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Women are starting and running new businesses at virtually the same rate as men for the first time, while one in five entrepreneurs are non-white, according to new analysis of entrepreneurship activity in Scotland.

The Global Entrepreneurship Monitor (GEM) report, compiled by the universities of Edinburgh, Glasgow and Strathclyde, found 8.6% of working-age women were actively engaged in setting up a business or already running an enterprise in 2023, slightly lower than men at 9.8%, a difference which is not statistically significant.

Globally, GEM finds that the female to male gap in entrepreneurship rates is narrowing, but Scotland appears to lead the way on this measure.

Rates amongst the non-white population in Scotland also reached a new high of 24.1% – one in five of the country’s estimated 300,000 working-age population of 3.3 million 18-64-year-olds – engaged in early-stage entrepreneurial activity.

At 9.1% Scotland’s overall ‘total early-stage entrepreneurial activity’ (TEA) rate, however, remains the lowest amongst the nations of the UK.

The GEM report surveyed 2,060 adults in Scotland and 40 entrepreneurship experts, as part of the wider UK and global reports.

The Scottish poll found significant regional differences in TEA rates amongst men and women, with the North East having the lowest level of activity by women (9.6%) - at almost half the rate of men (18.6%) - whilst women had higher levels than men in Southern Scotland at 8% against 6.5%.

Among the Home Nations, Scotland’s TEA rate was nominally the lowest in 2023. Wales returned the highest TEA rate at 11.5% with England second at 10.8%, and Northern Ireland recording a TEA of 9.7%

Fear of failure remains a significant barrier to entrepreneurial activity in Scotland; while a third of Scots perceive good start-up opportunities in their area, more than 60% say a fear of failure would prevent them for establishing a business.

In addition, the entrepreneurship experts canvassed by the GEM survey rated 12 out of 13 conditions for entrepreneurialism in Scotland as ‘barely satisfactory’. These included entrepreneurial education in school, ease of financing, government policies and research and development transfer.

Professor Sreevas Sahasranamam, of the University of Glasgow's Adam Smith Business School, said: “Over the past three years, early-stage entrepreneurial rate in Scotland has settled at around 10 percent of the population – broadly similar in the last three years since COVID-19.

“However, it is worth highlighting that a panel of entrepreneurship experts judged the context for entrepreneurship in Scotland to be generally mediocre, with the level of support for women’s entrepreneurship worryingly evaluated as less than satisfactory scoring under three out of ten.”

Dr Samuel Mwaura, of the University of Edinburgh Business School, said: “The two major developments in 2023 are the record high rates for non-white individuals and women, reflecting a growing diversity amongst the countries business community.

“Effectively, of the 300,000 or so early-stage entrepreneurs setting up a business in Scotland in 2023, roughly half were women. This is a landmark moment of significant consequence for female entrepreneurship discourse and policy in this country.

Professor Stathis Tapinos of Strathclyde Business School at the University of Strathclyde, said: “While Scotland reached new milestones with female and minority ethnic early-stage entrepreneurial activity, concerns remain around rates of established business, fear of failure, and the general context for entrepreneurship in Scotland with worrying evaluations by the expert panel.

“Understanding these and other issues related to entrepreneurial attitudes, perceptions and activity in the country is important for policy and practice as entrepreneurship has important implications for the economy and many societal dynamics.”

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Related links

• Global Entrepreneurship Monitor (GEM) - Global Report
• Sreevas Sahasranamam
• Adam Smith Business School

First published: 23 July 2024