look in that register to find out who belongs to a minority community,” he says.
However, with the exception of Denmark, this type of information is not readily available elsewhere on the continent. Therefore, to complete this survey, OPEN had to deploy an AI algorithm to identify minority owners.
So why does this matter? Well, OPEN states that minority companies face some very specific challenges. And without information about who the owners are, very little can be done to help them overcome any hurdles that stand in their way.
“The challenges that minority businesses face include discrimination, disconnections — they’re not part of the networks other business owners can tap into — and doubt,” Legrain says.
There is, he admits, another side to the coin. “Entrepreneurs from minority backgrounds often have a drive to succeed and a determination to come back. They also benefit from being connected to their own network. Yet many are overwhelmed by the problems they face,” he adds.
Legrain argues that there is a need to support and help such businesses overcome persistent discrimination. But what does that look like?
“There is a role for public procurement policy,” he says. “Often minority companies cannot access government contracts because the processes are opaque.”
As for the private sector, Legrain says progress is being made, not least because large companies are seeing the benefits of sourcing from multiple sources as they look to make their supply chains more resilient.
But that brings us back to the problem of transparent information about the economic ownership of companies. OPEN recommends that all European countries maintain a register of beneficial owners that includes details of ethnicity. In addition, governments must collect data on the ethnicity of residents.
Now it must be said that not everyone would agree. There are some very real philosophical issues here. Countries may take the position that all citizens are ordinary citizens and therefore there is no need to focus on ethnicity. Indeed, it would be undesirable to do so. A similar argument can be made about recording the ethnicity of owners or drivers.
From its perspective as a think tank committed to promoting commercial and social openness, OPEN believes that information is necessary to counteract discrimination. And as Legrain argues, with data it’s hard to enforce the EU’s Racial Equality Directive.
There is certainly a debate to be had. Meanwhile, it’s worth celebrating the contribution of companies founded and grown by migrants.