Business chief says indyref to blame for fall in number of Dundee business start-ups

New business start-ups stalled in Dundee last year due to uncertainty around the independence referendum, according to a business expert.

Despite being Scotland’s “Yes” city, the amount of new businesses dropped by 11% compared to figures from the previous year.

Dundee City Council has revealed the number of business start-ups assisted by the Business Gateway in the six months to September was 141, compared to 159 the previous year.

President of Dundee and Angus Chamber of Commerce, Tim Allan, claimed Dundee’s upward momentum was hurt by the debate about Scotland’s constitutional future.

He said: “Year on year the chamber of commerce has seen business confidence and business activity slip in Q3 compared to Q2.

“Much of the problem can be found due to the uncertainty around the referendum, which weighed heavily on the economy.

“Dundee has traditionally tended to lag behind the Scottish economy anyway, with economic activity below average compared to other parts of Scotland.”

Although the total number of new business start-ups in 2013-14 dropped to 286 from 303 the previous year, the number still compares favourably with the 253 set up in 2011-12 and 175 in 2010-11.

Mr Allan continued: “There is a marginal reduction, but I think that is a reflection of the fact that 2014 has had half a year of uncertainty and almost inertia because of the referendum.

“It will be more interesting to see if this is a trend in 2015.

“The answer is unlikely. Dundee is on an upward swing because the council and Scottish Government have invested money.”

Last week Dundee City Council development director Mike Galloway stated the £1 billion waterfront development would help transform the city’s economy, along with growth in the life sciences, renewables and digital media sectors.

Mr Allan agreed: “The V&A breaks ground in mid-2015, the railway station work is going to kick on and companies like ourselves, Unicorn Property Group, will start building flats at City Quay again in the middle of 2015. There is a real sense of confidence and momentum behind the city.”

A report to Dundee City Council’s scrutiny committee stated: “Although there is a 11% reduction in the number of business start-ups compared to the same period last year, it should be borne in mind that last year was a significant increase on the previous year and an exceptional performance.

“Dundee City Council delivers the Business Gateway contract for Tayside and has delivered 400 start-ups for Tayside for the first six months of this year compared to 390 for the same period last year. Start-up figures tend to level out over time.”

Concentrate on the positive

Starting a small business is no small undertaking, writes business editor Graham Huband.

Many of us dream of leaving the salaried rat race and becoming our own boss, but in reality it is only the very few who do.

It takes real guts to set out on your own, and anyone who does so is worthy of praise and admiration.

It can be all-consuming and there is always the risk of failure hanging over your head.

That is why I prefer to doff my cap to the 286 people who set up businesses in Dundee over the last 12 months rather than dwell on the fact the number of start-ups is slightly down on the previous year’s record high of 303.

There are legitimate reasons to explain the drop, and hopefully it will prove no more than a temporary blip.

Historically, Dundee has been an entrepreneurial city, and I strongly believe that remains the case to this day.

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