There has been an increased level of interest in the self-employed workforce in Scotland, due to the economic challenges arising from the coronavirus (COVID-19) pandemic. On the back of a timely release from the Office for National statistics (ONS) on the self-employed in the UK, this blog considers statistics on the self-employed in Scotland.
Looking at the data shows that there are many similarities between Scotland and the rest of the UK, when looking at the characteristics of the self-employed workforce. For example:
- 35.5% are female compared to 33.5% in the UK overall
- 28.0% work part-time in Scotland compared to 30.0% in the UK
- 71.4% are aged 35 to 64 compared to 70.5% in the UK
However, there are also characteristics which make Scotland different from the rest of the UK. This blog looks at those differences.
Scotland has the lowest proportion of self-employed people of the nations and regions of the UK
At 12.4% of the workforce, Scotland has the lowest proportion of the workforce who are self-employed. London has the highest at 18.6%. This means that almost 1 in 5 workers in London are self-employed, compared to 1 in 8 in Scotland.
Scotland has the second-highest proportion of self-employed workers with employees
In Scotland, 19.3% of those who are self-employed have employees compared to 15.6% in the UK. This means that around 1 in 5 of the self-employed in Scotland have employees, compared to around 1 in 7 in the UK overall.
Scotland has the third-highest proportion of self-employed workers with a degree qualification or higher
In Scotland, 35% of the self-employed have a degree qualification or higher. While this is the third highest in the UK, it is similar to most other nations and regions of the UK at around 1 in 3. London is the highest with over 50% of the self-employed having a degree qualification or higher, while Northern Ireland has the lowest proportion at 23%
Scotland has the lowest proportion of “skilled trade” self-employed workers
In Scotland, 29.8% of “skilled trade” workers, which includes construction, agriculture, and food preparation workers, are self-employed. This is under the UK average of 37% but is similar to the North East (30.0%) and Yorkshire and The Humber region (31.1%).
This could in part be explained by the fact Scotland has a higher proportion of registered construction companies compared to the UK as a whole – 10.9% compared to 6.5%. In fact, Scotland has around 10% of the UK’s construction SMEs and around 16% of its large businesses (those with over 250 staff). Thus, it would suggest that these workers are more likely to be paid employees than self-employed.
Scotland has the lowest proportion of “Wholesale, retail, accommodation, and food service” self-employed workers
In Scotland, 7.7% of “Wholesale, retail, accommodation, and food service workers” are self-employed. This is below the UK figure of 9.8%. The South West of England has the highest proportion at 12.9%.
These differences can in part be explained by structural variances in the Scottish economy relative to the other nations and regions. For example, in the accommodation and food service industry, Scotland has more small and medium businesses rather than micro businesses (those that have between 0 and 9 employees), relative to the other UK nations.
How does this compare to Scotland’s business base?
The above analysis focussed on the people aspect of self-employment in Scotland. How does this compare with what we know about Scotland’s business base? We know Scotland had 356,550 private sector businesses (registered and unregistered and excluding central and local government) operating in Scotland in 2019. Characteristics of the business base include:
- Unregistered enterprises are sole proprietorships and partnerships that are not large enough to be VAT registered and are not PAYE registered. These represent approximately one in two of all enterprises.
- Sole traders (which can be registered and unregistered depending on VAT levels) are 69.3% of the business stock.
- Medium (50-249 employees) and large (250+ employees) make up just 1.8% of the business base.
These statistics show that sole traders and the self-employed are a very important part of Scotland’s business base.
While there are similarities in the self-employed population in Scotland with the rest of the UK, there are also some differences which provide Scotland with different enterprise and entrepreneurial challenges. With the focus at the moment on supporting the economy, Scotland’s higher proportion of self-employed people with staff means that it’s more likely these people will be looking for business support as compared to self-employment support. In the longer term, the relatively low level of self-employment compared to the rest of the UK poses questions about the nature of entrepreneurial policy support. Is Scottish policy doing enough to create a culture and environment of entrepreneurship?
Andrew Aiton, Data Visualisation Manager and Alison O’Connor, Senior Analyst, Financial Scrutiny Unit
Cover image: Pixabay