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In a drive to cut the massive budget deficit, the recently formed coalition government has created a joint Treasury-Cabinet Office group called the Efficiency and Reform Group (ERG). The Group’s work is co-chaired by the Minister for the Cabinet Office and the Chief Secretary to the Treasury.
Three senior business leaders that will also sit on the board include:
· Sir Peter Gershon, Chairman of Tate & Lyle, former government efficiency adviser and first chief executive of the OGC;
· Lucy Neville-Rolfe, Executive Director, Tesco PLC; formerly a senior career civil servant; and
· Dr Martin Read, Non-Executive Director of Invensys, Aegis and Lloyd’s of London.
Working on the Selling to the Public Sector project, it becomes immediately clear that the decisions from this group will have massive consequences on public procurement and supplier diversity. Since it was created, the ERG has been granted control of the Office of Government Commerce and Buying Solutions, the two major government purchasing organisations. The drive to ‘conduct, centralised procurement for commodity goods and services’ and ‘freeze all new advertising and marketing spend’ are amongst the group’s first priorities.
While several benefits can result from the initiatives of the ERG, including cost cutting measures and increased collaboration between purchasing departments, these initiatives in the field of public sector procurement should be taken with caution. Prime Minister David Cameron stated, during the debates in Birmingham, that Small and Medium Enterprises (SMEs) should be given more opportunities to bid for public sector contracts. However, contrary to this, it seems that the ERG is focusing on major suppliers and combining different public sector purchasing organisations, thus indirectly decreasing the amount of procurement initiatives aimed at SMEs.
In the short term, these policies might lead to public savings due to increased efficiency of public services. However, by overly relying on major suppliers to deliver public sector contracts, the public sector will fail to maximise its potential as an economic driver for SMEs and David Cameron will fail on this campaign promise.
 The Selling to the Public Sector project aims to engage with Corporate Procurement Functions in the public sector and suppliers to develop and create capacity in SME’s in the Leicester City area to access public sector supply chains, whether it is through be-coming an approved supplier or to win a contract.
Contributions of New African Entrepreneurs to the East Midlands Economy
In late 2008, CREME was awarded funding from the Economic and Social Research Council (ESRC) to embark on a one-year innovative research project on new migrant entrepreneurship in the region. As part of the bid that CREME put forward East Midlands Business Ltd (EMB Ltd) offered additional funding and they were active partners during the duration of the project from October 2008 up to October 2009.
The arrival of new migrant communities has heightened concerns about community tensions and there have been renewed debates among policy makers, practitioners and academics on multiculturalism, integration and community cohesion. The renewed debates are a reaction to the sheer size posed by new migrant communities, yet little is known about the people behind the statistics often quoted in mainstream media. Prior to this research there was no up-to-date profile of new migrant businesses in the East Midlands, and it was one of this research’s main aims to fill that gap.
The emerging results from this piece of research are pretty staggering and novel to say the least. When we started this research little did we know of what we would encounter in terms of what and how the new migrants have transformed the East Midlands inner cities and the impact they are making on the regional economy. It is no wonder that streets like Narborough road in Leicester, Normanton Road in Derby, Radford Street in Nottingham and the Hyson Green area in Nottingham have been massively transformed by new migrant business activity.
In this article, the term new migrants refer to those migrants who have recently come to the UK in the last decade (1998-2008) and have set up ‘new migrant communities’. Examples of such communities include those of new migrants from countries such as Somalia, Zimbabwe, Nigeria, Ghana, Afghanistan, Iraqi, Kenya, Zambia, Angola, Iran and Democratic Republic of Congo and other African nations too numerous to mention here. [editor's note: other 'new migrant' groups came to the UK from Eastern Europe (the A8 countries), they were the focus of a companion piece of research.] Most of the new migrants this research focused on, and who came from the countries mentioned above, currently have refugee status and, as such, this article will use interchangeably the words ‘refugees’ and ‘new migrants’.
But...first things first
In the media, much has been said about the new migrants with some saying that the new migrants are here:
· 'to drain on the UK national purse or to ‘fleece the economy'
· 'as refugees to increase unemployment and take our jobs'
· 'to take advantage of our generous benefits system'
Strong terms indeed!
Some may be wondering 'why study refugees?' Reasons for that are many but it suffices to say that refugees face multiple constraints with regard to integrating into the society in which they live and work. They constitute a distinctive immigrant subgroup, yet there has been little research carried out on refugee entrepreneurship and self-employment.
So what are the facts behind the headlines?
Our research was not to dispel these myths but to establish the entrepreneurial capacity of these new migrants and establish how policy makers, stakeholders, practitioners and academics can play a role to. Well, with our research we were not disappointed and we found some positive contributions that the new migrants are making to the East Midlands economy.
In the short space of a year, we unearthed over 350 businesses run by new migrant entrepreneurs from Africa and the Middle East. Out of this sample, we conducted 81 in-depth semi-structured face-to-face interviews.
Data from the above interviews has shown that:
· Over 40% of the new migrants left behind businesses in their countries of origin, and most (75%) had skilled jobs in their home country and are keen to start work here and earn a living.
· New migrants' previous work experiences in the UK showed that 60% work in arduous and low-paid jobs in cleaning, catering and the care sector. These sectors are traditionally shunned by ‘locals’ and they often struggle to attract qualified workers.
· Despite many barriers that the new migrants face, over half (55%) of the new migrants start up a business within two year of being in the country.
· Our evidence showed that the most entrepreneurial are the Somalis (27%) followed by those from Zimbabwe (17%), Nigeria (14%) and Iraq (12%).
· The most common business activities run by new migrants are in the service sector where they run internet cafes, international call centres and mobile phone accesory shops, money exchange shops, and some are into the low-order retail business. There is also greater diversity with some new migrants having established businesses that range from garages, beauty salons, barber shops, restaurants and bars, estate agency, care homes, higher education colleges, and butcheries. A few of the new migrants run social enterprises that focus more on child care and home based homework clubs.
· Our results showed that 50% of the new migrant entrepreneurs are self employed with almost a quarter (14%) of those entrepreneurs working to supplement their business income.
· A majority of new migrant business owners are working very long hours with the mean being 47 hours per week for African and Middle Eastern entrepreneurs. Our data shows that there is, however, a gender difference with women entrepreneurs working an average of 5 hours a day on their businesses while a majority of male entrepreneurs works an average of 8 hours a day.
· Women entrepreneurs constitute a quarter of the businesses we interviewed. The majority of these women are from Somalia, Zimbabwe and Tanzania.
· New migrants-run enterprises bring both economic and social benefits such as job creation, advice centres, regeneration, social cohesion, inclusion and they also promote a sense of community; they do a lot to foster good community relations. An overwhelming majority (80%) of interviewees expressed satisfaction on the big role they are playing in the community by providing a service.
Last word from the Government’s own advisor - Paul Wiles, Director of Home Office Research, recently commented: "The public debate over migration into the UK is often overly simplistic and ill-informed, sometimes distorted by myths about the extent to which migrants draw on our welfare state and without sufficient appreciation of the benefits they can bring."
Still need to know more? Well, look forward to the forthcoming series of this project where I will share with you more concerning the following themes:
Educational background of new migrants
Social and human capital
East Midlands mapping data
Business start up barriers and how the new entrepreneurs are coping.
New business opportunities with new migrant communities and
Watch this space for more..........
By Lovemore Muchenje, Researcher - CREME