There
are over 10,000 black-owned businesses employing one or
more staff in London (4 per cent of all London businesses).
• 25 per cent of black business owners are women (compared
to 21 per cent for White and 17 per cent of Asian business
owners).
• Black-owned businesses are underrepresented compared
with the proportion of London’s population which is
black. Black-owned business comprise 4 per cent of all businesses,
but 12 per cent of London’s population is black.
• Most black-owned businesses are small (61 per cent
have one to four employees, compared to 49 per cent for
White-owned firms and 47 per cent for London as a whole)
• Black-owned businesses in London have a total turnover
of almost £4.5 billion.
• Black-owned businesses provide around 70,000 jobs
(3 per cent of total London employee jobs)
• The two biggest industries for black-owned firms
(in terms of number of businesses) are Real Estate, Renting
and Business Activities (broadly Business Services) and
Wholesale & Retail trade.
• Black businesses seem to have shown great resilience
during the recent slowdown.
• Black businesses are innovative - they are more than
averagely likely to introduce innovations in goods, services
or business processes, and significantly more likely than
the average to derive substantial benefits from such innovations.
The
black, African and Caribbean communities in London’s
economy
• According to the 2001 Census the black population
of London (African, Caribbean and black Other) is over 782,000
or almost 11 per cent of the total population (343,000 Caribbean,
379,000 African and 60,000 black Other) - See Table 1 below.
This rises to over 880,000 if you include mixed white and
black Caribbean and mixed white and black African.
• Around 66 per cent of the black working age population
of London is economically active, slightly lower than the
average for all ethnic groups, which is 68 per cent.
• Unemployment rates are high. In 2001 the ILO unemployment
rate was Ready for Business: The contribution of black businesses
to London's economy. 16 per cent for black Africans and
12 per cent for black Caribbeans
compared to 6.7 per cent for the total population and 5.3
per cent for the white population. However, unemployment
is lower among black women compared to black men. (This
is true for most ethnic groups).
• There are over 24,000 self-employed black people
in London. However, this is only 8.6 per cent of all black
people in employment. The average for all ethnic groups
is almost 15 per cent.
• Indian, Pakistani and Chinese people in employment
are more likely to be self-employed than the average, while
black African and Caribbean people are less likely. (Source:
Census data, Crown Copyright)
Black
people are underrepresented in the more highly-paid professional
and managerial occupations and over-represented in lower
paid occupations such as in sales and customer services
(see GLA (2003), Black People Pushing Back the Boundaries).
• 10 per cent of African and Caribbean workers are
managerial and senior officials compared to 17 per cent
for the average across all ethnic groups.
• 8 per cent of African, 9 per cent of Caribbean and
12 per cent of black. Other workers are employed in sales
and customer services occupations, compared to 7 per cent
for the London average.
• African and Caribbean workers are distributed across
industries in approximately the same patterns as the population
as a whole.
However, black workers are overrepresented in the health
and social work, Public administration and Transport sectors.
Interestingly, the same proportion of black African employees
is employed in Business Services, as for the population
as a whole.
Within
the broad category of black-owned businesses, around 22
per cent are owned by black Caribbeans (approximately 2,200
businesses), 28 per cent by black Africans (approx. 3,000
businesses) and 21 per cent by black Other (approx. 2,200
businesses). Mixed-white and black Caribbeans own 20 per
cent of black businesses (approx. 2,000 businesses) and
mixedwhite and black Africans own 9 per cent (approx 900).
Black-owned
businesses are more likely to have the legal structure of
sole proprietorships or partnerships and less likely to
be private limited or public limited (quoted on the stock
market). This no doubt is at least partly a reflection of
business size. Black-owned businesses in London tend to
be smaller than average
Turnover
The turnover of black-owned firms in London is estimated
by the London Business Survey at around £4.5 billion.
Black-owned businesses seem to be disproportionately concentrated
in the lower size band (up to £50,000), compared to
all businesses. However, roughly the same proportion of
black-owned businesses as total businesses are
medium-sized with turnover of £50,000 - £500,000.
While
Business services is the biggest sector for black-owned
businesses (around 25 per cent of all black-owned businesses
are in this sector), it is not quite as important for black-owned
businesses as for all businesses (40 per cent of all businesses
are in Business services). Black-owned businesses are over-represented
in industries such as Hotels and Restaurants and
Other Services (including membership organisations, recreational,
cultural and sporting activities, and services such as hairdressing).
Thus, there is some evidence of sectoral concentrations
in different areas than for all businesses. However, it
does not seem to be the case that black-owned businesses
are as highly concentrated in ‘niche-markets’
as has been
suggested in the literature4. In particular, the propensity
of African and Caribbean businesses to be concentrated in
the construction industry appears to be less strong now
than it was ten years ago.
Nonetheless,
black businesses-owners appear to be significantly underrepresented
in certain sectors. The industries in which black-owned
businesses appear to be the most underrepresented are Business
Services and Financial Services. This is important as these
two sectors are the two highest productivity sectors and
a significant part of London’s economy.
Business services has been the single fastest growing sector
in London’s economy over the past two decades. And
the London Plan predicts that it will continue to be one
of the fastest growing sectors to 2016.6 If blackowned businesses
are less concentrated in these sectors than other businesses,
then they may be less able to take advantage of projected
future growth in these sectors. Financial and Business services
account for around 32 per cent of employment in London and
around 40 per cent of London GVA.
