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02 May 2019

Revealed: Immigrant-led businesses’ £13 billion contribution to Scotland

Reference number: SPUR0205

- FSB calls for action to attract and support migrant entrepreneurs

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.”

 

Case studies (photography available):

Antje Karl, born in Germany, runs the Yarn Cake in Glasgow’s West End. The Yarn Cake is an award-winning knitting café – it’s won the best independent yarn shop in Scotland award on two occasions. She moved to Scotland as an architect, having previously studied at the University of Strathclyde, and started her business after being made redundant in 2008.

On starting a business, Antje Karl 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 Dragon’s 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 platform. He’s based in Glasgow’s city centre.

Raj Sark 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.”

Djamila Siagh, born in Algeria, is part of social enterprise Soul Food Sisters – a group of migrant women based in the East End of Glasgow, comprised of eight women from five different continents. After experiencing similar obstacles the women -  most of whom are graduates, including an architect, doctor and clinical psychologist - came together to try to make a positive change in their lives and their communities. The co-op focuses on empowering migrant women to start their own food business while running a café and catering business.

Djamila Siagh said: “This is what it is. It is a place, a platform, where we get everyone together to share recipes, cook and learn.

“We are sharing our knowledge and skills and bringing people here to talk and help each other. We are working hard to change women’s lives. The attitude of Scottish people is very welcoming and supportive.”

 

ENDS