Call for radical rethink on entrepreneurship policy

Robert Crawford, who quit SE in 2003, said Scotland will fail to make the business breakthroughs it needs to keep pace with other parts of the UK - and Europe - under the current system of enterprise agencies and grant funding.

Giving evidence to a parliamentary inquiry into the future of Scotland's enterprise network yesterday, Crawford said there needs to be a radical rethink of how Scotland can improve its record on entrepreneurship.

The latest Global Entrepreneurship Monitor from the University of Strathclyde ranked Scotland among the worst of 20 developed countries for early stage business activity.

Crawford, pictured right, said other small economies such as Finland had achieved private sector expansion at a far more impressive rate than Scotland despite the millions poured into SE and Highlands and Islands Enterprise.

With public sector budgets now under scrutiny, Crawford said the time is ripe to investigate how Scotland can better achieve the private sector growth it so desperately needs.

He told the economy, energy and tourism committee: "If we are to have market break-throughs along Finnish lines … what they (the enterprise agencies] are doing will not achieve it and we need to be honest with ourselves."

Crawford said policymakers should seek to crank up the amount of debt and equity funding available to start-up businesses, as "grants don't work in the long-run".

"Great businesses typically don't need grants," he said.

Donald MacRae, a former SE board member and chief economist for Scotland at Lloyds Banking Group, agreed start-up firms would benefit from the greater availability of risk capital.

The forthcoming Scottish Investment Bank is aimed to improve the availability of venture capital funds, but MacRae said the sums involved are likely to prove inadequate.

"I wish the figures would be larger," he said.