Centre for Public Policy

Quick Insight on the Programme for Government 2025 by Dr. Saurabh Lall, Senior Lecturer, Adam Smith Business School, University of Glasgow.

Yesterday, the Scottish Government released their programme for growing the economy, and the commitment to maintain and strengthen Scotland’s place as the UK’s most attractive investment destination outside of London and South-East England. The programme also commits to investing in women entrepreneurs by more opportunities for competitive funding, pre-start support, and improving export opportunities. These initiatives represent a significant opportunity for accelerating growth by closing the gender gap in Scottish entrepreneurship and innovation.  

A team of researchers from Scottish Universities (University of Glasgow, University of Strathclyde, and University of Edinburgh) have found that there continue to be significant gender gaps in entrepreneurship and innovation in Scotland. The share of female-led ventures with more than 10 employees in Scotland has declined from 7.4% in 2023 to 4.5% in 2024. Similarly, the share of fast-growth companies that are female-led dropped from 12.9% in 2023 to 9.2% in 2024. A key factor in entrepreneurial growth is the ability of ventures to attract investment, and female entrepreneurs struggle to attract financing, even when their ventures have similar or better performance to male-led ventures. A mere 2% of institutional investment goes to women-led ventures in Scotland. Good ideas don’t get funded, and investors overlook promising investments.  

But we can tackle this gender gap. In a randomized-controlled trial that New York University researcher Amisha Miller and I conducted with investors around the world, we found that prompting investors to ask questions more consistently and systematically led to a 5X increase in the chances of women-led startups getting funded.  

Rooted in our experience, our advice to Deputy First Minister Kate Forbes, who leads on female entrepreneurship is: 

1. Work in partnership with investors (angel networks, venture capital funds) and development investment banks (e.g., Scottish National Investment Bank, British Business Bank) to develop more systematic processes to evaluate ventures. These processes do not require investors to treat female entrepreneurs differently – rather, they aim to help investors treat all entrepreneurs consistently.  
2. Help strengthen the capacity of investment organisations to develop stronger female representation in investment committees, who are then more likely to correctly identify promising female-led ventures.  
3. Continue to support the pipeline of promising female-led startups by investing in inclusive incubators, accelerators, and other entrepreneurial development programs across Scotland.  

Implementing these steps would help build on the promise of Ana Stewart and Mark Logan’s 2023 Pathways Forward report by directing attention not only to female entrepreneurs, but also to the investment community across Scotland. Ultimately, these changes can help make entrepreneurship in Scotland more equitable and productive.  

 

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First published: 7 May 2025