Bill Jamieson
Petra Wetzel
I am halfway through one of the busiest weeks I can recall for Scottish business. Start-up events and conferences, meetings with young entrepreneurs and a big two-day shindig coming up at the Scottish Exhibition and Conference Centre in Glasgow with more than 100 exhibitors.
Our economy in the doldrums? Our prospects dire? I don’t doubt the doom and gloom of Brian Ashcroft’s latest Fraser of Allander commentary. But is nothing happening? Actually, quite a lot is.
Having stepped down as executive editor of the Scotsman I am supposed to be, in that long-defunct vernacular, ‘retired’. As a growing number will testify, no such state exits. It is an empty, meaningless word. We ‘retirees’ are busier than ever. And – here’s the ironic thing – in the past three months I have met and interviewed more people in the frontline of business than I ever did in 12 years enslaved to the desktop PC screen-based ‘journalism’ of online business wire monitoring. There is journalism – and there is the journalism of getting out and meeting people.
So the past few months have been a whirlwind of travelling, meeting, interviewing and speaking. It was particularly inspiring to meet Petra Wetzel, the young woman who has built up her West micro-brewing business just off Glasgow Green from early start disaster and administration into a thriving and expanding business now employing more than 40. There are fledgling jewellery and craft businesses, online marketing ventures, property maintenance services, specialist food retailers. Helping to build my own Scot-Buzz website have been Ruth Mackay and Ben Cartwright of Uniq giving inexhaustible support.
It is easy of course to dismiss these as one-offs, or ventures too small or insignificant to make any significant impact on the wider economy.
It is certainly true that they are small-scale, many opportunist and some destined to be temporary. What possible contribution could they make to lightening the impenetrable black clouds of the Fraser of Allander picture – an economic model struggling just to mark time? It was against this background that recent figures released by the Scottish Government came as an intriguing surprise.
These revealed that the number of private businesses in Scotland has grown to just over 341,000 – the highest since 2000, and that despite all the problems and challenges in the economy, the number has increased every year since 2006. In fact the most recent year to March 2012 saw the largest annual increase – almost 10% – since 2000.
Last week I was delighted to attend the East of Scotland Federation of Small Businesses dinner – the best attended I can recall and with many MSPs and government figures present – growing recognition of the vital role SMEs can play in securing economic recovery. And from a well-attended Scottish Business in the Community event the following day I came across this startling statistic: that if every SME took on just one extra member of staff, unemployment in Scotland would fall to zero.
Now that universal one-person recruitment across the SME sector just isn’t going to happen. We know also that these business start-ups comprise many who have been made redundant from larger firms and that a high percentage of these businesses will fail – that is in the nature of enterprise. So these figures need to be treated with caution. I expect that over the next two years the policy emphasis will switch from encouragement of business start-up to the provision of help in second and third-year start-ups to drive down the failure rate.
Formidable though all these caveats and obstacles are, we should remember, too, from the work of that wonderful economist Joseph Schumpeter who understood the dynamics of the business cycle far better than Keynes, that it is the innovative dynamic of the entrepreneur that drives the business cycle.
Enterprise is intrinsically about innovation and discovery – new products and services, new markets, new, more efficient methods of production – and the recycling and redeployment of assets of businesses that have failed into new ventures.
It is this discovery process that plays a critical role in turning the business cycle and lifting us into recovery. The entrepreneur is to be found in that terrain of which Donald Rumsfeld spoke – ‘things we don’t know we don’t know’. And here is to be found one of the reasons why the dynamic of enterprise and entrepreneurialism are accorded such low recognition by the macro-economists. Their input and their impact cannot be measured or quantified in formal economic models. What cannot be measured or predicted is thus cast aside. But it is like a sea captain setting sail without acknowledging the nature of the ocean and moaning about the motion of the sea on his voyage projections.
That the forecast is rough we know, due to the long tail legacy of the 2008-09 financial crisis. But this, counter-intuitively, may well be working as an enterprise driver.
We should draw encouragement from the enterprise we see in Scotland today. And in any event, to decry it, and to despair, is a sin.
Bill Jamieson is the editor of ScotBuzz
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