The most recent iteration of the long-running Scottish Business Monitor report, which is produced by the Fraser of Allander Institute in partnership with Addleshaw Goddard, surveyed over 400 firms from across the Scottish economy in the last two months.

Respondents were asked a series of newly-introduced questions regarding the Scottish Government, with these queries helping the government-business dynamic and its developments to be measured moving forward.

Specifically, the new set of questions helped to uncover that a mere 9% of Scottish companies feel that the Scottish Government understands the business landscape, compared to the 64% of businesses that currently disagree.

Larger firms were slightly more likely to disagree than smaller firms on this front: 86% of companies with over 100 employees disagree that the government understands business, while 73% of companies with fewer than 100 employees also disagree.

Furthermore, just 8% of businesses feel that the Scottish Government engages effectively with the sector they work in, with 67% of firms disagreeing.

Larger companies again had a higher rate of dissatisfaction, with 90% of firms with over 250 employees disagreeing that the government effectively engages with their sector, compared to the 72% of firms with between one and 10 employees who think the same.

Sector-wise, and at 80% and 92% respectively, Scots hospitality companies and “other services activities” businesses were the most likely to currently disagree that the Scottish Government understands the business environment.

Meanwhile, 92% of other services activities, 77% of construction, and 72% of retail companies disagree that the government engages effectively with their sector.

The research also showed that only 19% of respondents believe they know an effective route to influence Scottish Government policy, while 39% disagree.

Speaking on the findings, Professor Mairi Spowage, the director of the Fraser of Allander Institute, said: “These results are obviously pretty disappointing for the Government, with the vast majority of businesses not feeling that the government understands business or that they engage effectively.

“However, they underline the importance of the Scottish Government resetting their relationship with business.”

Spowage also noted that “These indicators can help us track progress over time – and hopefully see improvements in the relationship.”

David Anderson, the head of corporate at Addleshaw Goddard in Scotland, commented: “Developing the best environment to do business is essential for the economy to thrive so it’s important for policymakers to be aware of the sentiment among business leaders in this regard, the good and the not-so good.

“These results are very timely and speak to the frustrations that businesses are clearly feeling.”

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The findings from the most recent Scottish Business Report further emphasise how a sizable portion of Scotland’s business community currently feel disillusioned and discouraged regarding Scottish Government action.

At an exclusive roundtable event held in June, key figures from the Scottish tech and business ecosystem as well as Viljar Lubi — the Estonian Ambassador to the UK — were brought together to discuss what can be learned from Estonia, which is something of a modern tech powerhouse.

The discussion inevitably touched on governmental action and support, and how Estonia’s governmental approach differs from Scotland’s. Peter Proud, the CEO and founder of Edinburgh-headquartered tech company Forrit, said that “There’s a real disconnect between government and business here in Scotland at the moment,” and “people like myself are drifting away […] because I don’t feel we’re being listened to.”

He relayed how he was recently “asked to sit on an economic development day — a workshop on startups,” and “was the only person that started a company there. Everyone else was from a government agency.”

Proud’s comments came just two months after First Minister Humza Yousaf announced the Scottish Government’s “New Deal for Business,” in a bid to “help business and trade to thrive and maximise the opportunity of the green economy,” according to the Scottish Government.

A New Deal for Businesses Group has been established as to “provide a forum for government and business leaders to explore how best to support businesses and communities and to actively work together to achieve common goals, aligning Scottish Government policy with business.”