Migrant entrepreneurs benefit the UK economy more than ever, but continue to face funding difficulties, according to a new report.
Around one in every seven companies has been set up by a migrant worker, according to a new study by the Institute of Directors (IoD).
The number of migrants who have launched their own business in Britain is 17.2%, compared to 10.4% of UK-born individuals, said the report.
Despite the widespread claim that business is hiring only because “migrants are cheaper”, only 4% of IoD members say that cost was a factor in their decision to hire a foreign worker. Instead, hiring decisions were because of skills and competence.
The report, in partnership with mi-HUB, the first co-working space dedicated to supporting migrant entrepreneurs, argues that any post-Brexit policies designed to restrict or complicate visas would have a damaging long-term effect on the UK economy.
Although many migrant entrepreneurs have been a success, there remain significant challenges around networks, contacts, and knowledge of Government support, with many migrants to the UK unaware of official schemes and advice often used by native-born entrepreneurs
Simon Walker, director general of the IoD, said: “For all the talk of migrants ‘taking our jobs,’ it’s more likely that they will be creating them.
“As we move towards our departure from the European Union and rewrite our immigration policy, ensuring that we are still open to those who want to grow their businesses in the UK will be absolutely crucial.”
The report by the IoD and Brazilian-born entrepreneur Rafael dos Santos has highlighted the challenges faced by migrant entrepreneurs and the extraordinary benefit they bring to the UK’s economy through various case studies.
One case study citied Italian-born business owner Simone Vincenzi, who is one of the key figures changing the face of migrant entrepreneurs.
After working in the catering industry for eight years Mr Vincenzi decided to give up his current career and move the UK. The IoD report explains that like many other migrant entrepreneurs, he had passion but limited access to funds.
In under a year through he opened a pub, a restaurant and a chain of health food stores while building his consulting and coaching business, eventually founding GTeX in 2013, an enterprise that helps companies generate revenue through events.
Rafael dos Santos, founder of mi-HUB said: “It’s a privilege to have Simone as a case study in the Migrant Entrepreneurship Report. He represents how migrant entrepreneurs are helping people around the world and building a business in somewhere other than their home country.
“Migrant entrepreneurs have created 1.16 million jobs in the UK, we have brought far more to the country than people expect and it is still difficult for entrepreneurs from overseas access finance.
“There are almost half a million migrant entrepreneurs in the UK and it would be crazy to not help them to create new jobs and help the economy.”
The report, which was unveiled at the Houses of Parliament, asked 80 migrant entrepreneurs about the issues they faced and 44% believe that a lack of contacts and networks holds them back.
Thirty eight per cent suggest there is a lack of knowledge of Government and non-Government schemes designed to help start-up businesses, and 33% believe accessing finance is more difficult.
While more than half of the IoD 99, a group of business founders predominantly born in the UK, have used government grants or loans in the past five years, less than one in ten migrant entrepreneurs have benefited from those schemes.
Mr Santos added: “The Migrant Entrepreneurship Report highlights three problem areas for business people from overseas, these are lack of network, lack of local knowledge and lack of funding. By improving these areas more migrant entrepreneurs will be able to start a business easily in the United Kingdom and continue creating jobs”.