“BUSINESS is absolutely blooming,” says a worker at Golu, a fashion store in Birmingham. The shop, which opened six months ago, is housed in a building that was until recently an empty factory. Now it is a smart three-level boutique with a glitzy new façade. Inside, women in black niqabs browse shimmering wedding saris and gowns.
Golu is just one of many thriving businesses in Sparkbrook, a once-industrial district of redbrick terraces just south of the city centre. As well as clothes shops, investment is pouring into bakeries, restaurants and juice bars. At night the streets pulse with young men driving expensive cars. And yet Sparkbrook is one of the poorest places in Britain. Fully 10% of the population claims unemployment benefit, compared with just 3% nationally. According to the government’s Indices of Multiple Deprivation, Sparkbrook is more impoverished than 96% of England.
It is also one of England’s most ethnically diverse areas. The 2011 census reported that just 9% of people in Sparkbrook were white and British. Some 43% were Pakistani; the rest were mostly a mix of Indian, Bangladeshi and Somali. And whereas in poor white parts of Britain high streets are dying, in Asian areas such as Sparkbrook, or Manningham in Bradford, they are thriving. Vacancy rates are low and rents are increasing. The payday lenders and bookmakers that fill the high streets of struggling white towns such as Middlesbrough are entirely absent.
Pakistanis in Britain have always been entrepreneurial, says Amjad Pervez, a businessman from Bradford, where the population is a quarter Asian. In the 1960s sharp-witted mill workers started selling curries to their colleagues; others made money importing chillis or chapati flour. When the mills and factories closed in the 1970s and 1980s, a clutch of entrepreneurs were created. “You couldn’t get any other jobs,” says Mr Pervez. “So what do you do? You open a shop.”
That attitude persists. And Asian businesses tend be more resilient than white British ones. Banks were (and, some say, remain) reluctant to lend to minorities, so capital is typically raised from family. That means that when banks stopped lending in the financial crisis, few Asian businesses were affected. Employees are typically relatives, who will tolerate pay cuts when trade is slow. In Bradford and Birmingham, some families own their premises, which protects them against eye-watering rent increases.
Even Asians who have moved to outer suburbs drive in to the new juice bars and halal steak houses: young Muslims “do not want curry all of the time”, says Mohammed Ali, a graffiti artist who grew up in Sparkbrook. Smart British-born Asian women fill ladies-only gyms and beauty parlours. Fashion houses serve an even wider market—people come from all over Britain to buy their wedding dresses. Weddings lead to more business: in Bradford, Naweed Hussein, a community activist, notes ruefully that high-street solicitors specialising in divorce are thriving.
Will this last? Shamit Saggar, an academic at the University of Essex, points out that Indians do not set up corner shops any more: they are qualified enough to find better jobs. In both Bradford and Birmingham, shopkeepers proudly note that their children are working as doctors or in banks. In future, the competitive advantages of cheap family labour and capital may fade.
Some already predict doom. “Everybody thinks that Asian businesses are just blossom blossom,” says one Sparkbrook shopkeeper, staring down the high street at his new competitors. But rents and business rates keep going up. Older firms are being pushed out; the newcomers’ expansion is funded by credit from suppliers, not careful saving, he says. Lots will go bust. Perhaps—but those are the problems of a boom. He should enjoy it.