SPEECH/03/353

Mr Erkki Liikanen

Member of the European Commission, responsible for Enterprise

and the Information Society

"Entrepreneurs from Ethnic Minorities –

an opportunity for a more entrepreneurial
Europe"

Conference on Ethnic Entrepreneurship

Brussels, 26 June 2003

Ladies and Gentlemen,
Honourable Members of the European Parliament and the Committee of the
Regions,
Today, we are here to launch a European debate on the important issue of ethnic
minority entrepreneurs. We want to use this opportunity to raise awareness of the
important contribution to the European economy already made by ethnic minority
entrepreneurs. And we will look at how we can best respond to some of the most
persistent problems that are a daily reality for too many ethnic minority
entrepreneurs.
I am very pleased to see that so many of you have responded to our invitation.
And above all I am happy to see so many ethnic minority representatives here.
Welcome to you all.
For the purpose of this conference we have used a working definition of ethnic
minority entrepreneurs as “entrepreneurs who are either immigrants or have an
immigrant background”.
This definition is designed to link the work of today’s conference to the general
immigration policy of the European Union.
The Amsterdam Treaty - and particularly the conclusions of the special European
Council in Tampere in 1999 - represented turning points in the European Union’s
commitment to a common immigration and asylum policy.
The four main elements of this policy were defined in Tampere:
• partnership with countries of origin
• a common European asylum policy
• fair treatment of third country nationals, and
• the management of immigration flows
The EU’s immigration policy is now based on all four of these elements. Just three
weeks ago, we discussed in the College of Commissioners a package of three
communications related to immigration and asylum. One of these communications
deals with immigration, integration and employment. And it is in relation to the
important issues raised in this communication that I believe today’s conference has
an essential contribution to make.
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We all know that 11 September 2001 has had a negative effect on public opinion
towards the issue of immigration. Ethnic minority entrepreneurs throughout the
European Union have suffered from this effect.
Immigration is to some extent inevitable, but it is also to some extent necessary.
European societies depend on immigration. Falling birth rates and an ageing
population are being partially balanced by net immigration. Immigrant entrepreneurs
have an important role in entrepreneurship.
This upside is not often seen in the public debate on immigration. An important
challenge for policymakers is, therefore, to raise awareness of the vital role
immigrants play in our countries.
This is one of the reasons why we are here today.

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My colleague - Anna Diamantopoulou - Commissioner responsible for Employment
and Social Affairs is responsible for the work on the EQUAL community initiative.
EQUAL aims at finding new ways of tackling discrimination and inequality in the
market place. The quality of the projects selected under EQUAL and the exchange
of information and experience across Member States are helping us to identify good
practices and to develop our policy agenda for the very near future.
We all recognise the importance of entrepreneurship for competitiveness, jobs and
growth, and also its potential contribution to social cohesion. If we want Europe to
become more competitive and a more dynamic knowledge-based economy, as
agreed by our leaders in Lisbon three years ago, we need more entrepreneurs. And
immigrants tend to be more entrepreneurial.
Success in entrepreneurship depends on many factors. First and foremost it
depends on the individual’s mindset, motivation and capacity to identify an
opportunity and to pursue it.
But it also depends on the business environment. Much of our work is therefore
focussed on promoting a positive business environment for entrepreneurship across
the European Union and the accession countries.
The Commission published in January this year the Green Paper on
Entrepreneurship in Europe. This paper identifies and presents the key aspects of
entrepreneurship in Europe and asks what are the best policy options to encourage
more people into entrepreneurship and to get their enterprises to grow.
The Green Paper also highlights the fact that Europe still lacks entrepreneurial
drive. There is, however, one outstanding exception: Ethnic minority entrepreneurs,
who throughout the European Union display a very strong capacity and potential for
entrepreneurship!
How do we know this? It is true that few statistical data exist on the number of
businesses created in Member States by ethnic minority entrepreneurs compared to
businesses created by entrepreneurs from the majority population.
Nevertheless, the issue of immigrant/ethnic minority entrepreneurship is
researched. And the results of this research indicate that the impact of immigration
on entrepreneurship is increasingly important in almost all Member States. In some
Member States like Denmark, Sweden and the UK, immigrants are reported to have
an essentially higher propensity to start businesses than the majority of the
population.
By starting their own businesses, ethnic minority entrepreneurs not only make a
direct economic contribution to society. They also create their own jobs and, when
successful, can create jobs for others as well – often from their own ethnic groups.
In this way ethnic minority entrepreneurs can provide solutions both to problems of
lack of integration and of the risks of social exclusion.
However, ethnic minority entrepreneurs are also faced with a number of problems
when starting and trying to expand their businesses. Many of these problems are, of
course, the same as for any entrepreneur. But some problems are specific to ethnic
minority entrepreneurs or effect ethnic minority entrepreneurs more.
Ethnic minority businesses, in general, are very small and only seldom grow into
larger firms. They are also often concentrated in low entry-threshold activities and
face difficulties in shifting to more advanced and profitable business fields. The
mortality rate of these businesses also tends to be above average.

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As a result of this situation the full economic potential of ethnic minority businesses
has so far gone largely untapped.
Considering the high entrepreneurial drive of ethnic minorities in general, I think
everybody can agree with me that it makes economic and social sense to address
these problems.
At today’s conference we will discuss four areas that we have identified either as
specifically related to, or having a deeper impact on, ethnic minority entrepreneurs.
In your conference folder you have a short introduction note on each of these areas.
These areas were recently addressed during a conference, organised by the
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EQUAL programme, in London on June 5 and 6 . You will hear more about the
results of this conference later this morning. They have also been examined by the
Steering Committee, which my services set up for the purpose of preparing this
conference. Let me take this opportunity to thank the members of this steering
committee for their valuable work and contribution to this conference.
The first of the four areas to be treated is the rather interesting phenomenon that
many ethnic minority entrepreneurs tend to rely almost exclusively on co-ethnic
social networks when starting their businesses. These networks provide access to
markets, customers, finance, advice and labour, and thereby facilitate the start-up
process for many ethnic minority entrepreneurs. Their great value in this respect
should definitely not be underestimated.
Unfortunately, however, these networks also tend to become very socially closed
with little circulation of new information from the business community outside.
Exclusive reliance of such networks can therefore constitute a limitation for the
development of businesses, especially when these businesses try to extend their
activities into mainstream markets.
The next issue is that of involvement of ethnic minority entrepreneurs in political
dialogue. As politicians we need accurate information on the specific needs and
demands from all those concerned by our policies. If we do not get this information,
it is sometimes difficult to take these needs and demands into consideration.
So far, there seems to be an absence of ethnic minority entrepreneurs in the
political dialogue in most Member States, and most certainly at European level. This
is a very unfortunate situation. Let us hope that this conference will provide all of us
with some good examples on how this situation can be remedied.
In the afternoon session, we will look at two issues that pose problems for
entrepreneurs generally, regardless of their ethnicity, but that somehow seem to
affect ethnic minority entrepreneurs more.
The first of these is the tricky issue of access to finance. This is a challenge for all
entrepreneurs, however ethnic minority businesses face additional constraints. Their
business initiatives tend to be small, which makes them less attractive to
mainstream banks. This can be further complicated by cultural inhibitions. Many
ethnic minority businesses therefore rely on co-ethnic networks for initial financing.
Micro credit schemes might provide an alternative solution, but are not sufficiently
developed in all Member States.
Access to mainstream banking services is particularly important when ethnic
minority entrepreneurs wish to break out from their co-ethnic groups and expand
their businesses. I am therefore very happy to see that we have bank
representatives in our panel of speakers today who will share with us their
experience of working with ethnic minority entrepreneurs in innovative and
progressive ways.

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The last topic of the afternoon session deals with access to support services.
As said earlier, ethnic minority entrepreneurs tend to rely very much on co-ethnic
social networks. As a result of this, they are often not aware of the publicly available
support services. And even if they are aware of these, there seems to be a lack of
understanding of the types of services offered and the relevance of these services.
Perceived discrimination when addressing support service providers is unfortunately
also part of the problem.
At the same time, many of these public support services are not fully equipped to
deal with ethnic minority entrepreneurs, neither from their mindset nor from their
specialised knowledge. Part of the challenge addressed to us is to create Top Class
Business Support Services accessible to all and easy to understand. This is a
common goal, which has been set by the European Charter for Small Businesses.
On our way to achieving this goal, as we will see today, some Member States are
already quite advanced in finding specific solutions.
I have been talking about the entrepreneurial drive of immigrants and I want to close
my address to you with a success story. Those of you who have seen our news
flash already know it.
It’s about Mr. Kemal Sahin. Mr Kemal Sahin came from the Turkish countryside to
Germany to study engineering. Having finished his studies he was unable to get
work as an engineer as he had no work permit. So he decided to start his own
business in souvenir and clothing trading with a starting capital of only
5.000 Deutschmarks. Today the Sahinler group, founded in 1982, boasts
27 companies, has a turnover of 1,15 billion Euro and employs a staff of 12000, of
which over 9000 are in Turkey.
I think this is a very good example of what we are about to deal with today. It is an
example of the entrepreneurial drive of an ethnic minority entrepreneur, but also a
story of meeting barriers – no work permit, little capital – and of overcoming them! It
also gives convincing evidence of how an individual ethnic minority entrepreneur
can make an important contribution to economic growth and social cohesion, in this
case both in Germany and in his country of origin, Turkey.
Today, we are going to hear two more success stories from ethnic minority
entrepreneurs. I would like to take this opportunity to welcome Mrs Sohyi Kim from
Austria and Mr Mouzzam Choudhury from Sweden, who have kindly agreed to take
time from their busy schedules in order to share their stories with us.
I hope that this conference will be an important step forward in highlighting both the
potential of, and the obstacles to, ethnic minority entrepreneurship. I also hope that
it will set in motion a process of exchanging good practices between the
administrations of the Members States as well as among professional
organisations. I assure you of the commitment of the European Commission to
follow through in this process, and wish you a very successful conference.
Thank you for your attention.