Summary of Udiex Alep workshop on enterprise development Amsterdam and Rotterdam 2004
The workshop on Enterprise Development shared ways of assisting targeted groups to develop their own businesses/social enterprises. It was held in Amsterdam and Rotterdam from 25 to 28 November 2004
Erol Poyraz, from Cross notions Business Consulting Agency prepared the orientation paper: 'Minorities in Europe' and the Workshop report: 'enterprise development for socially discarded groups' as well as the case study report on which the case studies listed below are based.
The workshop concentrated on enterprise development and self-employment amongst ethnic minorities and women. As well as looking at issues around entrepreneurship and self-employment the workshop also explored the role that regeneration can play in improving the local economy and the role that entrepreneurs from ethnic minorities and among women can play in revitalising these zones. In this way it can be seen that supporting enterprise among women and ethnic minorities can become a virtuous circle that benefits society as a whole and disadvantaged areas in particular.
This workshop aims to help have more insight in how to assist minority groups and women in entrepreneurship by understanding the problems they face and finding solutions for these problems. Some of the problems faced include difficulties accessing finance, lack of appropriate business support, the need to help entrepreneurs to break out of overcrowded markets (for example retail and restaurants for ethnic minorities and beauty industries for women).
Europe has encountered several waves of immigration due to its colonial history and the emergence of migrant workers. Minority groups face stereotyping and discrimination when trying to enter the labour market. These problems can include lack of recognition of qualifications and experience, that often results in recently arrived ethnic minorities being trapped in low waged insecure manual work. It is often said that migrants drop two social classes when they go to another country. As a result there is an advantage for some ethnic minorities to become entrepreneurs and although the results are quite varied there are many examples of minority groups having higher levels of entrepreneurial activity than the host community.
Despite these tendencies it is important to recognise the diversity of ethnic minorities. Some came to Europe with highly developed entrepreneurial cultures. East African Asians are a good example of such a group. Others came from more impoverished rural farming backgrounds and had no experience in commerce or manufacture. As well as the huge differences that exist between ethnic groups there are also great differences within groups - particularly as a result of gender differences but also arising from class and caste distinctions. Thus significant numbers of African Caribbean women in the UK have become successful entrepreneurs, but relatively few of the men have succeeded despite having high levels of aspiration.
For a range of reasons ethnic minority groups often live in the poorest parts of Europe's cities - inner cities in some Member States (e.g. UK,Belgium, Germany) and the suburbs in others like France, Italy and Portugal. These areas also suffer from poor housing conditions - often the reason why they became available to ethnic minority newcomers in the first place.
Ethnic minority communities may also agglomerate for positive reasons - because an area is able to support specialist shops and religious facilities serving the community, but also for reasons of fear and the difficulty of breaking into previously white only housing areas where racist attacks may be common.
Ethnic minority enterprise often follows these location patterns although there are some sectors such as food and convenience stores where ethnic entrepreneurs operate outside the concentrations. Ethnic enterprise therefore offers an opportunity to benefit some of the poorest and most disadvantaged places because supporting these enterprises can bring wealth to the areas and generate employment. The INNER CITY 100 is a good example of how dynamic business can be found in the most surprising locations, in fact this project set out to prove that this was the case. In time many of these areas go through a regeneration cycle and become the new cool haunts of the gentrifying middle classes, which can bring new benefits to the businesses.
Enterprise Case Studies[]
FAILTE FEIRSTE THIAR (WELCOME TO BELFAST) West Belfast is one of the poorest neighbourhoods in Northern Ireland. The West Belfast Partnership Board aims to: "Involve everyone who lives and works in West Belfast in generating economic, social, physical and cultural development in an accountable and inclusive manner and to ensure West Belfast makes a full contribution to and benefits equitably from developments in the city as a whole". They are working on a set of tourism products in the community that range from community based tourism activities to enlarging the supply of bed and breakfast accommodation.
Project for female entrepreneurs of the 21st century-Bilbao
The objective of the Bilbao project is to promote an enterprise culture amongst the women in Bilbao and to provide them with the necessary tools to facilitate their (re)entry in the labour market by means of self-employment. The project works through a set of stages from the business idea, business planning, setting up new businesses and support for the consolidation of new businesses.
ALA KONDRE - Rotterdam Ala Kondre means all countries in Surinamese. It is the name that has been given to an area of ethnic retailing in Rotterdam. The aim of the project is to change the image of a multicultural shopping street into something unique: a place where a considerable diverse offer in multicultural products and services are offered and which at the same time functions as a meeting point for different cultures in the city.
FRONTIERS II COACHING PROJECT- Rotterdam The Frontiers Coaching Project aims to reach successful ethnic entrepreneurs and help them to break through to national markets. The project also assist native (i.e. from the host community) entrepreneurs in their quest to be able to service ethnic consumers. This is done in a timeframe of a year. The project tries not to focus on bottlenecks, but on market development. The service package for new enterprises mainly focuses on creating a clear view of the supply, obtaining corporate skills and establishing a business networks. More experienced companies are offered a service package concentrating on the corporate strategy, managerial skills and working agreements
INNER CITY 100 (UK) Inner City 100 is a campaign that aims to show that inner cities can be competitive areas for doing business by uncovering and highlighting fast growth inner city businesses. The project produced an annual index, which was published in the financial times, and an award ceremony was held. The high profile work was backed by Chancellor Gordon Brown and underpinned by a research programme on competitiveness in the inner city. It was run by independent think tank the New Economics Foundation.
REGENERATION AND SOCIAL ENTERPRISES IN NOTTINGHAM The project aims to encourage and support Social Enterprises* by providing knowledge-based information, promotional services and network facilities to achieve self-sustainability. Nottingham identifies social enterprises by their social activity. These include recruitment practices targeted at people who are disadvantaged in the labour market, training of staff and beneficiaries to prepare them for employment and trading in services that directly contribute to community regeneration.
The Social Enterprise Unit of the Department of Trade and Industry (DTI) defines a social enterprise as: "A business with primarily social objectives whose surpluses are principally reinvested for that purpose in the business or in the community, rather than being driven by the need to maximise profit for shareholders and owners"
TELECEM NETWORK Poitiers France The Transnational Network of Tele-centres for those that are physically, mentally or socially disadvantaged currently operates in four regions in Europe (Castilla-Leon in Spain, Region North of Portugal and Bath, Somerset and Greater Manchester in the UK). This pilot project serves to implement a new model of distribution of new communication technologies adapted to the specific needs of these groups. The project is focusing on training in the use of new technologies and encouraging and enlarging the possibilities in employment and self-employment.
MENTORRAAD- Rotterdam This is a mentoring project for enterprise start-ups. The main objective is to transfer know how and experience by established entrepreneurs or people in the middle or higher management in business (mentors) to starting entrepreneurs (mentees). A sub objective of the project is to build, maintain and expand entrepreneurial networks in municipalities. The project has a sophisticated matchmaking process for the mentor and mentee
Proyecto Clavel (Carnation Project) Sevilla The Carnation Project in Sevilla was part of a wider programme that sought to improve quality of life for people in disadvantaged areas through economic development. The carnation project itself had four phases and is focussed on the Romany population. It sought to find ways to legalise one form of work - flower selling. People especially women who are often the main family breadwinner wanted to sell in peace. The project worked through four phases: acquaintance and understanding, investigation, cooperation and consensus and implementation of sales.
Conclusions[]
Enterprise is an attractive option for ethnic minorities and for women because the labour market offers limited opportunities for them. Entrepreneurship and particularly self- employment can therefore represent an important alternative. Strengthening entrepreneurship in this way can also have the effect of improving the economic structure and dynamism of disadvantaged areas. However, enterprise is not a solution for all people and will probably at the maximum offer opportunities for only around one in ten of the population. For the rest other solutions are needed.
General conclusions from the workshop are as follows:
The distinction between necessity and opportunity enterprise development. Necessity enterprises are those that arise because of unemployment or worklessness and although some survive have a high failure rate. Opportunity enterprises arise because someone spots the chance to fill a market niche. In many cases market demand creates opportunities for ethnic entrepreneurs.
Misconceptions and stereotyping is not only a problem for ethnic minorities. Factors such as age, gender etc. can also lead to a certain kind of prejudice and many groups do not receive the support they need because they are not treated seriously by business support professionals, banks and other agencies.
Ethnic entrepreneurs tend to copy success in certain sectors where barriers are low (e.g. retail and restaurants). The formation of such local clusters can lead to high failure rates because of intense competition - for example among take- away restaurants.
For many ethnic entrepreneurs respect in their communities is more important that generating turnover. This can make it hard for external agencies to stimulate growth among these businesses. Role models can help to raise the level of ambition.
Services offered to encourage enterprise development should try to avoid the "one size fits all approach". Not all minorities and people from different nationalities can be approached in the same way. Services need to be adapted to the target groups.
Banks giving out loans may be reluctant to lend money to minority groups; therefore ethnic entrepreneurs tend to find financial aid within their own family and friendship networks. Financing possibilities need to be looked into more. Micro credit and/or revolving funds continue to have a level of risk and are very small scale. Financial support for entrepreneurs does not necessarily stimulate companies to start up.
Service points need to be accessible to the target group. Outreach is also likely to be critical for hard-to-reach groups - innovative methods have been tried and have succeeded.
The existence of an underground economy can be built upon to create a positive contribution to the local economy. In such cases it is important to look at the social impact as much as the economic impact. Diversity in urban markets offers a great potential for the local economy and self-employment. Social enterprises can help boost the economic development of deprived areas.
Stimulation of certain economic sectors can prove to be fruitful. By making the most out of entrepreneurship and employment in these sectors, development and regeneration of underprivileged areas can be accomplished.
It pays to invest in women in self-employment and entrepreneurship as the return is on the whole higher and the capital investment is lower. There has been widespread experimentation in aspects of 'inclusive enterprise' in certain Member States. The UK's Phoenix Fund focused on enterprise for disadvantaged areas and under-represented groups (e.g. women, ethnic minorities and people with disabilities) by financing both business support projects community development finance institutions over a five-year programme. Three important findings from the evaluation of the Phoenix fund were that specialist projects were needed to reach specific groups and that projects focused on reaching the excluded had only small economic impact on disadvantaged neighbourhoods. The converse was also true; projects that focused on growing the economy in disadvantaged areas had only modest effects on combating exclusion. Finally the most successful projects were delivering a more holistic form of support than traditional business agencies often described as developmental.
The Equal Programme had thematic strands on business creation and Social Economy and has led to considerable innovation and sharing of best practice through its Equal Thematic Groups Business Creation and the Social Economy.
Recommendations for EU, National, and Regional/local authorities[]
Enterprise is an important route out of exclusion that should be supported by Member States and by Regional authorities with more coherent support structures that understand and relate successfully to the diverse market of potential entrepreneurs.
Mainstream services need to be complemented with specialist provision that focuses on disadvantaged areas and on specific groups such as ethnic minorities and women.
More needs to be done to help entrepreneurs to overcome financial barriers to enterprise for example through supporting micro credit schemes targeted at women and ethnic minorities.
Government at all levels should recognise that enterprise based solutions are a critically important component of urban regeneration programmes and build these into area based renewal programmes.
More exchange of experience is needed between cities on enterprise projects to find out what works in different settings Workshop documents: Checklist
==ECO-FIN-NET== - Leipzig
Econ Fin-net is a project focusing on access to finance for micro businesses and SMEs in Leipzig. The project has analysed the barriers to accessing finance (high risk, low return, high transaction costs and lack of information on both sides). Eco-fin-net focuses on finding instruments for supporting SMEs (credit, loans, venture capital); supporting measures and accompanying measures e.g. networks between SMEs.