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The Entrepreneurial Exchange

Opportunity Knocks In Growing Markets

Scotland is rediscovering its enterprising spirit. The number of business start-ups is at its highest ever: more than 8,000 new ventures started in the three months to the end of June, according to the Committee of Scottish Clearing Bankers. Growth among more established businesses is steady across a range of sectors, from manufacturing and technology to services and the creative industries.

This new-found entrepreneurial energy is thanks to a number of factors. Lower operating costs than in England and Scotland's base of good universities producing well qualified graduates, especially engineers, are attractive to entrepreneurs.

The arrival of skilled migrants from the rest of the UK, continental Europe and beyond is also part of the answer. Not only are they reversing the country's formerly downward population trend, they are also bringing fresh ideas, says Neil MacCallum of the Scottish Chambers of Commerce. "Immigration is becoming an increasingly important resource. Skilled migrants are filling skills gaps but they are also starting to break away and start their own businesses."

According to Dr Jonathan Levie, of Glasgow's Hunter Centre for Entrepreneurship, 11% of migrants from the UK and 9% of immigrants from the rest of the world are trying to start or actively running new businesses in Scotland, compared with 4% of locals. All this activity is bearing fruit in the form of sustained economic growth across many sectors and Scottish regions, he says.

"The services and creative industries have done well, especially software and media. We're holding our own in technology, while oil and gas and related services have been strong. Industry and manufacturing have declined in relative terms in recent years, although there's still a lot of activity here."

A sector that has lost out significantly is the electronics industry. It has shed 20,000 jobs, mostly to Asia and eastern Europe, says Levie. "It's the one thing that really stands out in the past 10 years. Rather than assembly and manufacturing work, we are having to rely more and more on our own brains and knowledge."

MacCallum says the Scottish executive elected in May seems to be responding well to this challenge: "We've seen some encouraging signs a hundred days into the new executive. Its new skills strategy chimes with our proposals and it is reviewing the way our enterprise networks work here, which we think needs overhauling."

Other trends are a cause for concern, not least the access new businesses have to finance in Scotland, says Levie. "Venture capitalists do tend to be very southeast-centric, so we have to work hard to get them up here as well as to create alternative sources of finance."

One of the big pluses of being an ambitious entrepreneur in Scotland, however, is the quality of the networks they form, adds Levie. "It is one of the things that sets Scotland apart. Within a very short amount of time you can be rubbing shoulders with the top entrepreneurs in the country and sharing in their knowledge and experience."

Such networks have helped transform Scottish business, says John Anderson, chief executive of the Entrepreneurial Exchange: "Ten years ago entrepreneurs needed to shout about what they achieved because the culture around business and success was so negative. It used to be the case that if you succeeded, it must have been at somebody else's expense. The culture has changed dramatically since then and that's partly down to what the networks have been doing."

Andrew Stone

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