Scottish entrepreneurship is in a healthier state now than it has been for decades – but like entrepreneurs themselves, our ambition should know no limits writes Jim Duffy.
Once one of the great crucibles of industrialisation, and a pioneer of the modern economy, Scotland fell behind as business evolved in the 20th century. Despite the boost from North Sea oil, still robust manufacturing industry and a growing financial services sector, Scotland was not entrepreneurial enough…
We must continue to challenge that ‘safe and easy’ culture that prevents some of our brightest sparks grasping the entrepreneurial challenge.Jim Duffy, founder and Chief Executive of Entrepreneurial Spark
However, over the last decade the business birth rate has grown steadily, particularly after the financial crisis highlighted the need for a healthy small business sector. Policymakers have finally woken up to the fact that it is ambitious small businesses and entrepreneurs that create jobs as they grow, and there has been a steady trickle of moves and gestures in the right direction.
The result is that Scots today are more entrepreneurial than they have been for a long time, and have pretty much caught up with the rest of the UK. However, Scotland still lags behind London, and is light years behind the hotspots of the United States. And entrepreneurialism is certainly not about settling for being just “good enough”.
If the example of Silicon Valley shows us anything, it’s just how much can be achieved if an area can establish itself as a hub for early stage and high growth businesses. Once a place reaches critical mass, talent and money flock to it – but getting there is hard work.
If Scotland is to aspire to such status, further work still needs to be done on the business birth rate. More could be done, for example, in the area of education: we need to teach our children that starting a business is a real possibility for their future career, give them the skills to do so, and take away the stigmas that still surround risk and failure – we need to move away from a culture which quells ambition and makes the ‘safe’ path the easy option.
There is also more work to be done tackling the underrepresentation of women at the head of businesses - research from the Hunter Centre for Entrepreneurship recently showed that increasing the number of female entrepreneurs to match the number of men would generate more than £7 billion for the economy.
Beyond that, Scotland also needs to consider the next stage of growth for all of the great businesses that have been established here in recent years.
This crucial “second stage” of growth, which can take turnover from £1m a year to £10m or even £100m, requires different funding mechanisms and serious business support. To increase the availability of mentorship in this area, Entrepreneurial Spark will soon be launching The Scalerator, a new programme to prepare entrepreneurs for the mindset of scaling that should help convert recent improvements in the business birth rate into jobs and revenues.
Meanwhile, the devolution of greater fiscal powers to Edinburgh will give future Scottish Governments the chance to further position Scotland as a place to start and grow a business, so that we are not just encouraging our own people to be entrepreneurial, but pulling in ambitious young businessmen and women from around the world.
There’s no doubt that Scotland has come on leaps and bounds in recent times, and there is much in the pipeline – much to be proud of. Indeed, I think we’ll look back on this time as an ‘entrepreneurial enlightenment’, when the clouds parted and we saw the potential of the nation. However, in true entrepreneurial fashion, we mustn’t stand still. We must continue to push the agenda and, crucially, challenge that ‘safe and easy’ culture that prevents some of our brightest sparks grasping the entrepreneurial challenge.
Jim Duffy is the founder and Chief Executive of Entrepreneurial Spark, the world’s leading business accelerator for early stage and growing ventures with ‘Hatcheries’ across the UK and India hosting over 400 small businesses,