A referendum which could have a profound impact on business

Whatever the result of the Scottish independence referendum, the outcome will likely have a significant effect on the business landscape of the UK or divided nations.

As the UK has emerged from the worst recessions in recent memory, Scotland has more than carried it’s own weight. It has, in fact, been a shining beacon for both existing and new markets across the country.

Ever since New Labour granted Scotland a new devolved Scottish parliament, with tax-varying powers, back in 1997, the country has become increasingly more independent in its commercial and business activities.

A cursory look up the east side of the country shows Dundee, a hotbed of computer gaming activity and birth place of titles such as Grand Theft Auto, as well as Aberdeen, which has experienced a recent boom of oil and gas-related software firms created.

Companies such as Skyscanner, miiCard and FanDuel have shown that fast-growth investor-backed business can thrive north of the boarder, away from the safe haven of London.

What is a worry though, if the Scottish people do vote for independence, is how intertwined the economies of Scotland and England are – and the impact if the two were to part.

Bill Morrow, the Scottish founder of angel investment and crowdfunding platform Angels Den, reveals that every single deal that has been facilitated for Scottish entrepreneurs during the last 12 months have been funded by London-based investors.

He adds, ‘There are some truly incredible entrepreneurs in Scotland; the country has so much to offer to the business world, but there is a huge gap where investment is concerned.

‘Rather than liberating the country, a move away from the UK will run the risk of stifling the amazing new startups that Scotland has to offer.’

More on Scottish independence:

Investment in business, while not necessarily at the top of every voting Scottish person’s agenda, is a genuine case for worry. For the past ten years, venture capital and private equity firms located south of the boarder have had no problem pumping capital into promising Scottish companies in need of expansion capital. However, it remains to be seen whether this will continue if independence is granted and there are questions over currency and customers.

Entrepreneurs at the early stage of building their businesses need as much support as possible, whether it is through investment, mentors, tax breaks or access to a wide customer pool. 

The coalition government has yet to come out and declare what would happen to the likes of EIS and SEIS if Scotland were to become independent, but the loss of such schemes could have a crippling effect on start-ups located there.

There would however be a lot to be gained by separating from the rest of the UK for Scotland. The country would be able to create an economy that was better suited to its six million population, rather than the 60 million of the UK. 

Scotland already makes big money from tourism, whiskey and food, it only remains to be seen whether this could be sustained an improved as an independent nation.

It is one of the most important votes Scottish nationals will make during their lifetimes, even more so than the vote which kept the UK in the EU back in 1975. Ironically, this new referendum could ultimately also see Scotland leave the EU.

Hunter Ruthven

Hunter Ruthven

Hunter was the Editor for GrowthBusiness.co.uk from 2012 to 2014, before moving on to Caspian Media Ltd to be Editor of Real Business.

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