The Government will encourage more black people to start up in business to narrow the gap between African-Caribbean start-ups and new Asian businesses, Small Firms Minister Nigel Griffiths said today. Addressing top ethnic entrepreneurs at a conference in London, Mr Griffiths said the Government wanted to boost ethnic minority start-ups across the board, but that narrowing the gap between black and Asian business start-ups was a key priority, especially since Asian entrepreneurs outperform non-Asians.

Only 7 per cent of people of African-Caribbean origin are self-employed - compared with 21 per cent of Indian people and 22 per cent of Pakistani or Bangladeshi origin.

Mr Griffiths outlined a package of measures to boost ethnic enterprise, including:

• producing a starter pack for new businesses;
• introducing a 'start-ups action plan' - to include a focus on boosting black and ethnic business start-ups;
• ensuring banks provide information on the number of loans granted to ethnic minority businesses compared with those given to non-ethnic businesses; and
• making sure each Business Link focuses on encouraging different ethnic minority businesses.

Mr Griffiths said:"Ethnic minority businesses are among the most entrepreneurial in society. There are a quarter of a million ethnic minority enterprises in the UK, contributing £13bn a year to the British economy. In general terms, ethnic entrepreneurs outperform non-ethnic businesses. Ethnic minorities account for 5 per cent of the population but 9 per cent of start-ups. But start-ups by black people are below average. I am determined to ensure that where ethnic minorities face additional barriers to starting up they are removed. This package of support aims to do just that."

Mr Griffiths also said the Government was committed to retaining ethnic minority representation across the range of advisory boards, including the Small Business Council (SBC) - the advisory body to the Government on small business issues.

"The SBC plays a key role in advising the Government on how it can help small businesses. We are recruiting new members to the SBC and I welcome applications from more ethnic entrepreneurs."

In his speech, Mr Griffiths also highlighted work by some Business Link Organisations to boost support for ethnic businesses:

• Business Link London North West has developed a centre of expertise for ethnic minority businesses;
• Business Link Birmingham has forged strategic alliances with 3b (Black Business in Birmingham) and the Institute of Asian Businesses to better meet the needs of ethnic minority businesses;
• Business Link Leicestershire and the Caribbean Unit of British Trade International have collaborated with Leicester African-Caribbean Business Association; and
• Business Link Hertfordshire supports the Hertfordshire Ethnic Minority Business Network.

Mr Griffiths added, "Enterprise should mean opportunity for all.By developing support for potential ethnic entrepreneurs we will encourage more diversity, which can only be positive for the economy."

A report published in September 2002 by the British Bankers' Association, sponsored by the DTI, found that African-Caribbean entrepreneurs often faced problems raising bank finance. The BBA report found that 21 per cent of black-run businesses secured start-up finance against 34 per cent of those owned by whites.

Other Government work to encourage more ethnic minority start-ups includes:

• Working with the Ethnic Minority Business Forum to improve the support for ethnic entrepreneurs.
• Providing support through the £96m Phoenix Fund, a scheme that promotes innovative ways of supporting enterprise in disadvantaged communities and in groups who are under-represented in business ownership, to support ethnic enterprise. Part of the fund is providing support to 11 organisations that are specifically focused on providing loans to entrepreneurs from ethnic minorities.
• Ensuring one third of mentors within the Business Volunteer Mentoring Association - a core of volunteers providing advice aimed at pre and early start-up businesses - are recruited from the ethnic minority community.
• The Ethnic Minority Business Forum exists to advise Ministers on the right help and advice ethnic minority businesses need for growth and success. It was launched by DTI Ministers in July 2000.

Click here to visit the Small Business Service website.

Click here to visit the Ethnic Minority Forum website.