The last tycoons?

Tuesday 7 June 2011

SCOTLAND'S economy has lost "a generation" of young tycoons, a situation that will hamper its recovery from recession, a new report has revealed.

SUCCESS: Report highlights the lack of young Scottish entrepreneurs following, clockwise from top left, Sir Tom Hunter, Sir David Murray, Sir Tom Farmer, Sanjay Mahju, Duncan Bannatyne and Michelle Mone.

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mark smith and martin williams

Fewer aspiring “thirty- something” business leaders are set to follow the successes of billionaire Sir Tom Hunter, the country’s second-richest man, lingerie tycoon Michelle Mone, and Duncan Bannatyne, one of the stars of TV’s Dragons’ Den.

The latest Global Entrepreneurship Monitor of more than 80 countries also says that fewer people are likely to set up in business in Scotland between the ages of 18 and 23 than anywhere else in the UK.The author of the report in Scotland said he could not understand why rates of entrepreneurial activity north of the Border are weaker for the age group, or why they stop growing beyond the age of 29. The figure plateaus from then until people are 50, when it falls.Elsewhere in the UK, the level of start-ups is peaking among those aged between 35 and 40.Dr Jonathan Levie of Strathclyde University’s Hunter Centre for Entrepreneurship, said: “This is basically a lost generation of potential entrepreneurs in their 30s, and I think it is something we should be worried about.“There are some very good things happening in Scotland, just not enough of them. We cannot recover this lost generation, but we can help to prevent [the creation of] another one through the universal provision at colleges and university of training in starting a business.”The study found the world’s fastest-growing countries are those with the highest percentage of new start-ups.Such activity is crucial for Scotland during the economic downturn, especially when the Coalition Government is relying on the private sector to revive the UK’s economy during the public spending squeeze.Mr Levie, who called on the Scottish Government to devise an enterprise policy action plan, said there is no obvious answer as to why so many young people are failing to take the plunge in business.He said one factor may be the growth of economic discontent, but added that generally there was less entrepreneurship north of the Border, which affects the levels of new start-ups.Mr Levie added: “There doesn’t seem to be one, single silver bullet answer as to why there are fewer people in their 30s starting businesses. The peak elsewhere in the UK is around 35, but in Scotland the rate flattens out at 29 -- it’s something of a phenomenon that probably involves a lot of different factors.”Sir Tom, from Ayrshire, who built up Sports Division into a near- £300 million retail empire after spotting the potential of selling trainers while working on his father’s market stall, expressed concern.He said: “There is no great change in new business activity levels.“The funding landscape remains extremely challenging and there is evidence that for Scots lack of interest is a more significant barrier to starting a business.”John Anderson, chief executive of the Entrepreneurial Exchange, a leading forum for Scotland’s business people, urged colleges to instil business flair in students.He added: “I see the problem as an absence of personal role models. In Scotland, there is a lack of local heroes in the business world. Most people here did not grow up in a family business environment, which is the inverse of what’s going on the US, and this bound to have an impact.“Look at Sir Tom Hunter. He often talks about growing up in a family business environment and about how the dinner table conversation was all about the day’s trading in his father’s business.“The key now must be education. There are plenty of colleges out there teaching business studies, but very few are teaching entrepreneurship.”A quarter of Scotland’s young businesspeople rely on their close family for funding and 14% go to other relatives for financial backing, the report also found. Mr Levie said this could be a source of problems, with twice as many business owners as in other nations looking to their families rather than professional advisors for help.He said: “Most of their family and friends have had no experience of running a business.“This raises questions about the quality of the advice they are receiving.”The report, which is part of world’s largest study of early-stage start-up activity, encourages the Scottish Government t fill the gap in “third-level education”.The report suggests that by implementing a comprehensive action plan, a rising level of disinterest could be addressed.

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