'Lost generation' as Scotland fails to deliver entrepreneurs

SCOTLAND has a "lost generation" of entrepreneurs among those in their mid-thirties, according to a new report.

The latest annual Global Entrepreneurship Monitor (GEM), produced by the University of Strathclyde, revealed a "disappointing" lack of improvement over the past 12 months, with Scotland continuing to lag behind the UK as a whole when it comes to early stage entrepreneurial activity.

The study also painted a bleak future as it discovered a rising lack of interest among Scots in setting up their own businesses.

Hide Ad
Hide Ad

The report's author, Jonathan Levie of the university's Hunter Centre for Entrepreneurship, warned there are particularly low levels of interest and activity among Scots in their mid-thirties compared to other UK home nations. This is normally the age at which activity rates reach a peak.

"This represents a lost generation of entrepreneurs for Scotland," Levie said.

He blamed this on a lack of support and promotion of entrepreneurship at a higher education level and called on the Scottish Government to introduce a similar strategy to the Welsh Entrepreneurship Action Plan.

Since 2003, Wales has had "entrepreneurial champions" who explain to college and university students how their studies and skills might be used to set up their own companies in future. While Scotland is good at doing this at school-level, the support is not continued higher up the chain, Levie said.

"While Scotland cannot recover this lost generation, it can prevent another generation from missing out on their entrepreneurial potential," he said.

The report showed that Scotland's rate of total early-stage entrepreneurial activity (TEA) remained virtually unchanged last year, at 3.7 per cent, compared to 2009's historic low of 3.6 per cent.This compares to a UK rate for 2010 of 5.6 per cent.

Unlike other figures such as those produce by Business Gateway, TEA measures not only the number of business start-ups but it also includes other factors such as the number of people thinking of starting a business and investing in new companies.

Scots entrepreneur Sir Tom Hunter, who funded the Strathclyde centre, said the report made for "disappointing reading".

Hide Ad
Hide Ad

He said: "There is no great change in new business activity levels; the funding landscape remains extremely challenging; and there is evidence that for Scots, lack of interest us a more significant barrier to starting a business than elsewhere."

"Scotland needs to drive more economic development, both corporately and entrepreneurially, and if we do not drive a definitive strategy to do so…we will be an economy destined for reverse gear."

A spokeswoman for the Scottish Government said: "We welcome the latest GEM report as a contribution to the overall picture, although any direct comparison with other parts of the UK need to take account of the wider demographics and also actual outcomes like VAT/PAYE registrations."

The report also showed that more Scots who ran their own businesses quit for jobs in large organisations than in any other part of the UK.