Immigrant-led firms contribute more than £13bn to Scots economy, study suggests

Businesses run by people who were born outwith Scotland contribute more than £13 billion to the economy of the country, according to analysis.

In a study published on Thursday, figures suggest smaller firms led by immigrant entrepreneurs provide around 107,000 jobs in Scotland.

The research was carried out by the Hunter Centre at the University of Strathclyde, having been commissioned by the Federation of Small Businesses (FSB) to look at the contribution of migrant entrepeneurs.

Academics found that almost half (47%) of 222,520 people who started a business in the country in 2017 had either moved to Scotland or moved around within Scotland.

According to the study, a total of 37,339 people from other parts of the UK chose Scotland to start up in business in 2017, while 17,567 Scots who had previously lived overseas chose to do so.

Over the same period, it is estimated 18,416 people born outside the UK were trying to establish their own Scottish business.

The analysis also suggests that all migrants – categorised as including immigrants from outside the UK but also people born elsewhere in the UK, returnee Scots and those 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 also estimated to be 67% more likely to start a business than non-migrant Scots.

Meanwhile, around half of Scotland’s immigrant entrepreneurs are located in Edinburgh, Glasgow or Aberdeen.

The report also highlights that immigrants in rural Scotland are more likely to be self-employed or run their own business.

Andrew McRae, of FSB Scotland, 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.”

He added: “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.”

Migration Minister Ben Macpherson said the statistics underline the importance of freedom of movement and wider migration to Scotland’s workforce, business community and economy.

He said: “The Scottish Government welcomes people who have chosen to make Scotland their home and, as these statistics demonstrate, those who choose to come to Scotland to live, work, study and invest contribute significantly to our economy and enrich our nation.

“That is why the Scottish Government is working with the Scottish business community to help EU citizens to stay as part of our ‘Stay in Scotland’ campaign.

“These statistics also highlight the damage that the UK Government’s new immigration proposals would have on small businesses across Scotland.

“The UK Government’s immigration policy proposals in their White Paper would be disastrous for Scotland and could send our working age population into decline.

“Our prosperity is under threat due to the UK Government’s ‘hostile environment’ immigration policies and their determination to end freedom of movement.

“It is becoming increasingly vital for Scotland to be able to design and implement migration policies tailored to the needs of Scottish businesses, communities and public services, and for the devolution of powers to deliver new solutions.”

A UK Government spokesman said: “Migrants make an important contribution to our economy and we have a long and proud history of being a welcoming nation.

“That’s why our future skills-based immigration system is designed to help us attract the talented workers we need from every corner of the world and demonstrates Scotland is open for business. It is also important that we deliver on the referendum result by ending free movement.

“The system will be quicker, easier and there will be no cap on the number of skilled workers such as scientists, doctors and engineers who can come to Scotland.

“We want to understand the needs of the whole of the UK, which is why we are engaging with Scottish businesses, the Scottish Government and other stakeholders about our plans throughout 2019.

“At the same time, the Scottish Government must do more to shoulder their share of the responsibility for making Scotland an attractive place for people to live, work and put down roots.”

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