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Douglas
You definitly can't leave out the independence question, both at personal and polity levels. I am struck by the contrast between the freedom which the "Non-Scots" entrepreneurs enjoyed in the more open and egalitarian Scottish society of the turn of the 1700s compared to the closed and heirachical "society" in England at the time. The position of the Quakers then and their response in the founding of businesses such as Fry's and Cadbury's is also germain. As also is the contrast between the hermetically closed fiefdoms of the Labour West with the present "openness" of society in England, which is almost at a "greed is good" level. If an entrepreneur cannot get social recognition from her efforts, she won't try. She will look at how Soutar and Wood are treated by the MSM and not bother.
At the macro, political level, it is pretty obvious that as a British government has been pushing British solutions to this problem on us for decades, as you so rightly point out, then the British "solution" is wrong. What may suit London and the South East, such as extensive immigration, does not suit us all and we should find a solution of our own for our own Scottish society. Calman was wrong to have ignored the impact of the British social system on the Scottish body politic but was at least stating a truth when it averred that it was a key component of the (mythical?) British society. "Full fiscal autonomy" without the ability to alter the social structure that "devo max" would bring is destined to be yet another sticking plaster on the running sore that is Scotlands present state after 300 years in this unequal Union.

And should you wish to ignore my analysis above, consider the political problems of the Belgians and the social rigidity of Japan. Curious that they should be the two "independent nations" with a worse problem than the British region known as Scotland.

The big problem in Scotland for budding entrepeneurs, heck even businessmen who dare put their head above the parapet is that the locals love to see them fail..... "Knew it wouldn't last", "serve's him right, gettin above himself" & so on & so forth.
Deep down & sometimes not so deep there is a resentment towards people who strive to get above & beyond themselves. Whilst in other countries these personal goals would be seen as a good thing in Scotland especially in the smaller towns people are desparate for everyone to fail.
As for Government aid - that is only there to help out Overseas companies!!! A small business looking to expand - You might as well try & get a straight answer from a local council official....

It is not about independance or lack of it. It is about a lack of support within the community - The NATS have to stop blaming any and all personal, social & business shortcomings on the Tories, the UK, London & everyone else. Sometimes it is just Scotlands fault - as a Nation there is quite often a bitterness towards anyone willing to better themselves.
The reason we are rubbish at football is not David Camerons fault - we lack about 8 decent players, the reason you got dumped on Saturday night is not Londons fault - your girlfriend knows about you trying it on with her mate, the reason you got sacked on Friday is not because we are part of the UK its because you have been sneaking off to play golf & claiming you are ill....

Anyway Monday morning rant aside from your blog sounds like the smart thing to do is head to Sweden!!!!

"So perhaps one solution to Scotland's low business start-up rate is a controversial one - more immigration." - Douglas

I think that using immigration is the wrong way to solve our problem, at least on any significant scale. This would amount to an extension of our often throwaway society from packaging, electrical goods and cars, to ourselves: in other words, if people can't do something, replace them with someone else.

This is wrong.

When we, as a country (Scotland) need to develop skills, we should make an honest effort to encourage, educate and train our own people first, before dumping them and bringing in others. The former strategy will help to maintain our sense of community and generate the best type of loyalty from the people who already live here. (Even if they need to be pushed/encouraged a lot, this is often how parents get their children to learn skills which they greatly appreciate later in life).

Dump people for others and they will still be here, but with fewer skills to contribute to our country. They will also be more dependent on the state for work or benefits, less happy, less valued, more likely to live poorly, and less healthy. (This is all around us).

Training in business and entrepreneurial skills should be encouraged from early school days.

Education, education, education!

I am perplexed by handclapping's analysis. First, the 1707 Act of Union was pushed in Scotland in no small measure by the entrepreneurial class, who were keen to see Scotland's finance recover from the failure of the Darien scheme through improved access to English and and English colonial markets. Although, as Dafoe noted, the immediate returns fell short of expectations, within 50 years the Scottish economy was benefitting significantly from the Union.
Secondly, handclapping is wrong in her analysis of what she terms the British "solution" to the problems of Scotland's economy. London and the south east thrive compared to the rest of the United Kingdom because Government involvement in the economy is considerably less than elsewhere. The Barnet formula, agreed for political reasons by the Callaghan Government as a sop to the Scottish nationalists, has provided a high degree of subsidy to the Scottish economy which has had the unwelcome side effect of creating a significant obstacle to entrepreneurship.
Thirdly, given that the current leader of the Scottish Executive has called for increased immigration to Scotland (a line not pushed by the Government in Westminster, and presumably prompted by a desire to balance the flow of Scots heading elsewhere in search of economic opportunities), it is clear that SNP at least believes that this is a solution to Scotland's ills.
Far more productive would be for Scotland to copy the example of London and the South East by creating a low tax low regulation economy in which entrepreneurs can thrive. How this can be dcne while its politics is dominated by socialist leaning parties more interested in peddling anti-Union messages than analysing problems largely of their own making remains to be seen.

NESTA is talking through its rear end again. Firstly, Aberdeen is a far more successful economy than Dundee because of the investment in the energy sector. However, most of that investment came in from overseas and especially Norway and the USA. UK investment in the energy sector supply side has been pathetically small and this resulted in most of the strategically critical, high tech and high value adding stuff being produced by overseas companies.

This tells us - as it has for decades - that actually the low company birth rate has little to do with a lack of entrepreneurs but the lack of availability of risk equity capital which is a consequence of the huge disconnect between the financial services sector and the rest of the real economy.

Hi Douglas

As someone who has recently started up a tourism related business I'd say there were a number of things that put people off

- the lack of help from government agencies - I tried speaking to a number of them for advice about a number of technical issues which they were unable to help with.

- the huge amount of red tape involved (bank accounts, setting up limited companies, taxation, VAT registration)

- the costs involved in setting up the business and the difficulty in accessing funding to support startups. It is difficult to know whether you approach Business Gateway, Scottish Enterprise or an industry specific body like Visitscotland

- the worry about whether you will make in any money after starting up your business - as well as the costs you don't make a huge amount of money for a while until the business has been trading for a while (I couldn't have done it without my wife working to support us)Going from a steady salary to an uncertain income is a big step.

- the attitude of suppliers to start ups (they view them with deep suspicion and adopt a cash on delivery mentality when dealing with them) which puts a lot of start ups out of business very quickly

- the lack of a mentoring scheme which you can turn to for advice. I had to find individuals by networking who knew about the type of business I was about to set up and put questions to them - it was those people rather than any government agencies who helped most in answering the practical questions I had about getting the business up and running

The government and others do moan about people not getting out there and starting up their own business, however, it is not an easy option and especially in times of recession a support network would be a great help to try and get businesses off the ground.

If Scotland were ever to look to become independent it would have to encourage more private enterprise to plug the gap in the economy left by the collapse in large scale manufacturing industry and a scaled down public sector. The problem is at the moment those in power don't seem to have the means or know how to do this and it really is up to individuals on their own to sort it out.

As you say it is a complex area but until Scotland as a whole starts to show a "can do" attitude when it comes to starting out in business we won't be the success we should be - and I'm an optimist there because I believe Scotland can be successful here.

Douglas
Please do not be misled by your commntator #5 Prospero. They are wrong on most counts.
1 The merchant classes mostly avoided the Darien scheme. It was the bunnet lairds that invested and stood to be wiped out and loose their status and so were desperate for any saviour. Do you think any self respecting merchant would have equipped their venture with the unsuitable goods that the Dariem scheme carried?
2 London and the South-East thrive from such Government non-involvement as the M25, Thameslink, the Dome, High Speed One, Crossrail, the Olympics.
3 I am not sure whether Prospero agrees with imigration as an answer; it does not appear in his/her analysis of the relative prosperity of London and the South East, but does seem to be assumed to be part of the Scottish problem in its counterpart, emigration.
4 I worry about the attention span of your correspondent in the assertion that 50 years of deficiency is the result of the last 3 years in which we have had a SNP minority government or even that of the last 11 years in which we have had a Scottish Parliament without the powers to take the action he/she recommends.

NESTA - 'National' but pronounces upon the UK, three (or, arguably, four) nations!

And as for Scots failing to chip in to help family and friends start up an enterprise, I refer readers to the truism that "a fool and his money are soon parted."

Since coming to power the Scottish Government have ensured Dundee has benefited from some financial support for both public and private sector.

In the past it was all about labour held strongholds that received jobs and money in a huge and undeniable bribing exercise.

I am never astonished but often dismayed at how overt the ³ÉÈËÂÛ̳ commentators are pro-unionist.

We are supposed to live in a democracy and despite paying our licence fee and voting for an SNP government we ree still fed unionist slants on almost eery story published on the ³ÉÈËÂÛ̳.

I have never really forgiven nor trusted the ³ÉÈËÂÛ̳ since pulling the plug on a true and representative talking point (Talk Scotland Forum) some years ago.

It happened to have a large number of people who supported independence and the ³ÉÈËÂÛ̳ could not stomach such talk on its pages.

Democracy Live? - I don't think so.

Comment no 7 says
"As someone who has recently started up a tourism related business I'd say there were a number of things that put people off

- the lack of help from government agencies - I tried speaking to a number of them for advice about a number of technical issues which they were unable to help with.

- the huge amount of red tape involved (bank accounts, setting up limited companies, taxation, VAT registration)

- the costs involved in setting up the business and the difficulty in accessing funding to support startups. It is difficult to know whether you approach Business Gateway, Scottish Enterprise or an industry specific body like Visitscotland"

Just look at all the cosy public sector jobs that the correspondent is paying for through his taxes and how useless they are at helping him!! And there is the problem. Why take any risks if there are lots of low risk, cosy public sector jobs available? Added to which there does seem to be a Scottish aversion to the private sector and success and profits (see comment 3) - Alex Salmond only ever talks about the private sector with disdain, as some sort of immoral money grabbing entity. And if all else fails then the English can be blamed. I suppose you could always nationalise and control everything, and eliminate the hated private sector and then you would have an economy like .......North Korea!!! Form a queue for the bread and milk....

Is it any wonder the entrepneour is discouraged, last October we applied for planning permission to site a snack bar trailer as an accompniment to our small passenger vessel operating at the Ardelve slip "Eilean Donan Castle" Highlands. We have now just recieved a verbal refusal nothing in writing as of yet, not even after 7 months. How useless the local goverment departments are, they have no interest in helping any start up buissiness. They are happy to take the fees, so as a conciquence certain parties are now left with no choice but to apply for pension credit instead of being able to earn there own living. What a Joke this country is.

[A good article - and a couple of good responses too. One about the cultural issues facing an entrepreneur, from jolomo, and a very good first hand account of practical issues of starting a business from awa_wi_ye (is that the name of your tourism business?)]
However, Douglas. Have you ever thought of going into business yourself? Mmm..not seriously? Well, your reasons probably answer your discussion question and are probably the same as most peoples; Scotland is a very conservative nation. Risk averse for years before that phrase was invented - the accumulation of wealth and property and stature is on a ratchet system here, for reasons which I cannot explain. Risking all (or a great deal) in a business venture is seen as foolhardy and certainly not commendable - and the corollary of that is the concept of schadenfreude. I worked in Silicon Valley - failure over there is not failure as we know it. And schadenfreude is not in their vocabularly - as irony is not in it either. It is also full of Scots in business. (immigrant mentality? - or just that the valueable people leave this country?)
Someone mentioned Soutar (and he is a great example because he made it at home from having Zilch) - I know him and was invited to a BBQ out his back garden; busy cooking away and talking away to young and old alike, he is a very normal guy. I couldn't help but look at him and think, "What makes you different from the average person that enabled you to create something so remarkable?". I have not got the answer, by the way. I'll ask him next time I see him.
Finally, I and a colleague approached our enterprise agency down at Quango Monolith on the Clyde, a couple of years ago with a hi-tech business proposal. OMG!: a series of increasing hurdles were put in place by 'risk averse' grocery clerks doing 'hot desking' and other cool stuff, until we both were spending more time and money (!) on the wrong activities. They didn't seem to care we eventually took an adverse reaction and dropped out...probably updated their glossy PowerPoint metrics though - so not all a waste of time. My sanguine takeaway at that time was it would be more efficient for the goverment to put its capital investment fund for start-ups into the private sector and let them handle the distribution.

The pessimistic article which prompted this discussion focused on the Global Entrepreneurship Monitor as an indicator of the dire future for Scotland. That same monitor has identified new Zealand, my home, as a hotbed of entrepreneurship. Unfortunately, GEM measures all entrepreneurship from high-growth companies with the potential to earn billions of export dollars/euros to mom-and-pop ventures which add little economic value. New Zealand's economy is sadly dominated by the latter. GEM data alone is not enough from which to predict a gloomy future for Scotland... fewer, higher value entrepreneurial ventures may deliver much more value to the economy. Similarly, the comments decrying the lack of government support also miss the point. Measures of the numbers of high-growth companies, and the quantum of government support for high-growth companies, would probably provide a better indicator of the state of innovation in Scotland than does GEM.

Scotland faces the double problem - too many public sector based jobs and insufficient small business activity & start ups - why not legislate that Councils and similar public bodies must progressively cease directly employing junior management and operatives and place contracts competitively with the private sector? If Councillors ensured the process was open and uncorrupted with brown envelopes we would kill a flock of birds with one stone.
(Incidentally - I'm a retired entrepreneur with many start ups behind me - including tendering and receiving many public sector contracts).

Hi Douglas,
Thanks for your excellent blog challenge.
I believe there is currently a major opportunity to address many of the issues raised in your article and the blog.
Firstly the mood music is strongly in favour of enterprises stepping up to deliver public services.
Secondly there is a need to create more start-ups by new entrepreneurs but who will have no track record and therefore would fail any competitive tender process.
A possible solution would be for existing enterprises/social enterprises/charities to compete for the business but the public sector could give priority to those who will wrap their support around a new entrepreneur and a commitment to an eventual spin-out and therefore a new business.
This would address some important barriers to entry of new entrepreneurs:
1. They are willing but don't have a good idea.
2. They have no business supporters in their existing networks
3. The financial risk is taken by an existing business and is more likely to gain financial support
Cheers, Highlandtrekkingman