Researcher to investigate Covid-19’s impact on ethnic minority businesses

A PhD researcher is investigating the challenges and opportunities the Covid-19 pandemic has presented to ethnic minority SMEs, who contribute a significant amount to the UK’s economy.

Posted 30 May 2022

Muhammad Mustafa, whose PhD is focusing on investigating ethnic minority SMEs.

Uncovering the pandemic’s effect on ethnic minority businesses

Muhammad Bilal Mustafa, a researcher based in Birmingham City Business School, has begun his studies into capturing the effect that Covid-19 has had on the UK’s ethnic minority businesses (EMBs), many of whom had to shut down their business operations during the pandemic.

In recent years, significant research has uncovered the importance of EMBs to the UK’s economy.

For example, the Federation of Small Businesses’ report, Unlocking Opportunity, uncovered that EMBs contribute £25 billion to the UK economy and are more innovative than their non-EMB counterparts.

However, the same report also outlined how Covid-19 has brought structural inequalities in the UK to the fore, with many EMBs struggling throughout the pandemic.

“Ethnic SMEs have become the most precarious group among all private sectors during the pandemic,” Muhammad says.

“Many shut down their businesses, and there is a lack of research in terms of how ethnic SMEs, principally, have been affected by Covid-19.”

Measuring impact and building resilience  

In order to accurately analyse the effect Covid-19 has had upon these businesses, Muhammad will survey a number of SMEs.

“Furthermore, we are also aiming to investigate to what extent ethnic SMEs managed to access UK government support in terms of finance,” Muhammad explains.

“Finally, we will identify the resilience strategies that ethnic owners adopt to recover from crises.”

Assisting ethnic SMEs in developing better resilience is something Muhammad is particularly passionate about.

“There is a real need to further research and knowledge in the fundamental factors that could strengthen the resilience of ethnic SMEs, as well as contribute to long-term sustainability,” he explains.

Aiding prosperity and inspiring change

Many ethnic minority entrepreneurs have struggled to access external finance to help their business survive and grow during the pandemic.

Recent research has found that 56 percent of Black and Asian Brits were looking to secure finance for business growth, but businesses owned by white entrepreneurs were twice as likely to be granted loans.

“I anticipate that I’ll discover that the Covid-19 pandemic has disproportionally affected the ethnic minority businesses in the UK and has altered the financing preferences among ethnic owners,” Muhammad explains.

“We hope that this research will provide EMBs with better evidence and support to help them build resilience.”

As Muhammad advances his research, he hopes to evaluate the measures that could enable both short-term and long-term prosperity of ethnic SMEs.

Presenting work to fellow researchers

Muhammad recently presented his project at Research Jam, a BCU event that brought together researchers from across the University’s faculties to discuss their work.

“Research Jam is an excellent platform for beginners to present their research,” Muhammad says. “I received valuable feedback from other experienced researchers and it proved to be a valuable networking opportunity.

“These networks offered me a great chance to collaborate with other colleagues to mutually contribute and make a difference to society.”