The uneven playing field of entrepreneurship

A presenter at the event speaking to the room with a screen in the background

Researchers from Warwick’s Enterprise Research Centre (ERC)Link opens in a new window are calling for greater support for ethnic minority and female entrepreneurs after a new report highlighted persistent barriers to business survival in the UK.

Launched at a recent ERC event, the Panel Study of Entrepreneurial Dynamics (PSED) 2023-25 examines the experiences of people starting businesses across the UK, with a particular focus on ethnic minority entrepreneurs. The research found that, while individuals from diverse backgrounds often show strong interest in entrepreneurship, they are more likely to abandon their ventures during the critical early stages of business creation.

The study revealed that only 41% of ethnic minority-led businesses remained active after one year, compared with 64% of those founded by white entrepreneurs. Women and ethnic minority founders were also found to have higher dropout rates, often linked to funding constraints, caring responsibilities, time pressures and the need to secure more stable employment.

Presenting the findings, Professor Mark Hart, Deputy Director of the ERC, said the evidence shows that the challenge is not a lack of entrepreneurial ambition but in ensuring that fledgling businesses are able to survive and grow, particularly during the first 12 to 24 months when new businesses are most vulnerable. The findings highlighted a need for more coherent business support services, tailored help for founders transitioning from working on their passion to the realities of running a successful business, and improved finance options.

The research was commissioned by Be the Business and the Mastercard Centre for Inclusive Growth and follows founders through the early stages of business creation to better understand the challenges they face and inform future policy development.

View the full report, UK Business Creation Process for Ethnic Minorities: Panel Study of Entrepreneurial Dynamics 2023-25Link opens in a new window, on the ERC website.