The findings come out of the Global Entrepreneurship Monitor report done by researchers from the University of Strathclyde. 

The report measured entrepreneurial rates through interviews with approximately 170,000 adults in 49 countries. Of that, 10,143 interviewees were in the UK, and 2,020 in Scotland. 

It identified a three percentage point drop in the total early-stage entrepreneurial activity (TEA) rate in ages 18 to 24 compared to last year. The TEA rate is calculated from the total number of nascent entrepreneurs against the new business owner-manager rate. 

The female to male TEA ratio in Scotland sits at 68%, the same as 2022, compared to the 79% ratio for the rest of the UK which jumped from 73% last year. This suggests that while the rest of the UK pushes steadily towards a more female inclusive entrepreneurial landscape, Scotland remains stagnant. 

“We need around 60,000 more women engaging in early-stage enterprise in Scotland to approach gender parity, but despite much effort over the last several years, female rates just have not improved and we are out of pace with progress in female entrepreneurial activity in the rest of the UK,” said Dr Samuel Mwaura, co-author of the report.

“Clearly, there is something in Scotland that is not working for female entrepreneurship and we need to figure it out and fix it,” he continued. 

“However, it is encouraging that ethnic minority entrepreneurship in Scotland seems to have finally recovered to pre-pandemic levels. Ethnic minorities continue to make substantial contributions to entrepreneurship in Scotland, especially at a time when entrepreneurial rates are declining.”

According to the report, the Scottish non-white population’s TEA sits at 17%, double the white TEA in 2022. After this jump, non-white TEA rates have caught up to the UK average rate as well as Scotland’s pre-pandemic rate. 

“Ethnic minorities continue to make substantial contributions to entrepreneurship in Scotland, especially at a time when entrepreneurial rates are declining,” said Mwaura. 

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According to the survey, the largest driving factor for lower TEA numbers is low confidence. Six in ten Scottish adults cite fear of failure as the main reason for not becoming an entrepreneur. 

At the same time, only 40% of people in Scotland believe they have the correct skill set, experience, and knowledge to start a business. The only region in the UK with a lower rate than that is the North East region of England at 30%.