There are some statistics that make you stop in your tracks. This should be one.
Despite investing more time and more money into starting a business and having higher levels of education, black entrepreneurs have consistently worse outcomes than their white counterparts.
Whether you look at turnover, profit, or meeting their business aspirations, black entrepreneurs experience less success.
This stark fact is uncovered in the new report entitled Alone Together: Entrepreneurship and Diversity in the UK, published today by the British Business Bank and Oliver Wyman.
For women the picture is even worse. Female business owners from black, Asian, and other ethnic minority backgrounds experience the lowest levels of business success.
Clearly, there is something critically wrong with the way society treats its ethnic minority talent.
Make no mistake, this is an issue that affects us all. If Britain wants to maintain its position as a global powerhouse economy, it must embrace the talent and innovation of everyone. There should be equal access to opportunity and social mobility.
Every black entrepreneur knows that racism exists in business just as much as it does in the rest of society. I’ve experienced it myself.
I remember hanging up my coat at a high-profile entrepreneurship awards ceremony where I was a finalist. Before I’d left the cloakroom two other attendees had handed me their coats assuming that’s what I was there for.
On other occasions I have been sat in meetings with possible suppliers or potential customers who are busy checking their phones or chatting before I’d ask: “Shall we start?”. They would reply: “We’re waiting for Piers.” They just didn’t expect Piers to look like me.
Such micro racial aggressions are a constant and, over time, they can wear down those with less resilience. But they alone do not explain why black business owners and those from Asian and other ethnic minority backgrounds face such persistent disparities in business outcomes.
There are other factors at play — not least the fact that minority entrepreneurs start from a lower socio-economic place in the system. They have a longer journey to take.
I am mixed-race, I was from a mill town comprehensive school, I failed my 11+ and had to resit my A-levels — but I was bloody-minded. When I was looking for a job in law in the City, I applied 68 times for a training contract before one firm decided to give me a shot and provide me with the opportunity to qualify.
It was only once I had been accepted at the law firm that I experienced the equality of opportunity that many white people enjoy at the very start of their careers.
It gave me the platform to move into investment banking, which meant that when the time came to become an entrepreneur, I had the social capital, networks, skills and confidence I needed to raise funds, learn, and make mistakes. When things didn’t work out, I also had the financial capital to try again. So many other black people do not have the opportunity to build social capital or access financial support if things go wrong.
I have seen first-hand the difference that even a small amount of support can make.
When I featured on the Channel 4 show the Secret Millionaire, I met Daniel.
Daniel was a charismatic and very intelligent young black man, but partly as a result of where he was born, he struggled to find work and made a series of poor life decisions that resulted in him being imprisoned. All he needed was access to opportunity, experience, and some guidance.
After serving his sentence, with the help I gave him he was able to train in customer tech support in my business, and has now become an IT consultant.
My support gave him the start he needed, pushing him up the socio-economic system. He did the rest himself.
Now, Daniel is able to stand on his own two feet — so much so that, when I had to make his team redundant, he was able to pick himself up and become a freelance IT consultant. I expect him to start his own business one day.
Lack of this kind of social capital is the biggest invisible obstacle holding back ethnic minority entrepreneurs. Potential entrepreneurs from black backgrounds need visible role models in their communities, success stories that breed confidence.
Access to finance is also obviously key. Just look at the impact schemes like Start Up Loans from the British Business Bank can have in under-represented communities — one in five of their loans go to people from black, Asian and other ethnic minority backgrounds.
Of course, the government can and must do more. The British Business Bank’s Alone Together report will feed into the Commission on Race and Ethnic Disparities, established by the Prime Minister, which will hopefully drive further progress at a national level.
But business has a role to play.
Businesses of all shapes and sizes need to work harder to access under-represented talent. The investment community needs to do the same, and not expect founders of colour to know how to approach them, or even that they exist at all. Too many are using the same lazy old networks, only hiring or investing in people who look like them or share a similar life experience.
For those worried about protecting what they have, let me stress that this is not a zero-sum game. We are leaving billions on the table by not dealing with the unacceptable outcomes highlighted in the Alone Together report.
Now is the time to have this conversation in the open, and to draw a line in the sand and change.
Britain’s economic recovery from Covid-19 and our global significance post EU exit must be driven by the talent and entrepreneurship of its people, whatever their skin colour.
Main image credit: @nicholahedger