•The Global Entrepreneurship Monitor (GEM) research consortium measured rates of entrepreneurship across multiple phases in 43 economies in 2020, making it the world's most authoritative comparative study of entrepreneurial activity in the general adult population. In the UK in 2020, 9,453 adults aged 18 to 80 participated in the GEM survey. This report mainly focuses on Scotland, comprising 2,019 participants, of which 1,648 are from the working age population (18-64 years). •This monitoring report details GEM measures of entrepreneurial attitudes, activity and aspirations in Scotland and compares the results across the four home nations of the UK. We also explore regional differences within Scotland at the NUTS2 region level. •As a result of the COVID-19 pandemic and the obvious disruptive impact on the lives of all of us, including the huge impact on the economy, it was decided that the GEM UK survey, in line with all GEM Global participating countries, should be pushed back until Q4 of 2020 rather than June through August. The UK team felt that this was preferable to not undertaking the survey at all as the pandemic raised many important questions about the ability of entrepreneurs, and indeed the wider population, to navigate their way through the crisis as the economy was effectively closed down and household incomes were under great stress for the majority of the population. As it turned out Q4 2020 in the UK witnessed another second and third waves of the COVID-19 virus, which led to two further lockdowns. The specific COVID-19 findings need to be understood against that context.
•Total early-stage Entrepreneurial Activity or TEA (the sum of the nascent entrepreneurship rate and the new business owner-manager rate - without double counting) in Scotland in 2020 was 7.3%. •TEA rates in 2020 were not significantly different across the home nations: Scotland (7.3%), England (7.7%), Wales (6.5%), and Northern Ireland (5.4%). Changes in TEA rates from 2019 to 2020 in Scotland, Wales and Norther Ireland were not statistically significant. However, the rate in England in 2020 (7.7%) was statistically significantly lower than the rate in 2019 (10.5%). •Employees can also be engaged in entrepreneurial activity on behalf of their employers; this is measured through the Entrepreneurial Employee Activity (EEA) Rate. In 2020, Scotland's rate was 3.7%, which is comparable with UK's rate of 3.2% (which was statistically significantly lower than 2019 rate (5.6%)). Considering both TEA and EEA together provides a more comprehensive picture of entrepreneurial activity in a nation. •TEA rate within Scotland is highest in the Highland and Islands region (8.7%), followed by South Western Scotland (7.4%), Eastern Scotland (6.9%) and North Eastern Scotland (6.5%). In North Eastern Scotland, there has been a significant decline in the TEA rate from 2019 (8.7%) to 2020 (6.5%), while the rest of Scotland held steady despite the pandemic.
•In 2020, among the home nations, Scotland reports the highest difference in TEA rates by gender with males at 9.3% compared to a female TEA rate of 5.3% (a female to male ratio of 58%) •There is a significant difference between male and female on certain motives to start a business. For instance, on the motive "to build great wealth or a very high income", only 51% of females identified this as a motive compared to 62% of males. Similarly, there is a significant difference between male and female motives with regard "to earn a living because jobs are scarce" with 76.4% female highlighting this motive compared to 57.3% males. •Female entrepreneurial activity in the Highlands and Islands region appears to match, and ostensibly slightly outperform male TEA in the area, while there is gender disparity with higher male TEA in other regions of Scotland. •In Scotland, the TEA rate for the younger 18-24 age group is the highest (13%) within the UK home nations. •Following previous trends, the TEA rate of the white ethnic population in the Scotland in 2020 was lower than that of the non-white population, at 7.05% compared to 12.95% respectively. However, the TEA rate for the non-white ethnic group was lower than the rate in 2019 (16.8%), while it remained comparable for the white ethnic group. This suggests that amid the higher rates of entrepreneurial activity among ethnic minorities, there is greater precarity too. •In Scotland, contrary to the trend in the wider UK, both the most deprived quintile and the least deprived quintile reported similarly high TEA levels, of around 9%. The type of entrepreneurial activity engaged in, and its socioeconomic outcomes, has however not been established.
Attitudes and Aspirations
•In Scotland, as with the wider UK, just under half of the non-entrepreneurial population know an entrepreneur. Further, 76% indicate they have seen stories of successful entrepreneurs in the media, 80% feel successful entrepreneurs have a high status and respect in society, and about 72% believe that most people would consider starting a business a good career choice. Entrepreneurship is thus generally well regarded in Scotland. •The consideration of entrepreneurship as a good career choice appears to have increased in 2020 as compared to 2019, across Scotland and the UK amidst the pandemic. •Despite relatively higher regard for entrepreneurship in the North Eastern Scotland region, there appear to be a greater fear of failure among potential entrepreneurs. There are also gaps in confidence in own entrepreneurial skills in the area although this is an area of concern for Scotland as a whole relative to the wider UK. •Within Scotland, the perception of good start-up opportunities is seemingly lowest in the North Eastern Scotland region, a significant decline from 41% in 2019 to just under 24% in 2020. Highlands and Islands saw the biggest decline in the rates of perception of good start-up opportunities almost halving from around 50% of the adult non-entrepreneurial population to just over a quarter. In contrast, South Western Scotland did not see major changes in this regard between 2019 and 2020. •Perhaps reflecting aspects of extant policy priorities in Scotland, a slightly smaller proportion of early-stage entrepreneurs (12.6%) expect to create more than ten jobs with a growth in employment of more than 50% in the next five years. The UK average is 14.3%. In contrast, there is a greater share of established business-owners in Scotland with such growth expectations (almost 12%) compared to the UK average (around 9%)
Impact of COVID-19
•Around 1 in 2 of those involved in TEA agree that there are new opportunities because of the pandemic (49.4%) in Scotland. This is lower than among established business owner-managers: only 1 in 3 would agree with this statement. •Around 2 in 3 (65.4%) of those engaged in start-up activity in Scotland indicate that the coronavirus pandemic has led to a delay in getting the business operational.