More than 3,500 black and minority ethnic (BME) businesses were started in the West Midlands last year with UK figures for start-ups reaching record levels.
According to a study by Barclays, BME business start-ups have grown by a third - from 32,000 in 2000 to 50,000 in 2004. BME entrepreneurs now account for 11 per cent of all new business.
Around 23,000 small businesses in the West Midlands are owned by BMEs - the highest number in the UK outside of London.
According to the report, the growth numbers are also bolstered by real success with BMEs' business performance outstripping that of their white counterparts.
Figures indicate that they are three times more likely to have a turnover between £250,000 and £1 million and to employ staff.
John Addison, Barclays area manager for small business in Birmingham, said: "The rise in BME businesses is due to a surge in the number of young BME entrepreneurs, with more than twice as many running their own business compared to their white counterparts."
The report suggested that Pakistani and Chinese business owners showed the highest rates of entrepreneurial activity, with 22 per cent and 19 per cent respectively opting for self-employment.
Prof Monder Ram, director of the Centre for BME Research at De Montford University in Leicester, said: "Their entrepreneurial efforts are also noticeable for the non-traditional sectors they are entering, such as property and finance. However, there is no room for complacency as BMEs still face barriers."