200,000 now self-employed
Call to build more businesses in poorer areas
The study reveals that smaller, wealthier, rural towns in the north half of Scotland are more likely to have high levels of self-employment.
Conversely people living in poorer towns elsewhere in the country – especially those that used to have a large industrial employer – have much lower levels of self-employment.
Further, towns that currently have one large employer, like St Andrews, also have a low proportion of people who work for themselves.
The Federation of Small Businesses says the research points to the need for more help in poorer areas to encourage people to launch businesses.
Andy Willox (pictured), FSB’s Scottish policy convenor, said: “The great differences we see in levels of self-employment across Scotland tell a story about the country we live in.
“This data shows the most successful local communities have high numbers of people who are their own boss.
“Unsurprisingly, popular tourist destinations are awash with smaller firms. Scotland’s market towns still have thriving business communities too.
“We find high levels of unemployment and low self-employment in towns that bear the scars of Scotland’s industrial decline, suggesting that poverty is a barrier to self-employment and the social mobility that comes with it.
“Research shows that you’re less likely to set up on your own if you have few skills; have little in the way of cash reserves; if you don’t have a car or own your home.”
There are now more than 200,000 Scottish people who are self-employed – more than the number of people who work for the NHS or Scottish local authorities.
Andy Willox said: “Big business and public sector downsizings, alongside new business models powered by digital technology, have resulted in a steady increase in the number of Scots self-employed.
“This trend is not exclusive to Scotland, but it’s something to which we need to adapt. Our response should be to support, not pity, those who choose to work for themselves.
“We need to get behind those people and places that want to change their circumstances. Boosting self-employment and business activity could help to turn around some of Scotland’s most disadvantaged places.”
FSB has produced a five point plan to boost entrepreneurship in post-industrial Scotland and better support those that work for themselves across the country:
Social security and income protection: The Scottish Government should use their new social security powers to provide extra maternity, paternity and adoption support for the self-employed. The Scottish Government should work with the insurance industry to help develop an affordable income protection product.
Enterprise education: The Scottish Government should deliver the SNP’s manifesto commitment to educate every child about running a business.
Utilising empty property: Scotland’s 32 councils should offer their long-term vacant property for free to local business start-ups.
Asking more of universities and colleges: The Scottish Funding Council should allocate extra funding to universities and colleges who successfully help graduates to establish businesses.
Getting enterprise support working properly: The next stage of the Scottish Government’s enterprise and skills review should look at the barriers to establishing a business in post-industrial Scotland. The newly launched – and FSB supported – Scottish Microfinance Fund may wish to target help in these areas.