Every day, you’ll find people on Twitter arguing about social justice. Recent decades have seen a growing consciousness of racial and ethnic inequality, especially in Western countries. Globalisation and social media make this discussion more common than ever.
But how exactly does this inequality manifest itself in business? What is minority entrepreneurship, and why should we care about it?
In this article, we discuss minority-owned ventures within the context of inequality. We will also highlight how and why they are essential to the business.
What Is Minority Entrepreneurship?
Minority entrepreneurship refers to business owners who belong to a minority group. That minority status can be religious, ethnic, racial, or cultural. Sometimes, gender or sexuality plays a role as well. In some countries and communities, women entrepreneurs are considered a minority. Read more about obstacles for women in our post on“Female Leadership: Regional Differences, Challenges, and Why is it Important?”
The exact definition of minority groups depends on where you live. According to Index Mundi, Belgium’s population looks like this: Belgian 75.2%, Italian 4.1%, Moroccan 3.7%, French 2.4%, Turkish 2%, Dutch 2%, other 10.6%. Belgian citizens are the majority, and all other ethnic groups are minorities.
The same study also looked into population percentages concerning religion. It is estimated that half of Belgium’s citizens are Roman Catholic. Over 30% are not affiliated with any religion. Others are Protestants, other Christians, Muslims, Jews, Buddhists, and atheist citizens. So, these religious groups are minorities in Belgium.
Despite distinctions in demographic statistics, minority entrepreneurship is the umbrella term.
What Is Ethnicity?
Considering common confusion surrounding race and ethnicity, we’ll define them here. Merriam-Webster defines race as “any one of the groups that humans are often divided into based on physical traits regarded as common among people of shared ancestry”. Therefore, race is a social construct primarily based on appearance.
Ethnicity is a broader term. According to Merriam-Webster, ethnic groups are made up of a “common racial, national, tribal, religious, linguistic, or cultural origin or background.”
That means ethnic groups include the term ‘race’ to an extent.
This broad definition explains why ethnic minority entrepreneurship is an excellent general term to approach the topic. It includes most minority groups within society as an umbrella term.
Obstacles for Ethnic Minority Entrepreneurs
Unfortunately, minorities still face more obstacles in everyday life compared to majority groups. The same is valid for minority business owners. We’ll discuss the five most critical barriers.
Access to Resources
Minority entrepreneurs often face more difficulty in gaining access to crucial resources. This obstacle can manifest in a lack of access to capital, networks, stakeholders, and more.
Without access to capital, it’s hard to start their businesses and keep them running. Founding a startup and investing in its future is no easy feat. So, a lack of access to capital is an extra roadblock for an already difficult task.
The same applies to fewer opportunities to make meaningful connections. Gaining sponsors and partners is crucial for many businesses. Minority entrepreneurs struggle to boost their ventures by networking. So, they can’t reach the same success as their competitors.
This obstacle is especially relevant for female entrepreneurs from minority groups. They face an extra layer of discrimination based on gender. A report from Evidence Briefing concluded that women entrepreneurs in the UK reach the same performance level as their male counterparts. That’s while they initially face a higher financial barrier.
Discrimination and Biases
It’s hard to determine if forms of discrimination are a symptom or the source of some obstacles on this list. Without racial bias against minority groups, they would have different access to resources. It’s a chicken and egg dilemma.
Everyday microaggressions are obstacles unique to many minorities. One example is a woman constantly being interrupted in a meeting. Hence, minority entrepreneurs have to balance maintaining a good reputation whilst handling outward discrimination.
Stereotypes and prejudices create toxicity. It can creep into every aspect of their career, from business meetings to negotiations with investors. Thus, discrimination can take many forms, some subtle and some obvious.
Different minorities face different stereotypes. In a lot of cases, they are negative stereotypes. So, minority entrepreneurs find themselves faced with less room for mistakes.
Dr Nika White, an African American keynote speaker, explains that the expectations for minority entrepreneurs are sky-high. Dr White emphasises how these entrepreneurs must prove their worth through perfect resumes. She talks about the pressure to be flawless. That makes the minority entrepreneur’s job harder in reaching the same success compared to the dominant group.
According to Dr White, the privileged expect “superhuman” performances from minority entrepreneurs. Given the systemic power dynamics, those exact people are often in charge. So, minority entrepreneurs depend on their cooperation and support.
More Than One Layer of Oppression
We’ve mentioned the broad definition of ethnicity and ethnic minority entrepreneurship. According to the principle of intersectionality, one person can fall under many categories. For example, someone may face discrimination based on their race and gender. More factors include religion, sexuality, age, financial status, and family background.
Awareness of these multiple layers of obstacles is essential. Minority entrepreneurs can face more than one struggle at the same time. Work rates and higher expectations make an already demanding career path more difficult.
Access to Education
Inequality doesn’t begin with a lack of resources in a minority entrepreneur’s first career move. Discrimination manifests itself long before that in their access to education.
In most countries, education is key to financial success and status. According to a Criminal Justice article, there is a direct link between lack of education and criminal activity. The more educated someone is, the less likely they are to end up in poverty. They’ll finally acquire a different perspective that prevents them from engaging in criminal activity.
A lack of education is thus a significant roadblock for minority entrepreneurs. They are more likely to fail in their business endeavours without proper skills.
Why is Minority Entrepreneurship So Important?
Minority-owned businesses contribute to the economy just like every other business. They create jobs and generate tax money. They also contribute products or services to their community. That alone is a good reason for governments to support minority entrepreneurs.
Additionally, wealthy countries attract immigrants. In the United States, for example, the number of minority businesses is ever-growing. One reason is that immigrants open businesses as a last resort to survive. They see their business as the best solution because it’s difficult to find regular jobs.
Nurturing a suitable environment for minority entrepreneurs is vital to a healthy economy. It’s crucial for people of diverse backgrounds to enjoy the same opportunities as others.
Advantages of Diversity in the Workplace
If you’re an entrepreneur who belongs to one or more privileged groups, there are things you can do. Use your status to encourage diversity in your business. Creating a diverse work environment and actively working against discrimination have several benefits.
Racism and other forms of discrimination hurt businesses. If minority employees don’t feel supported, their performance will suffer. So, an unhappy and unsafe employee is unlikely to deliver high-quality work.
Other than that, awareness of social justice issues has influenced consumers’ buying habits. According to a 2018 study, 64% of global consumers will consider buying from or rejecting a business based on their position on political or social issues. Good PR is thus another advantage of making sure you encourage hiring diverse workers for your venture.
Minority entrepreneurs face many obstacles in their respective communities. Racism and other forms of discrimination make it hard to start and maintain a successful business. Despite those struggles, minority entrepreneurship is crucial for a healthy economy.
Viewing entrepreneurship through a minority lens also allows us to highlight the importance of diversity in the workplace. As an entrepreneur from a majority group in your country, consider investing time and resources in making your work environment minority-friendly and discrimination-free for better productivity and PR.