Coastal and rural areas in Scotland have seen a significant decline in trading companies over the first 12 months of the pandemic, when compared to the previous 12 months.
The average monthly number of new businesses starting up has declined across the UK during the coronavirus crisis, but the decline in Scotland has been particularly steep, according to new data from AXA UK.
The insurer, along with the Centre for Economics and Business Research (CEBR), revealed that the decline is most noticeable in the areas just outside major cities in Scotland.
For example, Paisley and Renfrewshire South saw an 39% reduction in the number of new businesses started, while the next-door constituency Glasgow South West had a 18% reduction.
Meanwhile, North East Fife saw a 45% drop of new business being born.
The average monthly number of new businesses starting up has declined across the UK, sitting at -1.1% during the pandemic, when compared to 2019 – which was a record year for birth rates.
When looking at financial support during the pandemic, the research shows that nearly half of all female-run businesses turned to friends and family, compared to around 40% of male-run small to medium-sized enterprises (SMEs).
Additionally, younger business owners were less likely than those aged over 35 to rate the effectiveness of the furlough scheme highly – despite seven in 10 utilising it.
The research also explored the motivations behind starting and running a business, showing that flexibility and self-determination were paramount despite a clear generational difference in terms of what drove them to launch their business in the first place. Concerns over burnout and work-life balance were also common amongst all decision-makers.
Looking ahead, those same decision makers spoke about what they saw as the main challenges and opportunities facing their business. Debt, rising costs, and the legacy of the pandemic were common concerns.
Josie Dent, managing economist at CEBR, commented: “The findings of this report highlight how pivotal SMEs are for the UK’s economy – accounting for more than half of all UK business turnover, the economy would not be able to function without them.
“The strength of SMEs is likely to improve as time goes by, with the growth rate of employment in small and medium businesses outstripping that of large businesses over the last decade.
“Although larger businesses may be more financially resilient to shocks such as the pandemic, the dynamism of smaller businesses will allow them to bounce back strongly.”