The low rate of business start-ups has long been lamented in Scotland but there is growing evidence that it is picking up. A Strathclyde Business School survey carried out last autumn showed that nearly 250,000 Scots recently became active in starting up businesses. That doesn’t mean they all succeeded but is evidence that there is clear appetite for entrepreneurialism. The key is to have in place the necessary support to allow those who do to scale up, grow and thrive.
Mark Logan’s appointment is therefore hugely welcome. A renewed focus on entrepreneurialism is crucial if we are to achieve the Government’s ambition of long-lasting economic transformation and successfully navigate the most challenging of climates.
The cost-of-living crisis has continued to accelerate, and concern about the UK’s sluggish economic growth rate has morphed into alarming predictions of recession. The real risk of stagflation must be a wake-up call for us to get back to delivering a recovery that brings long-term prosperity, centred on the fundamentals of growth, productivity and innovation.
Improving our entrepreneurial landscape must be an important part of our response to these challenges, and this is something Scotland’s financial and professional services industry fully supports. We want to see a growing network of home-grown entrepreneurs shining on the global stage, creating new businesses, and further building our foothold in the industries of the future.
We had an indication of how the government intend to deliver this last week when Codebase was awarded a £42million contract to create a network for tech start-ups to scale-up their businesses by accessing advice and mentorship from industry experts, like those at Barclays Eagle Labs, which is partnering the initiative. Scaling up is an area where Scotland is currently lagging behind, so it’s good to see the government focusing on this. As was pointed out in last year’s Logan Review, the ability for scale-ups to meet their full growth potential is driven by the strength of the entrepreneurial ecosystem and the level of collaboration they can foster.
There is still much work to do and there are three key areas the Government must now focus on to accelerate progress.
Firstly, we must have a skills infrastructure in place to match our aims. The proposals in the strategy are ambitious, seeking to embed entrepreneurial learning across the education and skills system. But to deliver this type of action means being willing to make serious changes to our curriculum and career advice services. It means creating a culture that is accepting and respectful of entrepreneurial success, which is so important to our wider economy; and teaching that failure, which is a natural risk of starting a business, is okay too.
There is also a challenge in reaching those groups who face barriers to the world of business. We know the number of young Scottish entrepreneurs is being offset by a failure to encourage over 40s down the same path. There is also a notable gender gap, with men more likely to start a business than women. Equipping a more diverse range of people with the tools to start a business must be a priority.
Secondly, a plan for entrepreneurialism must resist the temptation to be everything to everyone. Instead, it should maximise the opportunities where we have existing strengths, like energy, fintech, biotech, green tech, and premium food and drink. By building from an established base, we can enhance our reputation as global leaders around these key sectors, creating more export driven and globally competitive Scottish businesses. There are some great examples of Scottish-based companies, like FNZ and Skyscanner, who are doing exactly this. By fostering growth and development in the right areas, we can create many more.
Thirdly, we must ensure the strength of Scotland’s financial and professional services industry is fully mobilised to support this ambition. Through our extensive ecosystem, we have the tools to help businesses scale their innovations faster and the expertise to help them weigh up growth capital options and connect them to the right investors. We can help business build relationships with corporates and universities to accelerate R&D or identify legal challenges and provide the best advice on regulation or technology.
The onus to make this happen is, of course, on all of us, including our own industry. As a sector we must work together to leverage these strengths to the benefit everyone. We have a track record of supporting and developing Scotland’s entrepreneurs, but there is still more we can do.
Putting our energy into this endeavour is a sure-fire way of tackling our productivity and growth challenge and securing a long-term recovery that benefits the Scottish economy. Now is the time to turbocharge innovation and growth and reignite our reputation for entrepreneurial greatness.
Sandy Begbie CBE, Chief Executive, Scottish Financial Enterprise