Business development · 4 November 2015

Scotland flies the flag for entrepreneurialism with record number of private sector businesses

This figure from the Scottish government's chief statistician was the highest since the records began in 2000
This figure from the Scottish government’s chief statistician was the highest since the records began in 2000

The number of businesses operating in Scotland has reached a record high, with 361,345 private sector firms operating in March 2015. The biggest rise was among small traders.

This figure from the Scottish government’s chief statistician was the highest since the numbers started being gathered in 2000.

The total number of firms in Scotland has increased by more than 50 per cent in the 15 year period, rising by 121,375 businesses and an eight per cent rise on the numbers for 2014. Reasons given for the rise included the increase in IT and online employment, student startups and redundancy payments since the global economic crash being ploughed into new businesses.

The biggest rise for this year was among unregistered businesses – small traders who are not registered for VAT and PAYE – up 13.2 per cent on last year to 191,010 firms. The number of registered businesses also rose by 2.3 per cent to 170,335.

Looking at a longer-term period, the number of unregistered enterprises in Scotland had more than doubled since 2000, up from 91,305 to 191,010 firms.

There were 359,050 small and medium-sized businesses operating in Scotland, providing an estimated 1.2m jobs, and these SMEs accounted for 99.4 per cent of all private sector enterprises, 55.6 per cent of private sector employment and 39.4 per cent of private sector turnover.

The report said that since the recession there has been a slight shift in employment from large businesses employing over 250 employees, to smaller businesses, which is reflected in the record number of firms. In 2015, large companies accounted for 44.4 per cent of private sector employment, compared to 47.1 per cent in 2010.

The FSB’s Colin Borland said this reflected “more and more Scots are taking the plunge and going it alone”, though it wasn’t just a story about the march of the one man bands.

“We have also seen an increase in the number of businesses who are employing staff or trading above the VAT threshold. If we’re serious about driving social mobility and building a recovery that doesn’t leave big parts of the country behind, then we need to embrace entrepreneurship,” he said.

Deputy first minister John Swinney said it was “hugely encouraging” that there were now a record number of businesses, “creating jobs, generating inclusive growth and demonstrating the overall strength of the Scottish economy”.

He added that the Small Business Bonus Scheme had benefited more than 99,000 commercial properties in Scotland “by either eliminating or substantially reducing business rates”.

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ABOUT THE EXPERT

Rebecca is a reporter for Business Advice. Prior to this, she worked with a range of tech, advertising, media and digital clients at Propeller PR and did freelance work for The Telegraph.

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