Scotland's National Strategy for Economic Transformation Programme 1: Entrepreneurial People and Culture Equality Impact Assessment (Record and Results)

Equality Impact Assessment – Results

Title of Policy

Scotland's National Strategy for Economic Transformation - Programme 1: Entrepreneurial People and Culture

Summary of aims and desired outcomes of Policy

The aim of Programme 1: Entrepreneurial People and Culture is to establish Scotland as a world-class entrepreneurial nation founded on a culture that encourages, promotes and celebrates entrepreneurial activity in every sector of our economy.

The desired outcomes of this policy are:

• the creation of new companies and scaling of successful companies
• an innovative public and private sector that adopts an entrepreneurial mind-set
• world-leading infrastructure to support high-growth companies
• attraction and retention of international talent and investment

Directorate

Economic Development Directorate

Executive Summary

The Equality Act 2010 places a duty (known as the Public Sector Equality Duty, or PSED) on public authorities to have due regard to the need to eliminate discrimination, advance equality of opportunity and promote good relations between people who share a Protected Characteristic and those who do not. The Equality Act 2010 (Specific Duties) (Scotland) Regulations 2012 (Regulation 5) require public authorities to assess and review policies and practices against the three needs of the PSED.

Therefore, the Scottish Government undertook an Equality Impact Assessment (EQIA) as part of the process to develop the Strategy.

An EQIA aims to consider how a policy may impact upon people with Protected Characteristics. Equality legislation covers the Protected Characteristics of: age, disability, gender reassignment, sex, pregnancy and maternity, marriage and civil partnership, race, religion and belief, and sexual orientation.

This EQIA has been undertaken to consider the impacts on equality on the development of Programme 1 of the NSET. Specifically, it assesses any impacts of applying a proposed new or revised policy or practice against the needs relevant to a public authority's duty to meet the PSED. The needs are to:

• Eliminate discrimination, harassment and victimisation;
• Advance equality of opportunity; and
• Foster good relations.

This EQIA has found that, although there are numerous challenges facing people with Protected Characteristics in participating in entrepreneurial careers, Programme 1 aims to positively impact and support people with Protected Characteristics access entrepreneurial careers.

Challenges in accessing entrepreneurial careers, which are shared by all groups with Protected Characteristics to different degrees include: limited access to investment capital and networks of support, household poverty (making it harder for individuals to invest time in business activities which don't have the prospect of an immediate/regular secure financial return) and barriers to accessing training and education.

To encourage more people to choose entrepreneurship as their career, thereafter enabling them to access better employment opportunities and widen their range of viable career choices, we will offer support to help them overcome existing social and economic barriers to starting a business, thus leveraging entrepreneurship to create attractive and accessible pathways to improved social justice and economic fairness.

This support will be monitored and adjusted as/if required, taking account of changes in the economic environment in order to ensure it continues to benefit those groups identified as being most at risk of poverty and exclusion.

Actions in NSET Programme 1 that aim to help overcome barriers and positively impact people with Protected Characteristics include:

• Embedding entrepreneurship in the Young Person's Guarantee;
• Adapting and reviewing Scotland's apprenticeship system so that it is available for start-ups and early scale-ups to use, focusing in particular on providing opportunities for women and other under-represented groups and on specific skills, such as digital;
• Proactively promoting business start-up opportunities to those at risk of redundancy through the Partnership Action for Continuing Employment (PACE) programme; and
• Setting targets and focusing on providing access to support programmes from amongst the most under-represented groups, particularly women, those on low incomes and those without qualifications at further or higher education, including the six priority groups at greatest risk of child poverty. This would include the offer of financial support for those who are unable to afford time out from a full-time job or caring responsibilities to develop ideas.

The actions on supporting under-representded groups in particular has the potential to support people with Protected Characteristics not mentioned. Therefore specific support for other groups with Protected Characteristics will be considered during the planning and delivery phase of this action.

For all the groups with Protected Characteristics, except marriage and civil partnership which has not been considered (see above), we do not have a full intersectional picture of what barriers these groups face in relation to entrepreneurship. The only exception is the Ana Stewart review on women's entrepreneurship which is looking to close knowledge gaps related to the experiences of women in entrepreneurship.

We will therefore consider with analysts how to fill knowledge gaps for all Protected Characteristics as actions progress. This data gathering exercise will feed into the project-level EQIAs which will be developed for the four projects as policies develop further. Timelines will be shared alongside future delivery plans.

Background

The NSET forms part of the Scottish Government's wider ambitions to develop a system which prioritises the collective wellbeing of current and future generations. The NSET is a route to a strong economy with good, secure and well-paid jobs and growing businesses, maximising Scotland's strengths and natural assets to increase prosperity, productivity and international competitiveness.

The aim of Programme 1: Entrepreneurial People and Culture is to establish Scotland as a world-class entrepreneurial nation founded on a culture that encourages, promotes and celebrates entrepreneurial activity in every sector of our economy.

Programme 1: Entrepreneurial People and Culture is comprised of four projects:

• Project 1 - Embed first rate entrepreneurial learning across the education and skills systems by promoting the best available project-based entrepreneurial learning across the school and post-16 education curricula;
• Project 2 - Create major, new world-class entrepreneurial infrastructure of institutions and programmes providing a high intensity pathway for high growth companies;
• Project 3 - Attract and retain the very best entrepreneurial talent from at home and abroad; and
• Project 4 - Build an entrepreneurial mind-set in every sector of our economy, expanding the application of entrepreneurial thinking and approaches to public service reform.

Scope

To deliver NSET's transformational Programmes of Action in a way that maximises opportunities to advance equality and human rights, we are undertaking work on improving our equality evidence base. Economy analysts are contributing to the Scottish Government Equality Data Improvement Programme (EDIP), to improve the quality of equality data that is available to use in policy development, implementation and monitoring. To address some of the known gaps in equality evidence, we launched the first phase of EDIP in April 2021.

A written stakeholder consultation was held from July until October 2022 on a draft plan to improve and strengthen Scotland's equality evidence base. This consultation was supplemented by stakeholder engagement workshops held throughout September 2022. The responses received from stakeholders will help shape the improvement plan, which will form the basis of Scotland's new Equality Evidence Strategy. It is anticipated that the strategy will be launched by the end of February 2023 and will run to 2025. It will help identify gaps in equality evidence and improve our equality evidence base.

The development of NSET was informed by a wide evidence base. In 2021, the Scottish Government established a new Advisory Council for Economic Transformation, including industry representatives, trade unions, academics, and economist, to shape the strategy. It also engaged extensively with a wide range of stakeholders across Scotland, including through a semi-formal, 9-week consultation that received over 260 responses. At the time of publication of NSET, the Scottish Government also published the NSET Equality Position Statement which outlined the equality evidence that was considered during the production of the NSET.

During the development of NSET and its Delivery Plans, a number of Ministerial and official-led roundtables and meetings with equality and human rights stakeholders took place. These include:

• Ministerial engagements with the Women's Leadership Centre and the Poverty and Inequality Commission in June 2021;
• Equality and Human Rights roundtable with officials in September 2021;
• Equality and Human Rights roundtable with officials in November 2021;
• Equality and Human Rights Roundtable hosted by the Cabinet Secretary for Finance and the Economy in January 2022;
• Equality and Human Rights Roundtable hosted by the Cabinet Secretary for Finance and the Economy in May 2022; and
• Meeting between DG Economy and the Equality and Human Rights Commission in August 2022.

The Stewart Review on gender in enterprise has involved extensive engagement with individual entrepreneurs as well as public, private and third sector organisations from education, investment and business support. This has included discussion with minority ethnic business representatives given the intersectional nature of many of the challenges the Review aims to address.

Another piece of work that feeds into Programme 1 and continues to consult stakeholders widely is The Scottish Tech Ecosystem Review (STER), commissioned by the Cabinet Secretary for Finance and Economy in 2020 and written by Professor Mark Logan^[30]. Industry engagement took place through a variety of means including the STER advisory board made up of Scotland's top entrepreneurs and tech leaders, and continues to take place through the Computing Science in Schools Working Group and Senior Steering Group which act as vehicles for consultation with a wide range of education stakeholders in Scotland.

Policy officials working on STER and Programme 1 also continue to engage and consult with entrepreneurs and organisations representing and supporting people with Protected Characteristics.

This EQIA has identified that additional data would be helpful pertaining to entrepreneurship and the following Protected Characteristics: age (16-24 and 50+), disability, pregnancy and maternity, gender reassignment, sexual orientation, race and religion or belief. We also do not have a full picture of the barriers on entrepreneurship and would benefit from more information about these groups. With regards to data, the only exception is for the Protected Characteristic of sex as the Ana Stewart review on women's entrepreneurship is currently underway to close knowledge gaps related to the experiences of women in entrepreneurship.

We will therefore consider with analysts how to fill knowledge gaps for all Protected Characteristics as programmes progress. This data gathering exercise will feed into future EQIAs which will be developed for the four projects as policies develop further. Timelines will be shared alongside future delivery plans.

Key Findings

The effects of COVID-19 and the cost of living crises have, and continue to, impact disproportionately on those who have been already experiencing inequalities. In the context of the current economic position, the Programme 1 recognises the need to provide additional support for those groups and people most at risk of poverty and exclusion.

To ensure more people are able to choose entrepreneurship as a viable career, the Programme 1 of the NSET looks at various ways to overcome current social and economic barriers to starting a business and make entrepreneurship an attractive and accessible road to social mobility and economic fairness.

Programme 1 recognises this by targeting particular priority groups and offering appropriate additional support in a number of its programmes.

Summary of key findings for each of the Protected Characteristics is set out below:

Age

Programme 1 will have significant positive impacts on young people (16-24) in particular as policies in this programme aim to support developing young people's entrepreneurial journeys: embedding entrepreneurship in the Young Person's Guarantee, reviewing the apprenticeship system, creating a pathway to role models and promoting project-based entrepreneurial learning across the school and post-16 education curricula.

Actions under Project 1 on embedding first rate entrepreneurial learning across the school and post-16 curricula seek to advance equality of opportunity by upskilling young people to thrive in our current and future economy.

Two examples of actions in Programme 1 that will have a positive impact on fostering good relations between different age groups are:

• Actions targeting those at the post-16 level and offering apprenticeships which have the capacity to bring together people from a range of age backgrounds; and
• A mentoring programme which will match up people from different backgrounds, experiences and ages.

The TEA rate amongst people who are between 55-64 year-old is the lowest amongst the age groups at 6.6%^[31]. People in this group are also at particular risk of exclusion. Despite the general increase in internet access at home (42% in 2003; 93%^[32] in 2020)^[33], digital participation is generally lower among the older population and average internet use decreases with age^[34]. In addition, those aged over 50 face employment barriers in three key areas: communities, access to services and financial security^[35]. Ageism, exclusion and lack of willingness to recognise the skills and experience of the older workforce also present employment barriers for this group^[36].

During future development and delivery of policies, further consultations will be carried out with stakeholders to understand what type of support will be needed to attract and support younger entrepreneurs (16-25) and older entrepreneurs (55+). We will also discuss and consider with analysts how data gaps on entrepreneurship and these groups can be improved.

Disability

Actions in Programme 1 aim to promote equal opportunities and equality and have scope to positively impact disabled people. To ensure the impact is positive, we will engage with disabled people and groups as policies develop.

During stakeholder consultations, stakeholders suggested that the delivery of new, good, green jobs should be used to address the disability employment gap and be made available to disabled people and also other underrepresented groups.

Our national Tech Scaler network, which is government backed and part of the Scottish Government's economic policy plans^[37], offers a platform for commercial education, enterprise advice and support both online and off-line, ensuring that opportunities are available equally to anyone in Scotland regardless of individual circumstances or background. As Tech Scaler and the Pre-Scalers hubs mentioned in NSET are connected in aim, a similar approach will also be considered during the development and delivery of the Pre-Scaler hubs and any other physical infrastructure.

While no material impact has been identified to date that would hinder the promotion of good relations between disabled and non-disabled people, it is anticipated that successful delivery in line with our commitments to leverage assets to address barriers to opportunity and access should have a positive impact on this need.

During future development and delivery of policies, further consultations will be carried out with stakeholders to understand what type of support will be needed to attract and support disabled people and entrepreneurs. We will also discuss and consider with analysts how data gaps on entrepreneurship and this group can be improved.

Neurodiversity

Actions in Programme 1 aim to promote equal opportunities and equality and have a scope to address barriers to access and positively impact neurodivergent people. To ensure the impact is positive, we will engage with neurodivergent people and groups as policies are further developed.

Research by Skills Development Scotland (SDS) on Neurodiversity and Tech in Scotland (2020) found that 1 in 10 people in Scotland are neurodivergent and that there is also research indicating that people with ADHD and dyslexia in particular can display a specific strength for entrepreneurialism. The same research also points towards neurodivergent people showing particular strengths in creativity and innovation^[38].

While no material impact has been identified to date that would hinder the promotion of good relations between neurodivergent and neurotypical people, it is anticipated that successful delivery in line with our commitments to leverage assets to address barriers to opportunity and access should have a positive impact on promoting relations between these groups.

During future development and delivery of policies, further consultations will be carried out with stakeholders to understand what type of support will be needed to attract and support neurodivergent people into entrepreneurial careers. We will also continue to draw on the expertise gathered by organisations like SDS and discuss and consider with analysts how data gaps on entrepreneurship and this group can be improved.

Sex

The Global Entrepreneurship Monitor (2022) found that among TEA entrepreneurs, there remains a significant difference between males and females in terms of the extent to which "to earn a living because jobs are scarce" motivated the entrepreneurial activity^[39].

Within Programme 1 there are various work streams underway to advance equality of opportunity and support more women into entrepreneurial careers and to support the upskilling of women. Therefore Programme 1 of the NSET is expected to have a positive impact on the ability for women to choose and advance a career in entrepreneurship.

The NSET recognises that there is a considerable gender gap in Scotland when it comes to entrepreneurship and part of the aims of the NSET are about bridging these structural and entrenched inequalities.

The Ana Stewart review of women's entrepreneurship in Scotland in particular will provide strong support, data and recommendations to ensure more women and girls are supported in continuing and able to start their entrepreneurship journeys. The review will inform the design and delivery of policies in this area.

While no material impact has been identified to date that would hinder the promotion of good relations between women and men, it is anticipated that successful delivery in line with our commitments to leverage assets to address barriers to opportunity and access should have a positive impact on promoting relations between these groups.

Pregnancy and maternity

Actions in Programme 1 aim to promote equal opportunities and equality and have scope to positively impact those who are pregnant and those caring for children (most of whom identify as women).

During NSET consultations stakeholders emphasised the importance of unpaid care and the care sector for gender equality, and more broadly as part of the foundation economy in many communities across Scotland. Stakeholders called for the care sector to be reflected in the strategy as a priority and strategic sector, and, with women being more likely to take unpaid leave to care for children than men, they highlighted that action on affordable childcare was critical for a gender-equal economic recovery.

Research and stakeholder engagement has shown that pregnant people and parents (women in particular) and households with a single earner, struggle more with cashflow and the resources and time to start an entrepreneurial career.

In addition, job safety will be important for many people, including those in the most precarious situations. Therefore, to advance equality of opportunity, the NSET Programme 1 commits to providing access to support programmes to those from the most under-represented groups, particularly women, those on low incomes and those without qualifications at further or higher education. This would be delivered through the offer of financial support for those who are unable to afford time out from a full-time job or caring responsibilities, to develop ideas to start a business.

While no material impact has been identified to date that would hinder the promotion of good relations between pregnant people, those caring for children and those who are not, it is anticipated that successful delivery in line with our commitments to leverage assets to address barriers to opportunity and access should have a positive impact on promoting relations between these groups.

During future development and delivery of policies, further consultations will be carried out with stakeholders to understand what type of support is needed to attract and support pregnant entrepreneurs and entrepreneurs caring for children (most of whom are women). We will also discuss and consider with analysts how data gaps on entrepreneurship and this group can be improved.

Gender reassignment

Actions in Programme 1 aim to promote equal opportunities and equality and have scope to address barriers to access and positively impact transgender people and entrepreneurs.

Although data on transgender people is scarce, data has been collected that suggest towards trans students experiencing harassment and discrimination at HE institutions and, for some, this has a significant negative impact on their studies, future plans and skills^[40].

While no material impact has been identified to date that would hinder the promotion of good relations between transgender and cisgender people, it is anticipated that successful delivery in line with our commitments to leverage assets to address barriers to opportunity and access should have a positive impact on promoting relations between these groups.

During future development and delivery of policies, further consultations will be carried out with stakeholders to understand what type of support is needed to attract transgender entrepreneurs. We will also discuss and consider with analysts how data gaps on entrepreneurship and this group can be improved.

Sexual Orientation

Actions in Programme 1 aim to promote equal opportunities and equality and have scope to positively impact LGBT+ people and entrepreneurs. To ensure the impact is positive, we will engage with LGBT+ people and groups as policies develop.

Whilst attitudes towards lesbian, gay and bisexual people have become more positive over the past decade in Scotland, they continue to face a range of inequalities and disadvantage across a number of areas and settings including employment, healthcare and education.

Compared to heterosexual adults, lesbian, gay, bisexual or other adults were more likely to be younger, live in deprived areas, report bad general health, be unemployed and have a degree^[41].

While no material impact, has been identified to date, that would hinder the promotion of good relations between LGBT+ people and heterosexual people, it is anticipated that successful delivery in line with our commitments to leverage assets to address barriers to opportunity and access should have a positive impact on promoting relations between these groups.

During future development and delivery of policies, further consultations will be carried out with stakeholders to understand what type of support is needed to attract and support LGBT+ people.

Race

Actions in Programme 1 aim to promote equal opportunities and equality and have scope to positively impact entrepreneurs and people from minority ethnic backgrounds. To ensure the impact is positive, we will engage with minority ethnic entrepreneurs and people as policies develop

Poverty rates for people in minority ethnic households are higher than for the general population in Scotland and minority ethnic people are more likely to be in relative poverty after housing costs^[42].

Minority ethnic families are also most at risk of child poverty (38% of children in minority ethnic families were in relative poverty in 2017-20 compared to 24% of all children in Scotland), and families from some minority ethnic groups are more likely to have three or more children, putting them at higher risk of child poverty^[43].

Some minority ethnic households are also more likely to live in the most deprived areas in Scotland compared to white Scottish/British households^[44].

Analysis by ethnicity shows a TEA^[45] rate of 15.5% amongst Scotland's non-white population, which is higher than for the general population at 9.2% in 2021. For some, however, entrepreneurial activity may be partly undertaken as a result of discrimination in the labour market.

Consultation found that stakeholders highlighted that there is a lack of representation of ethnic minorities in policy-making processes and that black and minority ethnic business owners, whilst very seldom included, have a substantial footprint across Scotland. They emphasised that diversity needs to be harnessed across Scotland's business community and that diversity must be valued in order to drive innovation and deliver revenue growth.

While no material impact has been identified to date that would hinder the promotion of good race relations it is anticipated that successful delivery in line with our commitments to leverage assets to address barriers to opportunity and access should have a positive impact on promoting relations between these groups.

During future development and delivery of policies, further consultations will be carried out with stakeholders to understand what type of support is needed to attract and support minority ethnic entrepreneurs.

Religion or belief

Actions in Programme 1 aim to promote equal opportunities and equality and have scope to positively impact people of different religions and beliefs.

We know that some religions are at more risk of discrimination. In 2015-17, relative poverty rates were considerably higher for Muslim adults (52%) compared to adults overall (18%).

While no material impact has been identified to date that would hinder the promotion of good relations for this Protected Characteristic, it is anticipated that successful delivery in line with our commitments to leverage assets to address barriers to opportunity and access should have a positive impact on promoting relations between these groups.

There is relatively limited data on religion and entrepreneurship for Scotland. Therefore, during future development and delivery of policies, further consultations should be carried out with stakeholders to understand what type of support will be needed to attract and support people of different religions or beliefs.

Marriage and Civil Partnership

This has been considered but is not seen as applicable as Equality impact assessment within the Scottish Government does not require assessment

against the Protected Characteristic of Marriage and Civil Partnership unless the policy or practice relates to work, for example HR policies and practices.

Conclusion

The EQIA did not identify any negative impacts on people with Protected Characteristics from implementation of this policy.

There are numerous areas within Programme 1 that will have a positive impact on people with Protected Characteristics or groups. These include: projects targeting support for young people and programmes targeting support to the most under-represented groups such as women and those on low incomes and without qualifications at further or higher education.

Specific policy interventions for actions within Programme 1 are yet to be developed. As these policies develop they will require their own EQIA to ensure that the specific barriers for each Protected Characteristic are fully considered.

This EQIA analysis will be kept under regular review, with new data and evidence analysed as we improve data collection for continuous learning and development to monitor the impact of the Strategy on people with Protected Characteristics.

This EQIA has also found that intersectional data gaps exist for entrepreneurship and all the Protected Charactersitics. The only exception is the Ana Stewart review on women's entrepreneurship which is looking to close knowledge gaps related to the experiences of women in entrepreneurship.

We will therefore consider with analysts how to fill knowledge gaps for all Protected Characteristics as actions progress. This data gathering exercise will feed into the project-level EQIAs which will be developed for the four projects as policies develop further. Timelines will be shared alongside future delivery plans.