Scotland lags behind rest of the UK for new business creation

More help for businesses needed from both central and devolved government needed for entrepreneurs in Scotland.

Scotland is lagging behind the rest of the UK in terms of the number of new businesses created, and is home to all five of worst performing areas out of the 362 UK areas studied on this criterion, says UHY Hacker Young, the national accountancy group.

The net number of new businesses created in Scotland is 2.4 (net of closures), per 10,000 population – less than a fifth of the UK average, which has a net 13.2 new businesses being started per 10,000 population.

UHY Hacker Young says that the low number of new businesses started in Scotland suggests that more assistance needs to be given by both Central Government and the Scottish Devolved Government to Scottish entrepreneurs.

UHY Hacker Young says that a paucity of headline grabbing pro-business policies aimed at Scotland that would really motivate entrepreneurs.

South of the border flagship projects like ‘Silicon Roundabout’ in Shoreditch and the ‘Northern Powerhouse’ have both received substantial political backing and acted as a spur to entrepreneurs.

Aberdeen is the UK’s worst performing major city in the UK – 362nd out of the 362 areas – for new businesses created with nearly 18 more business closing than opening in the city over the last year, per 10,000 population. The ‘Granite City’ placed fifth worst of all UK areas.

UHY Hacker Young attributes part of Aberdeen’s particular problem to the downturn in oil markets over the long term, which has impacted the generation of new businesses and jobs in the city.

Aberdeen – the UK’s North Sea oil hub – has felt the effects of the oil sector downturn worse than anywhere else. A recent report suggested that 5,500 jobs will be lost over the next decade as a result of the downturn. Another study found that insolvencies in the oil & gas sector hit a five-year high last year.

Jon Warsop, group chairman at UHY Hacker Young, says, ‘The number of net new business creation in Scotland should serve as a wake-up call to politicians on both sides of the border.

‘While the government’s eyes have been focused elsewhere, they have let Scottish businesses lag far behind.

‘Oil has historically been a driving force in Scotland, but the government now needs to be more proactive in business and job creation.’

Research compiled by UHY Hacker Young for the previous year shows that areas in Scotland, Wales, and Northern Ireland dominated the bottom of the rankings for the number of new businesses created. 18/20 of the worst-performing areas for the generation of new businesses were in the ‘Celtic fringe.’

Aberdeen was the fifth-worst performing area for new business creation last year – net number of new businesses created

Further reading on businesses in Scotland

Owen Gough, SmallBusiness UK

Owen Gough

Owen was a reporter for Bonhill Group plc writing across the and titles before moving on to be a Digital Technology reporter for the

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