A new report argues that Scotland could create thousands of high-value jobs by redirecting existing entrepreneurship funding towards the practical needs of founders rather than launching new programmes.

Scotland could close its scaleup gap without increasing public spending by reorganising the support already available to entrepreneurs, according to Framing Scotland’s Entrepreneurial Economy, a new report from CodeBase COO Richard Lennox – eponymously dubbed the Lennox Report.

Framing Scotland’s Entrepreneurial Economy argues that Scotland has made significant progress in encouraging people to start companies but remains less successful at helping promising businesses move from early traction to sustained growth.

Scaleups account for only 0.52% of Scotland’s SMEs but generate around one-third of total SME turnover. Previous estimates cited in the report suggest that closing the scale-up gap could create 138,000 high-value jobs and generate an additional £22 billion in annual revenue.

Lennox, who previously held senior roles at Skyscanner and Current Health and is currently COO at CodeBase, said the country does not need a larger entrepreneurship budget or another layer of support programmes.

“The fix isn’t a bigger budget or another programme. It’s discipline about where the existing money goes,” he said.

“Every intervention should be able to answer one question: did this put something of genuine value in the hands of a founder, at the moment they needed it? If it can’t, we should stop funding it and redirect that money to something that can.”

Support Built Around Founders

The report proposes commissioning support according to what companies need at different stages of development, rather than funding individual programmes with separate objectives and performance measures.

Its framework maps three forms of support – access to capital, access to customers and markets, and advice from experienced operators — across four stages: ideation, early, growth and scale.

Lennox argues that the intensity and personalisation of support should increase as companies develop, with businesses at the growth stage requiring more specialised intervention from people who have previously navigated similar commercial challenges.

The report describes this transition between early traction and repeatable growth as Scotland’s most significant weakness. It says existing provision remains strongest at the ideation and early stages, while companies approaching the point at which they could scale are comparatively underserved.

The analysis draws partly on the independent evaluation of Techscaler, which found strong mobilisation, community building and benefits for participating founders. However, almost 70% of engaged members were at the ideation or early stage, while three companies accounted for nearly three-quarters of the gross economic impact considered by the evaluation.

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Rather than assessing programmes primarily through participation, capital raised or jobs created, Lennox recommends measuring “progression density”: how many founders move successfully from one business stage to the next, how quickly they do so and what support contributed to that development.

The report also argues that not every company is seeking the same destination. Support should recognise the difference between sustainable small businesses, larger growth companies and venture-backed firms seeking international scale, rather than applying the same assumptions to each.

Alongside reforms to existing support, Lennox identifies one larger intervention for government: attracting or developing an anchor global technology employer with a Scottish campus supporting between 500 and 1,000 skilled workers.

He argues that major employers have helped cities including Dublin, Berlin and London build stronger technology ecosystems by developing experienced talent, attracting skilled workers and producing future founders.

“The prize is a Scottish economy that compounds in favour of the people who live here,” Lennox said.

“When a company scales here, it hires here, pays taxes here, trains the next generation of operators here, and produces founders who begin the next wave.”