Entrepreneurship in Scotland: Although the percentage of Scots that know an entrepreneur has risen from 21% to 30%, the percentage of those who would be likely to start a business remains at 6.7%, 1.3% below UK’s average of 8%. The Total Entrepreneurial Activity (TEA) has increased from 4.6% in 2002 to 5.5% in 2003. The attitudes (fear of failure) towards entrepreneurship have improved because there is less fear of failure. This percentage has fallen from 36% to 30%. Many people here do not wish to risk an entrepreneurial project because their attitude towards failure is different than in the U.S. In America, a failed business is not simply seen as a failure. The entrepreneur is viewed as becoming wiser and more experienced. On the contrary, in Scotland, the failure of an entrepreneurial effort would be a disgrace. As for female entrepreneurs, the percentage increased from 25.78% to 26.67% between 1995 and 1999. Some barriers that women face when attempting to start their own business ventures are access to finances (discrimination by banks), financial management (women are wary of accumulating debt, which hinders their business growth), personal skills shortage (lack of marketing, sales, and management knowledge), and discrimination (customers are hesitant in doing business with women entrepreneurs).
The amount of people that would encourage a friend or family member to start their own business has increased. This is because of Scotland’s education sector that teaches enterprise. Scotland has done very well to promote entrepreneurship with its own people’s support. Through different companies, agencies, and investors, Scotland has already begun to turn once negative perceptions of entrepreneurship into positive ones. Thanks to an agency called Scottish Enterprise, the future of entrepreneurship in Scotland seems to be very bright. Their three policies of encouraging innovative new start-ups, encouraging more people to start businesses, and increasing the development of entrepreneurship education. Their implementation strategies are working wonders as well, with ideas such as making heroes out of their entrepreneurs by presenting them as positive role models, and also encouraging potential entrepreneurs through different programs, especially in education based enterprise.
In addition to companies, many informal investors are choosing to support their own family members financially. In a study done back in 2004, GEM reported that 78% of investors felt comfortable backing family members, as opposed to the rest of the UK or England which was at about 55%. Despite relatively good numbers, investment in Scotland still lags behind other high-income nations. The future looks very bright for entrepreneurs even still, especially with women being less likely to be held back from fear of failure as reported by the GEM. Women are also 40% of the assisted start-up businesses in Scotland and are attending more and more Scottish Enterprise programs on mentoring, networking, and finance. Even with this, Scotland still has a long way to go to catch up.
Entrepreneurial activity in Scotland for 2006 involved 4.2% of the population, higher than only 5 of the 42 more economically advanced sovereign nations surveyed. This was a 28% drop from 2005, compared with a 4% drop for the entire United Kingdom.
Other important information about Scotland’s entrepreneurial activity for 2006 is:
• 26.1% of the population say they know someone who started a business in the last two years, down 0.2% from 2005.
• 48.5% of the population feels they have the knowledge and skills to start a business, and 35% say they see good opportunities for starting new businesses in the next 6 months.
• 38.1% say that they are deterred from starting a business by the fear of failure.
• The number of business closures is about 2/3 the rate of nascent entrepreneurs, those actively planning to start a new business.
• The entrepreneurial rate for women was 2.6%, the lowest in Scotland since 2000.
• A higher percentage of entrepreneurs have taken a business enterprise skills training course when compared to non-entrepreneurs, and its over twice as likely that the course was taken voluntarily.
• 22% of males had prior experience or were currently running a business, compared with 14% of females
• 5.2% of males with prior experience or currently running a business were actively trying to start a business, compared to 2.2% of males without that experience.
• 1.5% of females with prior experience or currently running a business were actively trying to start a business, compared to 1.2% of females without that experience.
• The corporate entrepreneurship rate in Scotland was 0.16%.
• 26% of nascent corporate entrepreneurs expect to employ at least 20 workers within five years, compared to 14% of independent nascent entrepreneurs.
• 72% gave personal reasons as opposed to business reasons for closing their businesses.
• 5% of business closures were insolvencies or bankruptcy.