THE independence referendum has been cited as an influential factor as the new business start-up rate slowed in Scotland last year.
The rate of Total Early-Stage Entrepreneurial Activity (TEA), defined as the proportion of people involved in setting up a business or owners-managers of new businesses, dipped to 5.5 per cent in Scotland in 2014. It had reached seven per cent to bring it close to the UK rate, which climbed to 8.6 per cent in 2014, the year before.
The findings were disclosed in the Scotland 2014 edition of the Global Entrepreneurship Monitor (GEM), compiled by the Hunter Centre for Entrepreneurship of the University of Strathclyde.
Report author professor Jonathan Levie noted that, with 90 per cent of interviews carried out in July and August the referendum had been a âstatistically significantâ factor on the TEA rate last year.
Presenting the research at the University of Strathclyde, Mr Levie said: âEvents leading up to the referendum possibly had an effect. Weâre not there yet as the most entrepreneurial nation in the world â not on this measure.â
The report notes: âThe subdued rate for Scotland may have been affected by the timing of the survey, which was in the two months preceding the independence referendum.â
Asked whether any other underlying factors beyond the referendum might be behind last yearâs drop, Mr Levie said that the âofficial figuresâ on start-ups, which are due in November, might offer further clarity.
While he played down last yearâs figures as a âblipâ in a long-term upward trend, he conceded that âsome sectors have seen a slowdown in the economyâ.
Pressed on the continuing influence of constitutional factors, such as the plebiscite on Britainâs EU membership, Mr Levie said: âWhat business people want is certainty above all. Life in general and the economy is uncertain enough without having political uncertainty on top of it.â
The latest GEM report found that people who worked in a family firm are twice as likely to launch a venture of their own, with 25 per cent of entrepreneurs stating their business was developed from an existing family concern.
The research found that family spin-outs were twice as likely to be growth-oriented, and have a higher level of median start-up funding (ÂŁ25,000 versus ÂŁ10,000 for those who do not come from a family business).
Early-stage entrepreneurs were less likely to fear failure, and more likely to spot opportunities to develop businesses.
On funding, the proportion of entrepreneurs in Scotland, Wales and Northern Ireland who believe there are adequate sources increased after the Great Recession compared with the period before, from 10 per cent to 30-40 per cent.
Mr Levie said: âWeâve seen both a doubling of what we call informal investment â this is friends and family, neighbours, work colleagues and business angels.â
Mr Levie highlighted the emergence of alternative funding such as crowdfunding, which he said was still small but growing quickly.
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