IAWM’s Innovation Policy and Practice event on 19th November discussed a West Midlands regional response to the recent national report Supporting Diversity and Inclusion in Innovation, backed by Innovate UK. The event was part of IAWM’s New Voices of Innovation Campaign. In the first part of the event a panel presented and discussed the implication of the report nationally and regionally, to set the scene. Speakers included:
- Beldina Owalla, Sheffield University, one of the report authors
- Ewa Bloch, Innovate UK, on national implementation
- Monder Ram, Director of CREME, Aston University, a regional response
- Claire Spencer, Senior Policy Adviser – Public Services & Inclusive Growth, WMCA, about regional implementation.
In part two, all attendees had the opportunity to discuss the implications of the report in small groups and suggest actions for WM regional stakeholders to take in order to Support Diversity and Inclusion in Innovation. These actions are summarised at the end of this blog.
Dr Beldina Owalla
After an introduction by Pam Waddell, Director of the Innovation Alliance for the West Midlands, Dr Beldina Owalla of Sheffield University and author of the Supporting Diversity and Inclusion in Innovation report commissioned by Innovate UK (UKRI) ran through the key findings of the report (presentation here), which focussed on the opportunities, challenges and support needs of ethnic minority and disabled innovators.
A key finding was that there is a greater appetite for entrepreneurship in the group classified at BAME: the idea of starting a business is attractive to 46% of those surveyed classified at BAME, and 36% of those with a disability compared with 33% of a control group. More of those born outside the UK (48%) found the idea attractive compared to those born in the UK (31%), and it was more attractive to younger people (45% of those aged 18-24).
However, considering the challenges and support needs of business owners, BAME and disabled respondents were found to have greater barriers to entrepreneurship. The report found that unfavourable economic conditions and a lack of time were key barriers for all, along with a lack of finance and a lack of awareness of available business support. However BAME respondents also felt discrimination was a barrier (31%), as did 17% of those with a disability, compared to 10% in the control group.
Drawing on the findings from six focus groups from across England, the research undertaken also established that participation in innovation was affected by added layers of disadvantage created by the intersection of social identities including gender, race, class and age. Perceptions and experiences of discrimination and a feeling of not fitting in contributed to this exclusion or even stigmatisation in the case of those with disabilities. There was also limited knowledge of and access to networks and support initiatives, and a resulting lack of confidence leading people to rule themselves out from starting a business.
Key recommendations of the report included recognising the structural nature of exclusion, and the need to develop clear policy rationales to promote the understanding of equality, diversity and inclusion (EDI) in innovation. Having relatable role models and mentors specifically for disadvantaged young people who don’t view entrepreneurship as a viable career path was also recommended, while recognising that it will take a genuine and sustained commitment to changing organisational cultures for them to become truly inclusive.
Ewa Bloch, WM Regional Manager, Innovate UK (IUK), spoke about how IUK is responding to this by making equality, diversity and inclusion at the centre of their work, leading by example (presentation here). This includes looking at who is benefitting from IUK funding; who can be inspired to get involved; looking at how those that IUK work with consider equality, diversity and inclusion; and how EDI is considered in the development of innovation, to ensure that any potential bias is addressed, risks of negative impacts are mitigated, and potential new markets are explored. Stating that IUK is positioning itself as a thought leader to influence this agenda, Ewa referenced more reports which provided startling facts to back up the need for change. From the report Diversity beyond Gender, 0.02% of total venture capital invested in the last 10 years went to black female entrepreneurs; 42.72% of UK venture capital invested at seed stage was invested in founding teams with at least one member from an elite educational background – Oxford, Cambridge, Harvard, and Stanford, and 19% of the UK population (1 in 5 potential UK consumers) has a disability, so businesses are losing c. £2bn a month by ignoring the needs of disabled people.
Ewa went on to highlight two flagship initiatives IUK is undertaking. The first, in partnership with The Prince’s Trust is Young Innovators, helping young people aged 18–30 from diverse backgrounds to start and grow sustainable businesses. The second, Women in Innovation is now on its third wave, having attracted 749 applications (up from 257 applications in its second wave), particularly encouraging applications from those with regional and ethnic diversity.
In practical terms, IUK is now collecting data related to equality, diversity and inclusion so it can understand and learn from that, and is making changes to its application forms to ensure applicants consider EDI and disability in how they design and develop their innovations.
Professor Monder Ram OBE
Next to speak was Professor Monder Ram OBE, the Director of the Centre for Research in Ethnic Minority Entrepreneurship (CREME) at Aston University. Welcoming the opportunity to discuss the report with the IAWM network, Monder suggested the report should be seen in the context of other reports from the last 6 months including CREME’s biggest ever study of ethnic minority businesses using 20 years of global entrepreneurship monitor data, and the British Business Bank’s Entrepreneurship and Diversity report which will inform the central government’s race and equality commission on this agenda, with a working group looking at recommendations which will include issues such as venture capital. Taking all this into consideration, Monder showed that there is a wealth of evidence pointing in 3 directions:
- The endemic, systemic nature of problem, showing that minority communities are more likely to live in deprived areas, and are more likely to have challenges in educational outcomes which affect labour market outcomes. There are also chronically low levels of wealth which affects an individual’s capacity to develop, start and thrive in business. Minorities, particularly black communities, have always had high levels of aspiration, but are less likely to develop businesses. Monder stated it wasn’t clear why this was the case, but that structural solutions were needed.
- Despite deep seated challenges, there are reasons to be optimistic. The evidence shows that BAME entrepreneurs are more innovative and are more likely to trade overseas than their white counterparts, and are more likely to have higher growth aspirations. The 250,000 businesses with BAME founders contributed £25bn to UK GVA, which is the same as the entire Birmingham economy and is likely to be an underestimation. Monder said that these businesses barely exist in the current policy debate, but need to be nurtured in a post Covid recovery.
- There is a persistent tendency for these businesses not to be in the networks that matter in terms of business support. They are locked out of mainstream networks and rely on informal networks instead. Supportive initiatives need to be collaborative and co-designed, integrating different sources of expertise, rather than minority communities having initiatives ‘done to them’.
Responding to all of this, the final speaker was Claire Spencer who works in Inclusive Growth at WMCA, with the aim of holding economic activity to higher standards. Claire reflected that who gets to participate in and shape economic activity and who gets to benefit from it are an important part of getting equality, diversity and inclusion policy right, with the sweet spot being the alignment of social policy, economic policy and collective endeavour. Reflecting on the IUK report, Claire said that exclusion from business innovation can occur because of multiple disadvantages – when you have less you are more likely to be risk averse. The best innovation programmes create a safe space to fail but it requires confidence to take a risk and fail in the first place. How can this risk be mitigated for people who have more to lose?
Claire went on to talk about the need to look at where we value innovation. For those with a disability, their experience of their disability can act as a spur to innovation. If we support innovation that designs out barriers for disabled people, they could have more space to innovate beyond those barriers, and so entrepreneurship and setting up a business could become a path they want to follow.
Concluding, Claire reflected that as we, and as WMCA, discuss how we create policy as part of the region’s response to this report, as innovation doesn’t exist in a social vacuum, it will be necessary to reflect on social policy to make sure innovation policy can achieve everything we’d like it too.
During the speaker session, several useful links were shared in the chat function:
Claire referenced the WMCA Health of the Region 2020 report
Drew referenced The Colour of Power
Claire recommended the book Scarcity by Sendhil Mullainathan and Eldar Shafir – a reflection on the cognitive load of poverty, and other forms of scarcity.
Next, in four break out rooms, all attendees had the opportunity to discuss the implications of the report in small groups and suggest actions for WM regional stakeholders to take in order to Support Diversity and Inclusion in Innovation. The suggested actions are summarised below:
1. How can we increase the confidence of minority and underrepresented groups to become or to self-identify as innovators and entrepreneurs?
- Ensure starting a business feels like an attractive option and a risk worth taking to all, with high visibility of people from under-represented communities already working in this space.
- Support an ambition within schools to encourage students to pursue further education, spreading horizons within disadvantaged communities. Fear of failure and related shame are big barriers.
- Develop challenge-led events in local schools, fostering entrepreneurship with young children, perhaps in partnership with organisations that look at career and enterprise training within schools and colleges to promote innovation.
- Focus on ability and talent, not qualifications, and encourage employers to actively be support employees in life long learning/training.
2. How can we make business support (and finance) for innovation more visible and accessible to minority and underrepresented groups?
- Broaden existing ‘mainstream’ networks to ensure any initiatives are co-designed, relevant and visible to all.
- Explore the development of a simple guide to inform mainstream organisations about how they can better connect to diverse communities and organisations.
- It is a struggle to connect to under-represented communities and to build trust – ambassadors or champions could be a way of building relationships while highlighting the diverse talent in the region.
- Need to consider all under represented communities, including those from economically deprived backgrounds, refugees, those aged 16-20, and those who may be digitally excluded.
- Consider the development of more accessible smaller seed funds with excellent signposting.
3. What changes in regional structures and organisational attitudes could encourage or reduce barriers to innovators and entrepreneurs from minority and underrepresented groups?
- To effect structural change, as a starting point EDI needs to be measured.
- LEPs and WMCA and other organisations need to ensure they are representative – Chairs of Boards should ensure it is representative of the community it serves.
- We need to set in place a constant drive to build on this as a regular activity, not just raising awareness in the short-term. We should have a regulation/policy in place to drive this.
- Acknowledge the tension between needing supportive networks within under-represented communities while not cutting these off from broader mainstream networks.
- We need to stop seeing the problem as access to finance – it should be about representation and control. Unless there’s real change in governance and representation, the changes aren’t long-standing.
Further reports referenced in the breakouts include:
LEPs an update on progress from the National Audit office, specifically Figure 3, p16
Gender representation on Local Enterprise Partnerships (LEPs) boards as of February 2019 and Figure 7, p22 Progress against commitments set out in the 2018 policy paper There are no diversity targets!
Strengthened Local Enterprise Partnerships from MHCLG, specifically pages 15-18.
Business in the Community (BITC) and their West Midlands Leadership Board.
The Innovation Alliance for the West Midlands (IAWM) would like to thank all the panellists for this event, and everyone who contributed to the lively debate in the chat and in the break out discussions. We hope the suggested actions summarised above will provide a starting point for everyone involved to use in their work to support equality, diversity and inclusion in innovation.
Innovation Alliance for the West Midlands (IAWM) Follow Up:
Having convened this Innovation Policy and Practice panel discussion and debate, IAWM recognises the suggested actions as validating the New Voices in Innovation approach we are championing, and which will be live on our website soon. We will also:
- Work with WMCA to review equality, diversity and inclusion in the West Midlands Innovation Programme.
- Keep equality, diversity and inclusion as a standing agenda item for our working groups, including the Innovative Low Carbon Working Group, the Innovative Health Working Group and the Smart City Alliance.
- Connect and catalyse efforts to champion equality, diversity and inclusion across all parts of the innovation ecosystem.
(Author: Jane Holmes, Innovation Alliance for the West Midlands)