For women who want to combine income generation with social impact, social enterprise offers a distinctive route into business that often begins with learning how to write a business plan. For Black, Asian and minority ethnic (BAME) women in the UK, this route can be especially important. While official data rarely breaks down social entrepreneurship by both gender and ethnicity together, the evidence that does exist points to higher rates of early-stage business activity among BAME women and a more inclusive culture within social enterprise than in mainstream small businesses.

Below is an updated overview of the key facts, drawing on the latest UK data on entrepreneurship, the labour market and deprivation.

1. Positive indicators for BAME women and entrepreneurship

BAME women are more likely to be involved in early-stage entrepreneurial activity than white women.

• The Global Entrepreneurship Monitor (GEM) UK Women’s Entrepreneurship Report 2021 found that early-stage entrepreneurial activity among Black women (16.6%) and women from mixed ethnic backgrounds (14.8%) was roughly double the rate seen among white women (around 7.9%). Women from other Asian backgrounds also recorded higher-than-average rates. These patterns suggest that BAME women are not under-represented in entrepreneurship overall; in many groups they are leading the way.

Ethnic minority people are more likely to be involved in social entrepreneurship than white people.

• Social Enterprise UK’s State of Social Enterprise 2021 reports that 16% of social enterprises are led by someone from an ethnic minority background, compared with 13% of small and medium-sized enterprises (SMEs) more widely. Women are also far better represented: 43% of social enterprises are women-led, against just 18% of SMEs. Although a single figure for BAME women social entrepreneurs is not published, the overlap of these two trends indicates that BAME women are likely to be a sizeable and growing part of the social enterprise movement.

Women are proportionally more likely to be involved in social entrepreneurship than in mainstream entrepreneurship.

• The gender gap in social enterprise is much narrower than in mainstream business. Social Enterprise UK’s research shows that women lead or co-lead almost half of the UK’s social enterprises, and many are founded specifically to tackle inequalities in health, education, employment and the environment. This inclusive profile makes starting a social enterprise an attractive option for women who have faced barriers in the conventional labour market.

One important caveat is that the available statistics do not usually report the proportion of BAME women involved in social entrepreneurship as a distinct category. What the eThe evidence, rather than addressing what is a limited company, shows that social enterprise is a sector which appeals to and attracts both women and ethnic minority groups, and that BAME women are active at the intersection of the two.sition of ethnic minority women in the labour market

Despite strong entrepreneurial activity, ethnic minority women still experience significant labour-market disadvantages. Understanding these barriers helps explain why social enterprise can be both a necessity and an opportunity.

• Overall, people from ethnic minority backgrounds have a lower employment rate than the white population. ONS Labour Force Survey data for 2023 shows the employment rate for women aged 16–64 was around 73% overall, but only about 48% for Pakistani women and 44% for Bangladeshi women.
• Economic inactivity remains high for Pakistani and Bangladeshi women. Around half of women from these groups are economically inactive, compared with roughly a quarter of white women, reflecting a combination of caring responsibilities, qualifications, workplace discrimination and cultural factors.
• Black Caribbean and Black African women have employment rates closer to the female average, but they are still under-represented in management and senior professional roles. A substantial share of employed Black women work in health and social care, where they are over-represented relative to their share of the workforce.
• Young women aged 16–24 from ethnic minority backgrounds are around twice as likely to be unemployed as their white counterparts, according to ONS figures. This early disadvantage can have long-term effects on earnings, confidence and career progression.

These patterns mean that women-led businesses led by ethnic minority founders often emerge from a need to create work that fits around caring responsibilities, bypass discriminatory hiring practices, or serve communities that are poorly reached by existing provision.

3. Ethnic minorities and areas of deprivation

Place matters. Ethnic minority households, particularly those of Pakistani and Bangladeshi heritage, are more likely to live in deprived neighbourhoods, and social enterprises are more likely than conventional firms to be rooted in those same places.

• The English Indices of Deprivation 2019 show that roughly half of Bangladeshi and Pakistani children live in the most deprived fifth of neighbourhoods, compared with less than a fifth of White British children. Around a third of Bangladeshi and Pakistani children live in the most deprived tenth of neighbourhoods.
• Social enterprises are strongly represented in these areas. Social Enterprise UK’s State of Social Enterprise 2021 found that 31% of social enterprises are located in the most deprived 20% of neighbourhoods, with a further 24% in the next most deprived fifth. In other words, more than half of UK social enterprises operate in communities facing above-average deprivation.
• Many BAME women social entrepreneurs start enterprises that directly address local deprivation: food projects, training providers, childcare co-operatives, mental-health services and community energy schemes. These organisations create jobs, keep money circulating locally and give women a leadership platform.

For BAME women considering social enterprise, the message is encouraging: the sector is already more diverse than mainstream business, the need is greatest in the communities many call home, and the tools to start are increasingly accessible. Organisations such as business support networks for ethnic minority women, local social enterprise hubs and sector bodies can help turn an idea into a sustainable organisation.

This article was originally published in the Prowess archive and has been updated to reflect the latest available UK data.