“The entrepreneur always searches for change, responds to it and exploits it as an opportunity.”
When Peter Drucker, the father of modern management, wrote those words, he could not have been more accurate.
After the last few years of change of a highly unpredictable nature – in the shape of a global pandemic, a war in Europe and the subsequent economic fallout – the north-east of Scotland has responded superbly and we have seen our principal business sectors use it as an opportunity, which is creating ideal conditions for start-ups and new projects.
A central component to entrepreneurial and start-up success is building an attractive and supportive environment.
By creating the conditions for new ideas and products to be developed and do well in the marketplace, we can stimulate economic growth, create new jobs and deliver prosperity from the very beginning to ultimately full-scale maturity.
A perfect example of this is on our very own doorstep here in the north-east.
North-east as global centre of excellence
From the emergence of the first oil reserves in the 1970s, a world-class industry grew, supported by the largest concentration of energy supply chain companies anywhere in the UK. Putting down deep roots, this cluster grew to become a global centre of excellence and attracted long-term investment and talent.
Today, that entrepreneurial spirit is just as strong.
Creating the right environment
ONE (Opportunity North East) is focusing on developing entrepreneurship skills with a focus on innovation-led productivity.
It is currently providing £6millon of new business growth, innovation and skills programmes supported by the North East Economic Recovery and Skills Fund to boost employment and the economy in Aberdeen and Aberdeenshire.
Currently underway are projects supporting start-up accelerators, an innovation investment fund, a graduate into business programme, leadership and entrepreneurial skills programmes and hospitality apprenticeships.
Next autumn will see the opening of the ONE-led £40m BioHub at Aberdeen’s Foresterhill Health Campus. It will be one of Europe’s largest integrated clinical, research and teaching sites for life sciences and home to up to 400 scientific entrepreneurs, bringing new drugs, therapies, medtech and digital health solutions to market.
Work will also begin next year on the £21m Seedpod, a centre of excellence for manufacturing and production, to support and grow the region’s £2.2bn food and drink sector and nurture the next generation of start-ups.
Role for government
In among this investment, there is a role here for government too.
In its National Strategy for Economic Transformation, the Scottish Government recently introduced its Tech Scalers network to help tech founders scale-up their businesses by accessing advice and mentorship from industry experts.
With the tech industry forecast to be the second-fastest growing sector in Scotland by 2029, time sensitive initiatives like this, offering support in that crucial early development phase, are very important.
However, one tool won’t do the job. I hope the Government is keeping a close eye on where else these types of mentor networks should be introduced.
Pioneers can overcome daunting hurdles
On a day-to-day basis, the reality facing start-ups and entrepreneurs of doing business in the face of today’s economic challenges are daunting.
Scotland’s Small Business Index for Q1 2022 showed 88.2% of respondents reporting an increase in overheads, mainly due to fuel, utilities and inputs.
Inevitably, in the face of these pressures, business confidence has weakened.
Despite these hurdles, there are still success stories. Sales performance in domestic markets increased by 6.4% year-on-year in Q3 2022 and businesses expect a further rise of 7.1% during the next 12 months.
In the north-east, there continues to be strong business wins, which goes to show how dynamic the area is and the ability of our entrepreneurs to see opportunity in change.
Entrepreneurs grasp opportunity in change
BrewDog, the Ellon-based brewery and bar group, now has a brand value of £1.68bn, making it the 14th most valuable beer brand in the world.
Altens-based Raw Culture, a business started up in 2020 to brew hop-infused kombucha, a tea-based soft drink, won the award for best new emerging product at this year’s north-east Scotland Food and Drink Awards.
Raw Culture was helped by Business Gateway, ONE, Scotland Food & Drink and Scottish Enterprise and is a great example of how impactful access to the right expertise, support grants and loans to businesses can be.
Laurencekirk-based Blaze Manufacturing Solutions, which provides fire safety products and services, has recently secured a stream of new work in the nuclear, renewables and industrial sectors, taking on a dozen new staff.
And electrical equipment supplier AEL, based at Bridge of Don, with regional hubs in Texas and Azerbaijan, has just taken on its 50th employee – promoting it from the category of “small” to now “medium-sized” business – having exceeded £10m in annual turnover for the first time.
These innovation-led businesses are pioneers who embraced change, saw an opportunity and are now excelling in their fields.
Most important of all, they are essential to diversifying our economy and delivering long-term sustainable growth.
Martin Gilbert is co-founder and former chief executive of Aberdeen Asset Management and chairman of Toscafund and AssetCo.
Conversation