Meeting of the Parliament 04 June 2025
I welcome the fact that we are having another debate on the economy. We now have something of a trend of economy debates, which is a welcome departure from the previous state of affairs, when we would go for long periods without discussing Scotland’s economic performance. That is a good change on the part of the Government. Today’s focus on entrepreneurship and innovation is welcome, so I am delighted to be here.
Before I come to what needs to be done, I want to start by looking at the Scottish Government’s track record, given that it has been in power in Scotland for some 18 years. The fact is that, throughout that period, Scotland’s business start-up rate has consistently lagged behind that of the UK as a whole. According to the latest figures, which are from 2024, Scotland has a business stock of 762 businesses per 10,000 adults. The UK average is 996, so we are lagging far behind. That gap is particularly stark among the smallest businesses, where the figure is 738 per 10,000 adults for the UK but just 544 per 10,000 adults for Scotland. It is clear that we have a systemic issue whereby Scotland’s level of private sector business activity is lower than the UK average.
According to last year’s Global Entrepreneurship Monitor report for Scotland, Scotland’s total early-stage entrepreneurial activity, which is known as the TEA rate, was the lowest in the UK nations in 2023. The overall TEA rate for the UK was 10.7, Scotland’s was 9.1, Wales’s was 11.5—it was doing very well—England’s was 10.1 and Northern Ireland’s was 9.7.
On all those measures, Scotland lags behind, so we welcome any initiatives to improve the rate of entrepreneurship and the rate of business start-up, so that they at least match the levels that we see elsewhere in the UK.
We know that there are particular sectors of society in which we have issues in encouraging people to start up a business. That is particularly the case with women and members of ethnic minority groups, as the Deputy First Minister acknowledged. I pay tribute to the work that Women’s Enterprise Scotland does in offering support, particularly mentoring and the promotion of role models for women who wish to set up and be involved in business.
If the Scottish Government wants to encourage entrepreneurship and innovation, a really good starting point would be to listen to entrepreneurs, and Scotland has no more high-profile an example of a successful entrepreneur than Sir Tom Hunter. If the cabinet secretary has not read the report on how we might encourage economic growth that was published by the Hunter Foundation just a few weeks ago, I encourage her to do so.
The Hunter Foundation and Oxford Economics together highlight the success of Singapore—a small economy with few natural resources that is, in many ways, in a much less privileged position than Scotland—as an example from which we could learn lessons. Singapore is a country with a strong innovation ecosystem, significant investment in education and lifelong learning to help build a skilled and employable workforce, and a long-term strategy.