2020 will go down in history as the year that delivered a huge shock to rural SMEs across Scotland. What has followed in 2021 has been a rollercoaster of restrictions easing and tightening, together with an erratic range of outputs for businesses. Elevator's Rural Director, Rachel Ross, discusses the impact this had and what the future of rural Scotland could look like.
"With many rural economies reliant on a smaller mix of industries than cities, higher than average self-employed workers and larger numbers of agriculture, food and hospitality businesses, the shock waves continue.
"The recent publication of Scottish Government’s ‘Businesses in Scotland 2020’ paper reported that SMEs accounted for 79.5% of private sector employment in remote rural areas, 69.2% in accessible rural areas, compared with 46.8% in the rest of Scotland. With many rural SMEs condensed into the tourism, agriculture and the food and drink sectors, the combined impact of Brexit and COVID have created a perfect storm and a significant impact – with serious and deteriorating labour shortage problems in many rural sectors. The media is focused on the lack of lorry drivers and food processers, but the more specific job shortages – such as chefs and agricultural workers, is now having a huge impact of the ability for small rural businesses to trade effectively and putting off new SMEs from starting.
"Just as the rollercoaster seemed to hit a high spot, with rural economies foreseeing a sunny summer of trade, the supply chain shortage has brought new challenges - reductions in menus, changes to opening hours, agricultural fields going unpicked - with some businesses now forced to simply close their doors – again. The ‘stay-cation’ boom has been much wobblier than anticipated and the impact on SMEs in rural areas far more pronounced. AXA UK and the Centre for Economics and Business Research (CEBR) published a worrying report this month, highlighting huge reductions in new SME start-ups across rural Scotland.
"We know that innovating during COVID was a national game-changer. Restaurant in-home meal kits and take-away services sprung up, while online wine tasting and cocktail making replaced going out. We are a nation of entrepreneurs; as this new wave of economic challenges rolls on, we need to identify new opportunities to drive our rural communities forward. Rural businesses need to use their proven agility and speed, the nimbleness that comes from quick decision making, whilst retaining the stability of community support, to help them innovate their way through life beyond COVID.
"The pandemic reignited communities across Scotland, forcing people to stay local and buy more locally, awakening interest and understanding of what is being produced and sold on our doorsteps. The slow food movement, the de-growth climate change movement and digital connectivity are all contributors to helping rural SMEs bounce back, but with different priorities than before. At Elevator, we are passionate about supporting the Entrepreneurial drive and ambition of all regions across Scotland. On average, 47% of the businesses we have worked with over the last three years have classified themselves as rural and we have the knowledge and expertise in our teams to help rural entrepreneurs start up and thrive.
"The latest Scottish Government drive for ’20-minute neighbourhoods’ will see local gain yet more importance as time moves on. Cooperation and collaboration happen naturally in rural communities and their in-built resilience will continue to evolve as people work together more easily, better connected to share resource and solve problems.
"Whilst 2021 remains turbulent, long-term prognosis looks strong for rural economies, with businesses well placed to draw on the lessons of the last months and use them as opportunities for improvement and development. Agility, collaboration and innovation will need focussed strategies to ensure success."
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