Why British South Asian Entrepreneurship is in Decline

For decades, entrepreneurship has been woven into the fabric of British South Asian life.

From the bustling corner shops of the Midlands to thriving curry houses in London, British South Asians have long been celebrated for their business acumen and enterprising spirit.

This community, shaped by waves of migration and resilience, built a reputation for transforming the UK’s retail landscape, revitalising high streets, and contributing billions to the national economy.

Family-run businesses became a hallmark of British Asian identity, with many second- and third-generation South Asians inheriting not just shops and restaurants, but also a legacy of self-reliance and ambition.

The entrepreneurial drive was so strong that, by the early 2000s, British Asian businesses were estimated to contribute over £5 billion to the UK’s GDP.

Yet, as we move through 2025, this once-flourishing tradition is facing unprecedented challenges.

Despite a national surge in entrepreneurial ambition, the actual rate of successful business creation and sustainability among British South Asians is showing signs of decline.

This shift raises important questions: What is driving this downturn? And what does it mean for the next generation of young South Asians in Britain?

Changing Economic Landscape

The UK’s economic environment has become increasingly difficult for aspiring entrepreneurs.

While nearly half of UK adults are now considering starting a business or side hustle, this enthusiasm is not translating into sustained success for all communities.

For British South Asians, the landscape is marked by rising costs, tighter access to finance, and increased regulatory burdens.

Rohit Kohli, Operations Director of The Mortgage Stop, said:

“The British Asian community, known for its vibrant entrepreneurial spirit, stands at a pivotal point.

“In recent years, especially post-Brexit and amid financial crises, British Asian-owned small and medium-sized businesses have faced challenges like employee shortages, funding difficulties from banks, safety concerns, and increased regulatory burdens, all impacting their growth.”

The cost of living crisis and inflation have squeezed profit margins, while higher interest rates have made borrowing more expensive.

Sectors traditionally dominated by British South Asians, such as retail, hospitality, and community pharmacies, have been particularly hard hit.

Many independent pharmacies, for example, are now struggling financially due to years of inadequate government support and funding cuts.

Barriers to Accessing Finance

Access to finance remains a significant barrier for British South Asian entrepreneurs.

According to research by the British Business Bank, Asian and other ethnic minority entrepreneurs have a lower success rate for starting businesses and see less overall success compared to their White counterparts.

Systemic disadvantages, including under-representation in senior workforce positions and deprivation in certain communities, play a role in these disparities.

The report notes: “Access to finance appears to be a major barrier for Black, Asian and Other Ethnic Minority entrepreneurs, and the reason why 39% and 49%, respectively, stop working on their business idea.”

This challenge is compounded for those from lower-income households, who are less able to invest in their ideas or weather the early financial instability that often accompanies new ventures.

Emma Jones CBE, founder of Enterprise Nation, highlights the importance of support:

“It’s about the accessibility of technology and good-quality business support that helps people to get started and grow.”

However, despite the proliferation of business support schemes, many British South Asians still find it difficult to secure the capital and mentorship needed to scale their businesses.

Shifting Aspirations and Career Choices

Another factor contributing to the decline in entrepreneurship is a shift in aspirations among younger British South Asians.

Previous generations often saw business ownership as the primary route to economic security and social mobility.

However, today’s youth are increasingly drawn to professional careers in technology, finance, and healthcare.

This change is partly driven by the desire for stability in an uncertain economic climate, as well as the growing prestige associated with white-collar professions.

The expansion of higher education and the success of British South Asians in politics, law, and medicine have broadened the range of role models available to young people.

As a result, fewer are choosing to take on the risks and responsibilities of running a family business.

The Impact of Policy and Regulation

Government policy and regulatory changes have also played a role in shaping the fortunes of British South Asian entrepreneurs.

The aftermath of Brexit, for example, has led to shifts in immigration patterns, labour shortages, and new trade barriers, all of which have affected small businesses disproportionately.

The Labour government’s approach to trade, investment, and regulatory frameworks is being closely watched by the British Asian business community.

As one founder of a British Asian-owned company put it:

“I hope the new government fosters a positive business environment, avoiding tax hikes that could discourage investment.

“Lower inflation and interest rates would support small and medium businesses.”

“Strengthened ties with the EU would particularly benefit sectors like pharmaceutical distribution and manufacturing, community pharmacies, and public well-being.”

However, the uncertainty surrounding future policy directions has made it difficult for many entrepreneurs to plan for the long term.

The regulatory burden, especially in sectors like healthcare and hospitality, has increased operating costs and administrative complexity, further discouraging new entrants.

Gender and Regional Disparities

The decline in entrepreneurship is not uniform across the British South Asian community.

Female entrepreneurs, in particular, face additional hurdles.

The British Business Bank’s research found that more than a third of female business owners from Asian and other ethnic minority backgrounds reported making no profit in 2024.

This was compared to just 16% of White male business owners.

Societal expectations, caring responsibilities, and limited access to networks and capital all contribute to these disparities.

The location also matters.

Entrepreneurs in Greater London, which has a large British South Asian population, face tougher market competition, higher costs of living and operating and greater disparities between poorer and wealthier neighbourhoods.

In contrast, those in the South East and North East of England tend to see more success, suggesting that regional imbalances in finance and opportunity persist.

Adapting to a New Reality

Despite these challenges, the entrepreneurial spirit within the British South Asian community is far from extinguished.

Many are adapting by embracing new business models, leveraging technology, and seeking opportunities in emerging sectors such as fintech, digital marketing, and green energy.

The rise of side hustles and online ventures reflects a pragmatic response to economic uncertainty and the desire for multiple income streams.

Emma Jones remains optimistic:

“The number of people who want to start a business just keeps on expanding every year, it’s incredible.”

“It demonstrates that new generations now entering the world of work see starting a business as a mainstream career option and it’s something that the majority of working-age people expect to do at some point in their life.”

Support organisations, such as the British Business Bank and Enterprise Nation, are working to address barriers by providing start-up loans, mentoring, and regionally targeted investment funds.

There is also a growing recognition of the need to promote diversity and inclusion in entrepreneurship, with initiatives aimed at increasing transparency and supporting underrepresented groups.

The decline of entrepreneurship among British South Asians marks a significant shift in the community’s economic landscape.

While the challenges are real, the story is not one of defeat, but of adaptation and resilience.

As the UK continues to evolve, so too will how British South Asians contribute to its economy.

By embracing new opportunities, advocating for supportive policies, and building on a proud legacy of enterprise, the next generation can redefine what it means to be an entrepreneur in modern Britain.

The path may be more complex than before, but the spirit of innovation and determination that has long characterised this community remains as vital as ever.