Scottish Economic Recovery

High aspiration entrepreneurs could boost Scottish economy.

Scotland's economic recovery could be set for a boost from entrepreneurs with high hopes for significant business growth, after a leading survey found the number of those individuals has doubled in recent years.

The Global Entrepreneurship Monitor (GEM) 2013 report found that the rate of early-stage entrepreneurs who expect to employ at least 10 people in the first five years has not only doubled since 2008 but continues to grow.

High aspiration business owners were also found to be more connected with the entrepreneurial community, more innovative, more likely to export, and to share ownership with multiple owners.

Professor Jonathan Levie of the University of Strathclyde’s Hunter Centre for Entrepreneurship, author of the report, said: 

"The increase in early-stage entrepreneurs with high aspirations in Scotland is a welcome development.

"These types of innovation-driven business start-ups can have a real impact on the Scottish economy, providing employment opportunities, increasing export activity and encouraging even more entrepreneurial activity.

"The University itself has had real success in supporting the start-up of companies who’ve turned research into commercial enterprise – a recent example being technology company Smarter Grid Solutions which has already grown significantly with offices in Glasgow, London and New York."

Sir Tom Hunter, who endowed the Hunter Centre for Entrepreneurship at Strathclyde, said: 

"The good news for Scotland is undoubtedly that the GEM report points to high aspiration early stage entrepreneurs doubling from 2008 to 2013. And early stage entrepreneurial activity remains at all-time high.

"However, that high still ranks us average at best and I don’t believe anyone has our aspirations set on average. We must close the gap on the US and Canada and to do so we need greater cooperation.

"The University of Strathclyde won the UK Entrepreneurial University of the Year, something to celebrate and build upon. The Hunter Centre has established its own advisory board as we look to address the need to create an entrepreneurial environment in Scotland that is world class and breaks down barriers."

Among the report's key findings:

In 2013, opportunity perception continued to slowly recover in Scotland, although it remained much lower than in Arc of Prosperity (AOP) nations.

The Total Early-Stage Entrepreneurial Activity (TEA) rate was steady at 6.8% (6.9% in 2012), and was very close to the UK rate of 7.3%, and the average for participating innovation-driven nations (7.1%) and AOP nations (6.9%).

Men and women entrepreneurs tend to create different types of business and fund their start-ups differently. In Scotland as in the UK and AOP countries, half of all businesses run by women owner-managers are consumer-oriented businesses. 

Compared with their counterparts in AOP countries, Scottish female business owners are less likely to export and fewer of them expect to grow the business significantly in the next five years. Compared with their UK counterparts, female nascent entrepreneurs in Scotland are more likely to completely self-fund their business.

Businesses run by male business owners in Scotland, the UK and AOP countries tend to be evenly distributed across transforming, business services and consumer-oriented sectors. Compared with their counterparts in AOP countries, Scottish male business owners are less likely to export but about equal proportions of Scottish and AOP male business owners are significant exporters. Scottish male business owners appear to have a similar distribution of aspiration for the growth of their business as the UK average. Male nascent entrepreneurs also have a similar funding profile for their business as their UK counterparts, with a wide range of external sources tapped for funding.

The 2013 GEM Scotland report is the thirteenth assessment of national entrepreneurial activity, which analyses entrepreneurial attitudes, activity and aspirations as well as the factors that underpin them.