The Purpose of Business

Lorna Young - 16th September 2021

“Doing good is good for business” is an oft-repeated claim and one particularly relevant in the middle of Scotland’s Climate Week, a seven day celebration of the important climate contributions Scottish businesses are making. 

In fact, I heard a leader in the business support arena making precisely this claim very recently. It’s a nice soundbite but I think it misses the point. If we explore that missing-of-the-point it reveals a big opportunity to transform Scotland’s business support eco-system into one that enables positive economic transformation to happen more easily.

Last week FSB Scotland published a report called Rebuilding Our Strength. It’s a fantastic piece of work with some great ideas, but what caught my eye was a data snapshot at the start: 

• Small businesses account for two fifths (43%) of all private sector jobs in Scotland
• Despite making up 94% of businesses, Scotland’s micro-businesses receive only 5% of public procurement contracts by value
• Only 1 in 5 believe the Scottish Government values the achievements of people running their own business

Despite providing our local goods and services, and despite creating so many jobs, Scotland’s small business owners feel undervalued by their government. Plus, only a tiny proportion of them benefit from the transformative spend of the public purse. Scotland’s economy can be improved in all sorts of ways, but better supporting small business owners while buying their products and services would be a great place to start. 

I have the privilege of supporting some truly inspirational climate pioneers as clients – all of them at either start-up or micro-enterprise stage. Reflecting on my experience of working with mainly rurally located business owners has given me an insight into what the current business support network gets wrong,  and it’s pretty fundamental.  

It’s the assumption that small and micro business owners are driven by profit. For most of them that is simply not the case.   

Purpose – not profit - is the main driver behind many privately owned businesses in Scotland, particularly in rural areas. Passion comes a close second, tradition often third. Strong financial performance can actually be fairly far down their list of priorities. I believe Scotland’s economic development landscape has not really understood this, and what you don’t understand, you can’t respond effectively to.  

These business owners are not doing good BECAUSE it is good for business; rather business is the mechanism by which they can most effectively do the good.  Business is one of the means by which people can effect change; for themselves, for their community and for the wider world around them. 

This misunderstanding of the drivers of small enterprise has big repercussions, and that can be seen in the different support pathways offered to private sector small businesses compared to social enterprises. 

Speaking very generally, enabling resource seems much more accessible to social enterprises than to privately owned businesses, where the support tends to be more advisory in nature.  Social enterprises are assisted in making the world a better place, while privately owned small businesses are – on the whole - advised on how to make more money. For Scotland’s purpose driven entrepreneurs, there can be a big disconnect between their priorities and goals, and the support offered to them. 

This week I’ve been helping one of my climate-pioneer clients edit a piece of writing. This paragraph, describing their interactions with business support programmes over many years, explains the issue better than I ever could: 

“The big problem was always ‘what is the commercial benefit to the economy of your innovative project’ – what jobs and growth will it generate. Saving the world got no interest.  The support system that should be interested in transformation in production just wasn’t there. We have had grants for capital projects, we qualified for standard support schemes just as any other business would, but the support wasn’t for our innovation or climate-friendly system.”

This needs to change. 

What brought Scotland’s economy here, won’t take us to where we need to be in 10 years’ time. 

There’s a big opportunity to rethink Scotland’s skills and enterprise eco-system to create a culture that encourages systems transformation through purpose driven enterprise, starting with our small and micro business owners. 

This is important because change is inevitable, and in this climate emergency change is also necessary and extremely urgent. 

Scotland’s economic transformation could begin by understanding the crucial role of purpose within enterprise better, and then resourcing, supporting and enabling Scotland’s purpose-drive entrepreneurs to achieve their goals. 

Lorna Young is a Marketing & Rural Economic Development Consultant based in Dumfries