Supporting Entrepreneurship

Rhoda's Speech in the Scottish Parliament debate

23 January 2019

Scotland has a long history of entrepreneurship. Unfortunately, most of it is historic.

We need to lay again the foundation that encourages that entrepreneurial spirit.

Although there is little to disagree with in the Government motion, statements of intent do not really build the foundations that we need in order to thrive.

A couple of years ago, I attended the Commonwealth Parliamentary Association women’s conference that looked at women in business.

A number of women addressed the conference and talked about their own experiences.

For the most part, they had gone into business because circumstances forced them to.

It was the difficulty of finding work that fitted around caring responsibilities that drove them to set up their own businesses.

They were driven not by a career choice or a burning ambition but by what they needed to do to survive.

Women’s Enterprise Scotland published a report highlighting the barriers faced by women entrepreneurs.

Its recommendations pointed to the in-built inequality in the way in which support is provided, which means that women are underrepresented in the sector.

That is detrimental to women and to our economy as a whole.

Some of the issues that WES raises are amplified by others, such as the FSB, as being true throughout the sector.

They include, for example, the fragmentation of support and the missing middle: the transition between business gateway and the enterprise sector.

I have constituents who find themselves being passed back and forth between different organisations because the help available from one is quite different from that available from another; many businesses fall between all of them.

Businesses need seamless support.

When companies are trading successfully, they become vulnerable to takeover from larger organisations that can grow the business.

That indicates that there is a risk factor for companies looking to take the next step to grow and export, and that they need support at that point.

The loss of ownership of those companies damages our economy.

They often become part of larger multinationals, so we lose much of the wealth that they create in taxes as well as their income.

If we are to maximise the benefits of entrepreneurship, we need to encourage, grow and nurture those companies, but the system does not do that seamlessly.

In addition, the support available is not always suitable.

Enterprise companies tend to focus help on account managed companies, which fit a narrow definition, while other potentially successful businesses get little or no support.

We need to be more open to different business models.

Again, the support for those can be fragmented.

Co-operatives and social enterprises spread risk while providing employment and economic benefit, but their economic impact is sometimes overlooked and they do not get the support that they require.

Gillian Martin: Does Rhoda Grant agree that some of the issues around business support involve looking for too fast a growth and that woman-led businesses tend to be more about sustainable, long-term growth?

Rhoda :

Yes, I agree with that. However, there are also gaps in the support provided, and that is most likely to be felt by women.

As I said, the economic impact of co-ops and social enterprises is sometimes overlooked.

Although there are expert organisations that can help them, co-ops and social enterprises also need mainstream support that understands and encourages that form of entrepreneurship, supports them and signposts them to those expert organisations where necessary.

The same is true of sole traders.

In many rural areas, there is not the opportunity to grow a business, because it is about filling a local niche.

Those businesses are a crucial economic driver in rural communities and, if they fail, there is a detrimental impact on the wider economy.

However, those businesses are often overlooked because of their inability to grow.

In addition, as my colleague Daniel Johnson said in an intervention, there are the falling enterprise company budgets.

It is therefore difficult to see how the Scottish Government is supporting entrepreneurs.

The Conservative amendment talks about Scottish economic growth underperforming against that of the rest of the UK, and we agree with that point.

However, we do not agree that fairer taxation discourages entrepreneurs; indeed, we believe the opposite. Austerity damages our economy and business opportunities for entrepreneurs. It holds our economy back, and those who bear the brunt of that are the least well-off in our society.

Therefore, we cannot support the Conservative amendment.

The Deputy Presiding Officer: You must close, please.

Rhoda :

However, austerity handed down from the UK Government cannot explain the difference between the Scottish economy and the economy of the rest of the UK.

Yes, there is the uncertainty of Brexit, but that is shared throughout the UK.

The Deputy Presiding Officer: You must close, please, Ms Grant.

Rhoda : Indyref 2 would give more uncertainty to Scotland.

I move amendment S5M-15507.2, to insert at end

“; notes the report from Women’s Enterprise Scotland highlighting barriers for women entrepreneurs getting support; further notes concerns about the fragmentation of support for start-up businesses, especially for social enterprises, worker co-operatives and sole traders, while budgets for Scottish Enterprise and Highlands and Islands Enterprise decrease, and calls on the Scottish Government to provide streamlined support to business start-ups and to ensure that such support should continue in order to discourage successful businesses being bought over, rather than grown rooted in the Scottish economy.”

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