The information gap: is more data needed to support European 'minority' businesses?

Think back to the darkest days of 2020. Covid-19 was sweeping the world, economies were in lockdown and – perhaps most importantly – there was genuine terror generated by a disease that stubbornly refused to respond to the viral anti-treatments.

Hope was restored with the arrival of the first vaccine, brought to market by Pfizer in partnership with a relatively unknown German company known as BioNTech.

As we now know, BioNTech - currently valued at around 41 billion euros - was and is a vaccine research company co-founded by a husband and wife team of Turkish descent. From a certain point of view, it is a European “minority-owned” company that succeeded in changing the world.

And as a new report points out, minority-owned businesses make a significant contribution to the innovation economy in the UK and on the European continent. According to Minority Businesses Matter: Europe published by Open Political Economy Network (OPEN), there are currently six minority-owned tech unicorns in Europe and nine more in the UK.

The report doesn't just focus on unicorns. From restaurants and shops (the traditional if somewhat stereotypical starting points for first-generation migrants) to high-tech companies, such as the aforementioned BioNTech or Oxford Nanopore, the study highlights how companies owned and founded by people from 'minority' backgrounds are not only part of the fabric of Europe's business life, they are also increasingly important economically in terms of contributing to job creation and GDP .

And yet, according to the report, relatively little is known about them. Philippe Legrain is the founder of OPEN and as he explains, European governments tend not to collect information on the ethnicity of business owners. "The UK has a comprehensive register that shows beneficial ownership and you can look at that register and find out who is from 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 investigation, OPEN had to deploy an AI algorithm to identify minority owners.

Specific challenges

So why is it important? Well, OPEN argues that minority businesses face very specific challenges. And without information on the identity of the owners, very little can be done to help them overcome the obstacles that stand in their way.

“Challenges faced by minority-owned businesses include discrimination, disconnection (they are not part of the networks that other business owners can tap into), and self-doubt,” says Legrain.

There is, he admits, another side of the coin. “Minority entrepreneurs often have the will to succeed and the determination to bounce back. They also benefit from being connected to their own networks. Nevertheless, many are overwhelmed by the problems they face,” he adds.

Legrain argues that there is a need to provide support and help these companies overcome persistent discrimination. But what does it look like?

“Politics has a role to play in public procurement,” he says. "Often, minority-owned businesses do not have access to public procurement because the processes are opaque."

As for the private sector, Legrain says progress is being made, particularly as large companies realize the benefits of sourcing from diverse sources as they seek to make their supply chains more resilient .

But that brings us back to the problem of having transparent information about the beneficial ownership of companies. OPEN recommends that all European countries keep a register of beneficial owners including details of ethnicity. In addition, governments should collect data on the ethnicity of residents.

Now, it must be said that not everyone would agree. There are real philosophical problems here. Countries may consider all citizens to be simply citizens and so there is...