Diversity and SMEs: Existing evidence and policy tensions

The purpose of this White Paper is to present an overarching review of the evidence that currently exists with regard to diversity and SMEs. It outlines longstanding concerns that entrepreneurial activities and ambitions are restricted to a narrow range of social groups, with others, in particular some ethnic minority groups and women, characterised as having both lesser interest in enterprise and lower levels of resources necessary to participate. Attempts to increase participation rates of under-represented groups have resulted in only modest changes. This White Paper introduces the key evidence relating to ethnic minority and women-led enterprises, explaining the context of each group, and summarising research evidence relating to their relative access to finance, markets and management. Research and policy within the field of diversity and SMEs is characterised by a number of tensions, relating to perceived or real discrimination; whether to promote a volume of new businesses or focus on high growth potential firms; whether specialist business support is more effective or desirable than mainstream provision; and whether there is evidence of market failure in the support provided to diverse enterprises.