Hopes growing among new business starters

Deputy Business Editor

Tuesday 26 June 2012

THE number of Scots planning to start their own business has climbed to its highest level in a decade, according a major academic report.

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GREIG CAMERON DEPUTY BUSINESS EDITOR

The Global Entrepreneurship Monitor (GEM), produced by Strathclyde University, found 9.8% of those surveyed expected to set up a company in the next three years.

That was the highest since the report was first published in 2000 and comfortably up on the 6% recorded for 2010.

Total Early stage entrepreneurial Activity (TEA) rates also rose year-on-year between 2010 and 2011 from 4.2% to 6.2% although this was below the UK result of 7.6%.Professor Jonathan Levie, author of the report and director of knowledge exchange at the University's Hunter Centre for Entrepreneurship, warned against complacency.He said: "We have to wait and see whether the increase in people expecting to start a business gets translated into real businesses on the ground. "This is what you would expect to see at this stage in the economic cycle."It has been very tough for a number of years and this is the sort of stage you would expect to see an increase in new business activity. "That could be people who have been made redundant or put on part-time work and realised they would be better off working for themselves."There are good signs but there is still a long way to go."Access to finance remains a concern, with half of non-entrepreneurs expecting it would be the biggest hurdle in starting a business with those in areas of higher deprivation finding it more difficult to secure capital. Hiring staff, not knowing how to run a business, attracting customers and the complexity of regulations were other areas highlighted as barriers.Less than half of those surveyed felt entrepreneurship was a good career choice but 80% agreed that successful entrepreneurs receive a high standing in society.Mr Levie said: "Scottish entrepreneurs still face challenges in getting funding, customers and staff. "There is also considerable scepticism across the Scottish public about the wisdom of embarking on an entrepreneurial career, despite the relatively high status afforded to successful entrepreneurs."Sir Tom Hunter said Scotland needed to "do more" to succeed on a global stage and not let issues such as lack of funding hold people back. He said: "We seem in Scotland to have an ingrained mentality of expecting others to do things for us."We need ambition that avoids or jumps the hurdles, innovation that doesn't expect government to provide or you and me to solve problems."We need entrepreneurs that get on with it."GEM Scotland allows us to see where we are, not where we are going. It's up to us to invent where we go next." Colin Borland, head of external affairs at the Federation of Small Businesses in Scotland, said: "The report shows that the barriers which stop more people going into business differ significantly from the challenges which those in business actually experience. "There still seems to be a significant gap between the general public's view of what it takes to run a business and the reality. This has to be addressed. "Scotland needs all types and sizes of businesses, whether it is the mid-sized business on the verge of going global or the self-employed tradesperson earning enough to support themselves and their family."The GEM report, which interviews around 2000 people, also measured employee entrepreneurial activity (EEA) for those already in work but who may develop new products or business activities for their employer.It found that Scottish businesses with fewer than 30 people had a lower percentage of staff leading new business activity than companies with more people.Scots in businesses of up to 200 people were also less likely than the UK average to lead new business activity.Yet those employees were as likely as UK counterparts to agree employers provided support for individuals who came up with ideas for new goods and services.

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Hopes growing among new business starters

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