Britain is in debt to a new generation of foreign entrepreneurs

 
Allister Heath

IMMIGRANTS are good for jobs. Yes, you’ve read that right: even though much of the public believes that migrants depress the labour market, the truth is that foreign entrepreneurs are actually responsible for a great number of British jobs. Without these migrants, there would actually be fewer opportunities for locals and far fewer start-ups – that is the remarkable conclusion from a report today from the Centre for Entrepreneurs and DueDil.

The figures – sourced from Companies House – are striking: 456,073 foreign entrepreneurs now live in the UK, defined as founders or co-founders – first directors – of active UK companies, excluding company secretaries and sole traders. There are 464,527 active UK firms with foreign nationals as founders or co-founders.

Around 2.64m foreign nationals currently work in the UK; this suggests that 17.2 per cent of them have launched their own business, compared to 10.4 per cent of UK nationals in employment. It gets better: with a total of 3,194,981 active UK companies, migrant entrepreneurs are therefore behind 14.5 per cent of the total, or 1 in 7 of all UK companies.

This is an astonishing number and confirms that migrants create vast numbers of jobs for themselves and for other UK residents.

This is especially pronounced for companies with a turnover that ranges between £1m and £200m per year: such migrant-founded companies that report employee numbers to Companies House employ 1.16m people. This accounts for 14 per cent of jobs in that segment of the economy. It is clear that there would be far fewer jobs in the UK economy – including for Brits – had these migrants remained in their country of origin, or gone to work instead for established employers.

London benefits disproportionately, with 220,637 businesses run by foreign nationals, more than 21 times that in Birmingham, the second most popular location with 19,000. Once again, migrants are a strength, not a weakness; they help to explain why London is doing so well in terms of productivity, GDP growth, wages and employment growth. The average age of a foreign entrepreneur is 44.3, against 52.1 for British entrepreneurs.

No fewer than 155 nationalities are represented among migrant entrepreneurs in the UK; the most numerous are Irish citizens, followed by Indians, Germans, Americans, Chinese, Polish, French, Italians, Pakistanis and Nigerians. In the case of the French, where many of the entrepreneurs who have moved here are tax exiles or individuals who are sick and tired of the political climate in their home country, these are often businesses that would otherwise have been set up abroad.

It is worth highlighting, in the context of the recent row over letting in more migrants from Eastern Europe, that the DueDil study also discovered that Britain is now home to 8,798 Bulgarian entrepreneurs responsible for 8,398 UK companies and 10,931 Romanian entrepreneurs responsible for 10,693 companies.

In fact, the real story is even stronger than this data suggests. All the figures are based on companies where founder directors classify themselves as non-British. The analysis thus focuses exclusively on foreign nationals and does not include immigrants who have taken British citizenship since moving to the UK. This means that the actual numbers of entrepreneurs and companies founded by migrants born overseas is bound to be even higher than indicated in the report.

Bearing this important caveat in mind, the DueDil report’s findings support those of the Global Entrepreneurship Monitor UK report, which calculated that 16 per cent of first generation migrants to the UK set up their own firms, compared with just 9 per cent among the UK born.

The evidence is there for all to see. Immigrants don’t take jobs – they create them in vast quantities.

allister.heath@cityam.com
Follow me on Twitter: @allisterheath