National Economic Forum: March 2022

Host: Kate Forbes MSP, Cabinet Secretary for Finance and the Economy

Facilitator: Sean McGrath, CEO, Entrepreneurial Scotland

Scribe: Ellen Black, Scottish Government

Summary

Delegates discussed how Scotland could build a more vibrant entrepreneurial culture and considered existing barriers and potential solutions.

Introduction and background

The session was opened by outlining the importance of taking action and building on existing momentum, following the recent publication of the National Strategy for Economic Transformation.

Entrepreneurial people and culture underpins several key Scottish Government initiatives including the National Strategy for Economic Transformation (NSET), the Scottish Technology Ecosystem Review (STER), and the ongoing Women in Enterprise Review. The entrepreneurship chapter of the NSET makes 19 recommendations across 4 projects.

In order to successfully deliver the recommendations of the above initiatives, delegates were asked to consider whether they believed structural change was required, or, whether a change in mind-set and culture could create a more entrepreneurial Scotland.

Topics discussed

Commitment to transformation

Delegates believed that the Scottish Government and Scottish businesses had a genuine commitment to transform the Scottish economy. Potential barriers to achieving this ambition were identified as a fear of failure and the substantial pressure felt by businesses. It was acknowledged that it is hard to be ambitious, take a long-term view, or take risks when under pressure.

Culture of change

Delegates highlighted that entrepreneurship is a mind-set and can be defined more widely than only people starting businesses. Entrepreneurship was acknowledged to have significant transformational power, particularly for social mobility and young people. However, in order to become entrepreneurs, young people need to consider entrepreneurship to be equitable with a university degree or apprenticeship. A mentoring programme was suggested to promote entrepreneurship to young people. Delegates also believed that bringing people out of their comfort zone and familiar surroundings encourages innovation.

Delegates argued that the economy may need rebalanced in order to grow and affect cultural change. The majority of businesses are SMEs, but it was argued that there is a lack of understanding of the different support needed by different types of SMEs. For example, the Scottish Technology Ecosystem Review only focusses on one area – technology. A balanced ecosystem needs a variety of industries and types of business, each with influence.

Creating a larger and more diverse pool of investors was suggested by delegates as a way to further a cultural change. It was felt that currently the pool of investors often featured the same people. Accelerator programmes, mentoring, and coaching, were all discussed as ways of furthering a mind-set change.

It was also argued that the entrepreneurial ecosystem in Scotland was not fully collaborative and that better collaboration would allow for a more vibrant start-up culture. Delegates felt that government could better connect entrepreneurs with resources. It was agreed that collaboration was key to successfully delivering the recommendations of the NSET and STER reports.

Barriers to entrepreneurship in Scotland

Delegates believed that Scotland was excellent at innovation but not as strong on the commercialisation of ideas or businesses. It was suggested that some university spin-outs could be used as a model of good practice.

A lack of publically accessible data on entrepreneurship in Scotland was raised as a barrier to scaling existing businesses and attracting investment, particularly international investment. Better data would allow government to build stronger metrics around entrepreneurship and track businesses in Scotland. It was proposed that a shared database could be created for all enterprise agencies in Scotland.

Delegates felt that Scotland needed a stronger entrepreneurial national narrative in order to sell ourselves internally and internationally. Confidence was highlighted as a factor underpinning self-belief and ambition. Delegates believed that there was no shortage of talent in Scotland, but that it could be showcased better. Areas of success should be celebrated publically and loudly to help build confidence within Scotland and internationally. It was suggested that a website could be created to highlight and celebrate success stories of entrepreneurship in Scotland.

Delegates also highlighted that due diligence processes in Scotland can cause difficulties for start-ups.

Closing comments

Delegates suggested that a change in mind-set and culture would lead to Scotland to becoming a more entrepreneurial nation. In particular, building a strong national narrative would increase confidence, and therefore, the number of start-ups and amount of investment. Clearer publically available data on businesses in Scotland would also further build confidence and allow for greater, and potentially more diverse, investment. Robust data would also allow government to build stronger metrics around entrepreneurship. It was agreed that collaboration between private, public, and third sector organisations would be essential to deliver change.