Ethnic SMEs offer 'huge' untapped potential

Ethnic business owners have much to offer their mainstream counterparts, says Mervin Singham, director of the Office of Ethnic Affairs. Photo / Steven McNicholl

Mainstream small and medium sized enterprises should be tapping into the skills, experience and global connections held by migrant business owners, says an ethnic affairs leader.

Mervin Singham, director of the Office of Ethnic Affairs, said he wanted to see stronger connections between ethnic and mainstream SMEs in New Zealand.

"There is a huge untapped potential here. We have a wide range of ethnic people in New Zealand who have an in-depth firsthand understanding of the markets and the way businesses operate in their countries of origin."

Business owners from countries like China, Pakistan and India had connections which could help Kiwis gain a foothold when pursuing new markets overseas, he said.

"These connections open the door to a world of potential markets and investment, creating economic and trade opportunities for New Zealand."

As at March 2013, there were about 456,000 enterprises in New Zealand employing up to 20 people.

While there are no official statistics showing how many of these were run by migrants, a person only needed to walk down any main street in New Zealand to see the number of spice shops, restaurants and dairies being run by ethnic people, he said.

Greater interaction would also offer huge benefits to ethnic SME owners, who often struggled to understand things like health and safety or tax rules, he said.

"A lot of ethnic people that run SMEs find some things here mystifying because they come from a very different culture.

"So when mingling with local business owners, they can learn through a process of information osmosis."

Better relationships could also offer ethnic people access to wider markets in New Zealand, he said.

"Many tend to focus on their own community and they might be oblivious to the fact that New Zealanders that are not Chinese, for example, might also appreciate Chinese food."

David Deakins, director of Massey's New Zealand Centre for SME Research, said his research in the UK had shown migrants tended to gravitate towards their own community.

"They'll often start businesses that serve the needs of their own people. The issue then is how to become more mainstream and develop links with mainstream SMEs."

The same problem existed in New Zealand, though Deakins said he had not carried out research into the issue here.

The Office of Ethnic Affairs is this Friday running the EPIC (Ethnic People in Commerce) NZ 2013 conference in Auckland, offering business owners the chance to network and harness potential trade opportunities.

Those already registered for the conference include mainstream and ethnic SME owners from a range of industries, as well as representatives from government agencies.

Key speakers include Privahini Bradoo, founder of e-waste company Blue Oak, Christopher Luxon, head of Air New Zealand, and Tenby Powell, chairman of the Small Business Development Group.

Singham said such one-off events were important but what were really needed were ongoing networking opportunities.

"It can't be a flash in the pan approach. We believe this needs to be a constant effort."

More work needed to be done getting ethnic business owners connected with bodies like Business NZ and the Chamber of Commerce, he said.

Ultimately, business owners themselves needed to make a decision to reach out and network with people from outside their respective business communities.

SMEs make up 97.2 per cent of all enterprises in the country, employing 30.2 per cent of all employees and contributing about 27.8 per cent of Gross Domestic Product.