Mention entrepreneurship policy in Scotland and you’ll quickly discover that two divergent viewpoints exist, each held as passionately.
The first says that policy support should be focussed exclusively on high-growth potential start-ups, or scale-ups, for short.
The second prefers that efforts instead be focussed on community entrepreneurship, or scale-deeps .
Both views, individually held, are wrong.
It’s easy to understand the case for focussing on scale-ups. Those that break through to success create lots of relatively high-paying jobs and considerable tax revenues.
They also instil a helpful sense of confidence in the business community that Scotland can compete internationally, with the consequent ambition-raising that follows it. This can become a virtuous circle.
In contrast to scale-ups, which may employ hundreds or even thousands of people, scale-deeps usually employ less than 10 people.
This is why they are often dismissed as not worthy of policy support – the marginal cost of spending time and money on nurturing scale-deeps seems, at first glance, to significantly outweigh the marginal benefits of doing so.
But look again.
Scale-deeps drive the economy in three important ways: firstly, through their sheer number - provided that the right environment exists to support their formation - and secondly, because of their wide geographic distribution, bringing jobs to places that scale-ups usually don’t reach, and thirdly, because their product or service almost always directly benefits the location in which they are based.
This is rarely the case with scale-ups.
Scale-deeps directly raise the country’s wellbeing index and reduce its social security bill, and in a more uniform fashion. They are an integral part of a functioning, successful society.
Over decades, industrial policy has, in general, favoured either scale-up or scale-deep support, but not both.
This is a mistake, based on the erroneous belief that it costs twice as much to support both categories than to support either.
Such a belief ignores the considerable overlap in the respective support needs of early-stage scale-up or scale-deep founders. It also crucially ignores the symbiosis between the scale-up and scale-deep categories, and the fly-wheel effect that can be generated when both categories are well represented.
What is the essence of this symbiosis?
Successful scale-ups act as an attractor into entrepreneurship – nothing succeeds like success, after all. In the other direction, nurturing the creation of a large network of scale-deeps helps to normalise entrepreneurship within society.
High-growth start-ups emerge more frequently in a country that exhibits a general culture of entrepreneurship and that is at ease within that culture. They emerge rarely within an otherwise sterile entrepreneurial landscape.
To act only upon one category is a policy myopia that, in times past, has rendered our national strategy for entrepreneurship incomplete and incoherent.
It’s akin to attempting to grow giant redwoods without also nurturing the forest floor that brings them forth. Scotland needs scale-ups and scale-deeps, and they need each other. Our entrepreneurial development strategy must embrace this connection.
Mark Logan is chief entrepreneurial adviser to the Scottish Government
