Performance of Scotland's small and medium sized businesses (SME's): insights from the Small Business Survey 2016

SME employers are a key part of Scotland’s economy, accounting for approximately 30% of companies and 40% of employment. This paper provides some insights into the performance of Scottish SMEs, drawing on data from the 2016 Small Business Survey. The data highlights that the proportion of Scottish SMEs that export overseas is lower than the UK average, but the gap is closing. A considerable proportion of non-exporting Scottish SMEs have goods and services suitable for the overseas market, suggesting there is an opportunity to increase exporting rates. Innovation rates amongst Scottish SMEs has declined, similar to UK trends and a declining proportion of SMEs in Scotland are seeking external finance to fund future growth. Finally, Scottish SMEs have lower growth ambition than other parts of the UK, with lower rates of planned training and innovation.