Welsh dragons breathing business fire

The Welsh are getting something right about business start-ups. And as the woeful state of Scotland's business birth-rate is probably the biggest issue affecting the economy long-term, it's worth paying attention.

We learn this from the annual update on the Strathclyde Business School research into entrepreneurial activity.

It draws comparisons with some 59 economies. Scotland's not at the bottom of all the tables: Italy does markedly worse, and even Germany's slightly behind. Nor was Scotland getting any worse last year (after a bad 2009).

But the survey evidence continues to show all the policy effort that's gone into boosting start-ups isn't having much effect, particularly when comparing with the rest of the UK, Ireland and Scandinavia.

This much was challenged at the university launch of the Global Entrepreneurship Monitor by those who are working on actual start-up activity rather than surveying public opinion about it.

More highly educated women, and some men who left school early are going into adulthood to buck the trend. Women's business networks note that the gender gap is closing, and that women are going into a widening range of sectors.

But it seems there's a different perception between those doing and helping the start-ups and the population as a whole.

Scots don't see finance as being as big an obstacle as those in similar countries and parts of the UK.

They do have a high fear of failure, and are much more likely to tell the academic opinion surveyors that they're not interested in starting up. Or they don't have the time.

Don't they know there's a recession on, and job shortages, author Jonathan Levie was asked? It seems not, and the lack of interest has increased through the downturn.

What he bluntly calls "ignorance" of the weak job market means the consequent need for more self-employment and business births hasn't yet fed through to boost entrepreneurial activity.

Business education

He also warns of particular problems around the shortage of "repeat entrepreneurs", who are up for giving it another go, even after an initial failure. Scots are much less likely to do that, which he says is a particular concern, as it's those who gain experience from their first attempt who go on to build the most significant firms.

Levie points out the Welsh set out a broad-ranging action plan 11 years ago, to tackle the same problem. And as the principality shared with Scotland the legacy of large, heavy industries and a large public sector, it's a valuable comparison.

The Welsh Assembly government plan included a significant push on business education in the college and university curriculum, and that's what Jonathan Levie reckons is making the difference among younger people.

In Scotland, school pupils get quality Determined to Succeed materials on business education. But after school, for many, that stops, and it's argued that they aren't guided into seeing the link between their area of tertiary education training and the possibility for starting up a business that uses those skills.

So, there's a strong recommendation with this research to change that, requiring more business education, and particularly in the college sector.