Why is this National Indicator important?
Any increase in the business stock is a good indicator of an active entrepreneurship climate in the economy. Also, competition drives innovation, efficiency and quality improvements thereby improving productivity. The number of businesses in Scotland (stock) reflects a combination of both the numbers of new businesses created (start-ups) and the survival of existing businesses. Historically, Scotland has lagged behind the UK in terms of start-ups and has a low level of business stock relative to its population size. A strong private sector is essential for economic growth and wealth creation, and small businesses - which account for 98% of all enterprises - create vital jobs and are often the lifeblood of local communities. That's why a fundamental aim of Government is to improve the business creation, sustainability and growth of small businesses in Scotland.
The provision of good quality support and assistance will remain crucial. But, in the longer term, real improvements in our cultural approach to entrepreneurship and enterprise will provide the greatest and most long lasting benefits. The Curriculum for Excellence enables young learners in schools to develop a knowledge and practical understanding of the world of work including entrepreneurship. Also, the exposure of students in Further and Higher Education to entrepreneurship and the enterprise experience will increase the prospect of graduates forming new businesses and introducing new products and ideas to the marketplace.
What will influence this National Indicator?
Business formation and sustainable growth is determined by a number of factors, including:
- General economic conditions: a stronger economy leads to a greater demand for products and services, providing both domestic and export opportunities for new enterprises to supply. A strong and stable economy also increases optimism in the future and the chance of a new business succeeding
- Effective regulation: effective proportionate and targeted regulation creates a stable and supportive business environment, making the start-up process - and subsequent stages of development and growth - simpler and more attractive to potential entrepreneurs
- Access to finance: businesses require finance and investment to set up and grow
- Entrepreneurial attitude: the attitude of the Scottish population towards entrepreneurialism influences new business formation. The greater the spirit of entrepreneurialism, more businesses will be started.
What is the Government's role?
Increasing sustainable economic growth is the Scottish Government's (SG) top priority. The Government's role is to ensure that the conditions are right for the creation of new businesses, and for existing businesses to thrive and grow in order to help Scotland's economy become more productive and prosperous.
The Business Gateway (BG) provides support including start-up training, business advice and details of financial support available. The local delivery of the BG is managed by local authorities, ensuring better integration with other services local authorities deliver relevant to business. SG is working with COSLA on the shape of the future BG service, including the potential for greater pre-start support and aftercare provision.
Scottish Enterprise and Highlands and Islands Enterprise now focus their support on the areas where they can have the most economic impact - investment and innovation by companies and sectors which have growth potential and are of national or regional significance. In addition, the Scottish Investment Bank, with private sector partners, invests equity in early stage innovative technology based businesses with growth ambitions.
How is Scotland performing?
There was an increase in the registered business stock rate up to a peak in 2008, however, since then the business stock rate has been decreasing. The latest rate of 356 businesses per 10,000 adults in 2010 is a reduction compared with the 2009 rate of 361 businesses per 10,000 adults.
The data for this chart is available at the bottom of the page
Source: Scottish Corporate Sector Statistics 2011, Scottish Government, for registered enterprise counts. Mid-year poopulation estimates, National Records of Scotland, for 16+ population estimates.
Criteria for recent change
The evaluation is based on: any difference within +/- 4 businesses per 10,000 population of last year's figure suggests that the position is more likely to be maintaining than showing any change. An increase of 4 businesses per 10,000 population or more suggests the position is improving; whereas a decrease of 4 businesses per 10,000 population or more suggests the position is worsening.
Further Information
For information on general methodological approach, please click here.
Scotland Performs Technical Note
Who are our partners?
Local Authorities
Scottish Enterprise
Highlands and Islands Enterprise
Related Strategic Objectives
Wealthier and Fairer