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Economy and Enterprise
Industry Significance
Figure 14: Significance of Primary, Secondary and Tertiary Industries by Geographic Area, 2004
Source: Scottish Executive, ONS ( IDBR), 2006 (based on number of employees)
(Based on Scottish Executive Urban Rural Classification, 2005-2006)
Primary industries are defined as agriculture, forestry and fishing. Secondary industries include energy, mining and quarrying, manufacturing and construction. Tertiary industries are made up of wholesale, retail and repairs, hotels and restaurants, transport, financial services and education and health.
Figure 14 shows that the most significant industry in all areas in Scotland (based on employment), is tertiary industry, followed by secondary industry. The least significant industry in all areas, is primary industry, although it is more important in remote rural areas.
Figure 15: Industry Significance by Geographic Area, 2006
Source: Scottish Executive, ONS ( IDBR), 2006 (based on number of employees)
(Based on Scottish Executive Urban Rural Classification, 2005-2006)
Figure 15 shows that agriculture, forestry and fishing are the most significant in remote rural areas (in terms of number of employees) followed by education, health, social work and other community, social and personal services and wholesale, retail and repairs. Manufacturing is the most significant sector in accessible rural areas followed by financial intermediation, real estate, renting and business activities. Financial services is the most significant industry in the rest of Scotland, followed by education, health, social work and other community, social and personal services and wholesale, retail and repairs. The least significant industry in all areas is mining, quarrying and energy.
Economic Activity
Figure 16: Economic Activity by Geographic Area, 2006
Source: Annual Population Survey in Scotland, 2006
(Based on Scottish Executive Urban Rural Classification, 2005-2006)
Figure 16 shows that a higher proportion of people in rural areas are economically active (those employed or looking for work) than in the rest of Scotland. Inactivity rates (those neither employed or unemployed) are lower in rural Scotland than in the rest of Scotland. The main reasons for being economically inactive are long-term sickness or disability, being a student and looking after family. A slightly higher percentage of the working age population are in full time education or training in rest of Scotland than in rural areas.
The employment rate (the number of people employed as a percentage of the total population of working age) is again higher in rural Scotland than in the rest of Scotland. The unemployment rate (the number of people unemployed as a percentage of the number of economically active) is lowest in rural areas.
Of those employed, self-employment is higher in rural Scotland than in the rest of Scotland.
Income
Figure 17: Annual Net Income of Highest Income Householder and Partner by Geographic Area, 2005/2006
Source: Scottish Household Survey, 2005/2006
(Based on Scottish Executive Urban Rural Classification, 2005-2006)
Figure 17 presents net household income figures (for head of household and partner) by geographic area. The income figures include income from employment, benefits and other sources (after taxation and other deductions). The figures indicate that, in all areas, the highest proportion of households earn between £10,000 and £20,000.
Relative to the rest of Scotland, there is a higher percentage of households in rural areas with a net annual household income of over £20,000, especially in accessible rural areas.
Table 24: Income and Employment Deprivation by Geographic Area, 2006
| Remote Rural | Accessible Rural | Rest of Scotland |
|---|
Number of income deprived | 29,976 | 49,571 | 628,181 |
|---|
Number of employment deprived | 17,191 | 31,579 | 361,137 |
|---|
Percentage of total population that are income deprived | 9% | 8% | 15% |
|---|
Percentage of working age population that are employment deprived | 9% | 8% | 12% |
|---|
Source: Scottish Index of Multiple Deprivation, 2006 (based on data zones)
(Based on Scottish Executive Urban Rural Classification, 2005-2006)
Income deprivation is comprised of eight indicators including Income Support, Working Families Tax Credit, Job Seekers Allowance and Disability Tax Credits.
Employment deprivation is comprised of four indicators that identify those people that want to work, but due to unemployment, ill health or disability are excluded from the labour market. The indicators used are Unemployment Claimant Count, Incapacity Benefits, Disablement Allowance and Compulsory New Deal Participants.
Table 24 shows that the percentage of the total population that is income deprived is lower in rural areas than the rest of Scotland, and is lowest overall in accessible rural areas.
The percentage of the working age population that are employment deprived is also lower in rural areas than in the rest of Scotland.
Size of Business
Figure 18: Percentage of Employees by Size of Firm and Geographic Area, 2006
Source: Scottish Executive, ONS ( IDBR), 2006
(Based on Scottish Executive Urban Rural Classification, 2005-2006)
Figure 18 shows that employment associated with registered enterprises* varies across Scotland. Small businesses account for a high proportion of this employment in remote rural areas (84%) and are also common in accessible rural areas (60%). Large businesses account for over half of those employed in registered enterprises in the rest of Scotland (53%).
*A registered enterprise is registered for VAT and/or PAYE. This covers about 94% of employment in Scotland.
Table 25: Enterprise Start-ups by Geographic Area, 2004
| Remote Rural | Accessible Rural | Rest of Scotland |
|---|
Number of registrations | 1,630 | 3,965 | 5,960 |
|---|
% of all registrations | 14% | 34% | 52% |
|---|
Area population aged 16+ | 227,317 | 531,114 | 3,331,515 |
|---|
Start-ups per 10,000 population | 72 | 75 | 18 |
|---|
Start-ups per 1,000 firms | 55 | 74 | 91 |
|---|
Source: Scottish Executive, ONS ( IDBR), 2004
(Based on Scottish Executive Urban Rural Classification, 2003-2004)
Table 25 shows that rural areas accounted for 48% of all new business registrations in 2004. The start-up rates per head of population are higher in rural areas. The start-up rates per 1,000 firms are lower in rural areas than in the rest of Scotland.
Table 26: Growth Patterns of Scottish Businesses by Geographic Area, 2003
| Remote Rural | Accessible Rural | Rest of Scotland |
|---|
Sustained growth | 10% | 13% | 11% |
|---|
Contained growth | 7% | 7% | 9% |
|---|
New growth | 15% | 18% | 23% |
|---|
No growth | 68% | 62% | 57% |
|---|
Source: Annual Survey of Small Businesses, 2003
(Based on Scottish Executive Urban Rural Classification, 2003-2004)
Table 26 suggests that businesses in rest of Scotland are more likely to experience new growth, than those in rural areas. Businesses in rural areas are also more likely to experience no growth than businesses in the rest of Scotland.
Table 27: Recruitment of New Employees in the Past 12 Months by Geographic Area, 2003
| Remote Rural | Accessible Rural | Rest of Scotland |
|---|
Yes | 55% | 50% | 49% |
|---|
No | 45% | 50% | 51% |
|---|
Source: Annual Survey of Small Businesses, 2003
(Based on Scottish Executive Urban Rural Classification, 2003-2004)
Table 27 suggests that a higher percentage of businesses in rural areas recruited new employees in the past 12 months than businesses in the rest of Scotland.
Obstacles to Success of Business
Figure 19: Greatest Obstacle to Success of Business by Geographic Area, 2003
Source: Annual Survey of Small Businesses in Scotland, 2003
(Based on Scottish Executive Urban Rural Classification, 2003-2004)
Figure 19 shows that in remote rural areas, the greatest obstacle to success of a business is perceived to be regulation. In accessible rural areas, the greatest obstacle to success of a business is perceived to be either regulation or competition.
Table 28: Whether Current Public Transport Affects Ability to Recruit Staff by Geographic Area, 2003
| Remote Rural | Accessible Rural | Rest of Scotland |
|---|
Yes | 15% | 23% | 29% |
|---|
No - adequate public transport but other recruitment problems | 4% | 5% | 5% |
|---|
No - we have no recruitment problems | 80% | 72% | 66% |
|---|
Don't know | 2% | 2% | 0% |
|---|
Source: Annual Survey of Small Businesses, 2003
Columns may not add up to 100% due to rounding
(Based on Scottish Executive Urban Rural Classification, 2003-2004)
Table 28 shows that public transport provision is more likely to affect the recruitment of staff in rest of Scotland than in rural areas. This is reflected in the fact that a higher percentage of firms in rural areas indicate they have no recruitment problems, and also may reflect the higher use of private cars/vans in rural areas.
Table 29: Difficulty in Obtaining Finance from First Source by Geographic Area, 2003
| Remote Rural | Accessible Rural | Rest of Scotland |
|---|
Yes, unable to obtain any finance | 16% | 12% | 13% |
|---|
Yes, obtained some but not all | 5% | 3% | 8% |
|---|
Obtained all finance but with problems | 1% | 7% | 7% |
|---|
No difficulties | 77% | 77% | 69% |
|---|
Don't know | 1% | 3% | 1% |
|---|
Unwilling to answer | 0% | 0% | 3% |
|---|
Source: Annual Survey of Small Businesses, 2003
(Based on Scottish Executive Urban Rural Classification, 2003-2004)
Table 29 shows that a higher percentage of businesses in remote rural areas, relative to other areas, were unable to obtain any finance from their first source. Despite this, businesses in remote rural areas were most likely to obtain finance from their first source with no difficulties.
Businesses in accessible rural areas and rest of Scotland were more likely to obtain all their finance from their first source, but with difficulty. In the case of businesses in the rest of Scotland, they were more likely to receive some, but not all, of their finance from their first source.
Figure 20: Health of the Business by Geographic Area, 2003
Source: Annual Survey of Small Businesses in Scotland, 2003
(Based on Scottish Executive Urban Rural Classification, 2003-2004)
Figure 20 shows business perceptions about the health of their business. Businesses in remote rural areas had the highest percentage saying their business was doing very well, but also the highest percentage saying their businesses was not doing very well. In accessible rural areas and in rest of Scotland, businesses were more inclined to say their businesses was either doing quite well or adequately.
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