Immigrant-led businesses’ £13 billion contribution to Scotland

One in ten smaller businesses in Scotland is led by an immigrant entrepreneur and these firms contribute more than £13 billion to the Scottish economy and provide 107,000 jobs, according to a ground-breaking report.

The Federation of Small Businesses (FSB) commissioned the Hunter Centre at the University of Strathclyde to look at the contribution of migrant entrepreneurs. The academics found that about half (47%) of the 222,520 people starting in business in 2017 had moved to or around Scotland.

According to the report – called ‘Starting Over: Migrant Entrepreneurship in Scotland’ – in 2017, 37,339 people from elsewhere in the UK chose Scotland to start up in business, while 17,567 Scots who have lived overseas chose to kick off their enterprise north of the border. Over the same period, 18,416 people born outside the UK were trying to establish their own Scottish business.

The research finds that all migrants – which includes immigrants from outside the UK, but also migrants born elsewhere in the UK, returnee Scots and people who have moved within Scotland – are more likely to start a business. People who moved to Scotland but were born elsewhere in the UK are 67 per cent more likely to start a business than non-migrant Scots.

The FSB is calling for new specialist support for immigrant business owners, whom the report finds can have limited contact with Scotland’s enterprise support bodies. Further, the small business campaign group is calling for action to attract more people – from the rest of the UK and the rest of the world – to start up in Scotland.

Around half of Scotland’s immigrant entrepreneurs are located in Edinburgh, Glasgow or Aberdeen, but the report highlights that immigrants in rural Scotland are more likely to be self-employed or run their own business.

Launching the report, Andrew McRae FSB’s Scotland policy chair, said: “This research shows that Scotland is home to entrepreneurs from all corners of the world and these people are making a huge contribution to Scotland’s economy.

“No matter whether they’re from England, Estonia or Ethiopia, what’s clear is that when someone moves to a new place they bring new perspectives and business ideas. Scotland needs more of this sort of insight and drive.

“Policymakers need to make sure that we give all start-ups the best chance to succeed. But this research found particularly poor links between immigrant entrepreneurs and the public bodies charged with giving them a hand. This is a problem which needs addressed.

“While we need to see more Scots choose to start-up, we should also try and make our country a hub for those with the determination to succeed. That includes persuading those from elsewhere in the UK that Scotland is the ideal location for their business venture.”

Dr Samuel Mwaura, corresponding author of the report at the Hunter Centre for Entrepreneurship at the University of Strathclyde, said: “This is the first piece of research looking specifically at the contributions migration and entrepreneurship make to Scotland.

“The overall picture that emerges is that migration – including overseas immigrants, in-migrants from elsewhere in the UK, and Scottish returnee emigrants – is associated with skilled, ambitious individuals with higher than average levels of entrepreneurialism.”

The study finds that migrants are more likely to have postgraduate qualifications, family business experience, export ambitions and higher growth ambitions. Further, the research underlined that Scotland has the highest proportion of university-educated migrants in the EU.

Andrew McRae added: “At the FSB, we firmly believe that migrant entrepreneurs make Scotland a better place in which to work and live. They help us bridge gaps between us and the rest of the world.”