Small Businesses & Entrepreneurial Activity

While ethnicity data is not available for the North East, Scotland-wide research has found that people from ‘non-white’ ethnic backgrounds start businesses at a much higher rate than those from ‘white’ backgrounds. In 2019, the figures were 17% and 7%, respectively. However, in 2020, the former figure dropped to 13%, while the latter remained steady at 7%, indicating “greater precarity” in circumstances for ethnic minority communities.

Ultimately, a higher proportion of a small population is still a small number in absolute terms. Between 2015 and 2019, only 1-3% of Scotland’s small businesses were majority led by people from ‘non-white’ backgrounds, despite comprising 4.3% of the population.

Meanwhile, setting aside ethnicity, the proportion of people engaged in ‘early entrepreneurial activity’ across Scotland remained steady between 2019 and 2020. However, the North East saw a decline from 8.7% to 6.5%. Reasons for the difference in the North East included a perception of fewer good opportunities for start-ups, less confidence in success, and greater fear of failure, all of which have been diverging from the Scottish average for a few years. Researchers connected these individual attitudes to wider structural issues, like an economy made fragile due to its reliance on the oil and gas industry.

Research from 2016 identified similar concerns, along with other factors working against ethnic minority entrepreneurs in Aberdeen. These included limited access to finance, labour and support.

Global Entrepreneurship Monitor, 2013 (Link) and 2020 (Link).

2016: Rahman, Z, et al. ‘What influences ethnic entrepreneurs’ decision to start-up: Some evidence from Aberdeen, Scotland.’ Journal of Small Business and Enterprise Development. Link

Data Source:  2019, UK Department for Business, Energy and Industrial Strategy. Link.
Category:  Discussion & Text
Topics:  Economy  Employment  Ethnicity  Participation