Immigrant-led businesses ‘contribute £13 billion to Scottish economy’

One in 10 smaller businesses in Scotland is led by an immigrant entrepreneur and these firms contribute more than £13 billion to the Scottish economy, providing 107,000 jobs, according to a report conducted at the University of Strathclyde.

The Federation of Small Businesses (FSB) commissioned Strathclyde’s Hunter Centre for Entrepreneurship 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, 37,339 people from elsewhere in the UK chose Scotland to start up in business in 2017, 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 from 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% more likely to start a business than non-migrant Scots.

Around half of Scotland’s immigrant entrepreneurs are located in Edinburgh, Glasgow or Aberdeen – at 21.2%, 16.4% and 6.2% of Scotland’s immigrant entrepreneur population respectively - but the report highlights that immigrants in rural Scotland are more likely to be self-employed or run their own business.

Dr Samuel Mwaura, corresponding author of the report at the Hunter Centre for Entrepreneurship, 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.”

Andrew McRae, FSB’s Scotland policy chair, said: “This research shows that Scotland is home to entrepreneurs from all corners of the world, whether they’re from England, Estonia or Ethiopia. While their stories differ, what’s clear is that migrant entrepreneurs are making a huge contribution to Scotland’s economy.

“While each of their stories are different, 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.”

The study, titled Starting Over: Migrant Entrepreneurship in Scotland, finds that migrants are more likely to have postgraduate qualifications, family business experience, export ambitions and higher growth ambitions. It also underlined that Scotland has the highest proportion of university-educated migrants in the EU.

Antje Karl, born in Germany, runs the Yarn Cake in Glasgow’s West End, an award-winning knitting café which has won the British Knitting Awards’ Best Independent Yarn Shop in Scotland award on two occasions.

She moved to Scotland as an architect, having previously studied at Strathclyde, and started her business after being made redundant in 2008.

On starting a business, Antje said: “It took me a wee while to get up the gumption to do it, it was high risk, but then I thought why not?

“Scotland is an easy place to make your home. My home was Glasgow, I didn’t want to leave. It was where my support network was.”

Raj Sark, born in India, is a tech entrepreneur having appeared on BBC TV’s Dragons’ Den with his first venture. In his new business, he is working with partners in the US and London to develop a new Augmented Intelligence (AI) platform. He is based in Glasgow’s city centre.

Raj said: “A city like Glasgow – its variety and its affordability – makes it a great place to start a business. I don’t need to pay London rent levels for a small office in the city centre and have access to talented employees.

“I started a previous venture in Denmark but moved to Glasgow because of the support offered by the University of Strathclyde. There are a lot of opportunities in Scotland for those that look for it and tap it – and it doesn’t cost you a fortune to run a start-up.”