SME POLICY FORUM SCOTLAND’S EXPERIENCE
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Transcript of SME POLICY FORUM SCOTLAND’S EXPERIENCE
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SME POLICY FORUM
SCOTLAND’S EXPERIENCE
Professor David Deakins
Massey University
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Contents
• Key demographics
• Policy issues
• Enterprise policy in Scotland
• Ethnic minority enterprise as a case example
• Recent policy
• Conclusions
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Key Demographics
Population: 5.06 m. 2001 Census, 5.41 m. 2009
Age Structure
Area: 78,772 km2 Population density 64 per km2
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Age Structure
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Geographical Distribution
Population density by area (Persons per km2)
Source: GROS 2006 locality estimates.
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Ethnicity
All people
White Indian Pakistani & other S. Asian
Chinese
Other
5062011 4960334
15037 39970 16310 30360
100% 97.99% 0.30% 0.79% 0.32% 0.60%
Source: Scottish Census GROS (www.scrol.gov.uk)
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Key Economic Data
Birth rate 10.7 per 000
Death rate 11.0 per 000
Net migration rate + 4.1 per 000
Population growth rate 0.4%
Life expectancy M 74.2; F 79.3
GVA per head £19,152 (2007 est.)
Average gross weekly wage
£461.8 (2008)
Top exports Food/drink/chemicals/wholesale/retail/tourism/bus services/manf.
Destination for exports EU/North America
No of businesses (2008)
154,840 registered282,330 est. total
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Size Distribution of Enterprises (2008)
Size Number Total Scottish
Employment
Turnover £m
0-49 employees
276,325 780,510 £63.1
50 to 249 employees
3,600 254, 930 £27.9
250 or more employees
2,405 1,506,310 £152,334
Source: Scottish Government, ONS (IDBR)
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Policy Issues: Two Agencies
1. Scottish Enterprise (SE): regional development agency covering Central Belt and South of Scotland
2. Highlands and Islands Enterprise (HIE)
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Scotland’s Enterprise Support Agencies
Scottish Enterprise
Highlands and Islands Enterprise
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Policy Issues
• Low Business Birth Rate or entrepreneurial activity rates compared to rest of UK (c. 50% of rates in London, GEM 2008 TEA for Scotland = 4.5, compared to 5.6 for UK)
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Business Birth Rates UK Regions (2006)
Source: Scottish Enterprise, BIS
VAT registrations per 10,000 adults, 2006
0
10
20
30
40
50
60London
S E
ast
East
S W
est
E M
idla
nds
W M
idla
nds
N I
rela
nd
N W
est
York
s/H
um
ber
Scotland
Wale
s
Nort
h E
ast
UK
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Policy Issues
• Low Business Birth Rate or entrepreneurial activity rates compared to rest of UK (c. 50% of rates in London, GEM 2008 TEA for Scotland = 4.5, compared to 5.6 for UK)
• Reliance on traditional, but declining manufacturing sectors, particularly in the Central Belt
• Declining natural resources; e.g., North Sea oil and gas
• World class scientific research centres, but historically low rates of commercial spin-outs
• Rural enterprise: large rural areas in Highlands and Islands and in the South of Scotland
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Scotland’s Economic Performance
Low growth economy
“For over 30 years, Scotland has suffered because our economy has been locked into a low growth economy”Government Economic Strategy (2009), Scottish Government
“From 1975 to 2005, Scotland’s annual average growth in GDP was 1.8%, compared to a UK average of 2.3% over the same period”. Innovation for Scotland Report (2009), Scottish Government
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Enterprise Policy in Scotland
The Business Birth Rate Strategy (SE) 1993-2003
Volume v targeted support (HIE v SE)
Business networks (SE and HIE): Entrepreneurial ExchangeLINC Scotland
Commercialisation Strategy (SE) 1995 ---
Women’s Enterprise (SE and HIE): National Unit for Women’s Enterprise 2005--
Enterprise Education programme: Determined to Succeed
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Ethnic Minority Enterprise as a Case Example
• Scottish Government commissioned national scoping study 2005
• Methodology
• Demographics guided research
• Map MEBs geographical and sectoral distribution in Scotland compared to a white control group
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Self-Employment Rates for all Scotland (Per Cent)
0 5 1 0 1 5 2 0 2 5 3 0
A l l
P a k is ta n i
C h in e s e
In d ia n
B a n g la d e s h i
C a r ib b e a n
A fr ic a n
Source: 2001 Census Analysis: General Register Office for Scotland
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Self-Employment Rates for Glasgow (Per Cent)
0 5 10 15 20 25
All
African
Bangladeshi
Caribbean
Chinese
Indian
Pakistani
Source: 2001 Census Analysis: General Register Office for Scotland
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Self-Employment Rates for Edinburgh (Per Cent)
0 5 10 15 20 25 30 35
All
African
Caribbean
Bangladeshi
Chinese
Indian
Pakistani
Source: 2001 Census Analysis: General Register Office for Scotland
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Self-Employment Rates for Highland Scotland including Western Isles and Orkney & Shetland (Per Cent)
0 5 10 15 20 25 30 35
All
African
Bangladeshi
Caribbean
Chinese
Indian
Pakistani
Source: 2001 Census Analysis: General Register Office for Scotland
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Selected Key Findings
• Strength and diversity of ethnic minority enterprise in Scotland –, 4,500 businesses contributed upwards £1 billion to GDP
• Concentration by sector and location but key contribution outside cities in Central Belt and rural areas
• Innovation and resourcefulness of MEB owners
• Diversity a source of creativity and innovation
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Selected Key Findings
• Low access to formal sources of finance
• Lack of trusted intermediaries between banks and MEB communities
• Lack of engagement with formal mainstream sources of advice and support and a low take-up of training. This includes:
-----------lack of awareness-----------strategies to avoid engagement
• Requires strategies to build trust
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Policy Response
• SE and HIE Strategy to engage with ethnic minority businesses
-----engage with communities------support for access to finance------ethnic media and communication
• Scottish Institute for Minority Enterprise –owned and driven by ethnic minority business owners
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Recent Policy
• Removing barriers
• Scottish Co-investment Fund• Scottish Seed Fund• Scottish Venture Fund
• Supporting Innovation (R&D Grants, Innovation Vouchers)
• Innovation Strategy, June 2009
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Supporting Growth Firms
• Standard business support through Business Gateway (now devolved from Scottish Enterprise to the local authorities/councils)
• Targeted support for ‘growth firms’ by SE (but less so by HIE due to rural environment)
SE criteria (2009) : - £5m valuation by end of year 3,
- commitment to trade globally, - passion to succeed
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Conclusions
• SMEs have raised awareness of enterprise agencies, but still dependent on support delivered now by local councils
• Finance initiatives have been more successful, especially local micro-credit, LINC Scotland and Co-investment Fund
• Gaps still exist: KT in rural areas/ethnic minority support
• Frequent changes in policy –lack of consistency
• Disparities in support, funding and investment