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Economy and Enterprise
Industry Size
Figure 15: Employment in Primary, Secondary and Tertiary Sectors and in the Public Sector by Geographic Area, 2007
Source: Scottish Government, ONS ( IDBR), 2007
(Based on Scottish Government Urban Rural Classification, 2007-2008)
Primary sector industries are defined as agriculture, forestry and fishing. Secondary industries include energy, mining and quarrying, manufacturing and construction. Tertiary sector industries are made up of wholesale, retail and repair, hotels and restaurants, transport, financial services and education and health.
Figure 15 shows employment in registered enterprises* in Scotland. In all areas in Scotland the tertiary sector is the most significant in terms of employment. The smallest sector in all areas is primary industry although it is more important in remote rural areas. The public sector accounts for a fifth of employment in rural areas and a quarter of employment in the rest of Scotland.
* A registered enterprise is registered for VAT and/or PAYE.
Figure 16: Industry Size by Geographic Area, 2007
Source: Scottish Government, ONS ( IDBR), 2007 (based on employment)
(Based on Scottish Government Urban Rural Classification, 2007-2008)
Figure 16 shows the distribution of employment across sectors, with workers in the public sector shown as a single category. Roughly two thirds of these public sector workers are employed in 'Education, health, social work and other community, social and personal services'.
In the private sector, in remote rural areas 'Agriculture, forestry and fishing' is the biggest employer followed by 'Hotels and restaurants'.
In accessible rural areas, 'Manufacturing' and 'Financial intermediation, Real estate, renting and business activities' are the two most significant sectors.
Agriculture, forestry and fishing is a sector that shows great difference across Scotland accounting for 16% of workers in remote rural areas compared to less than 1% in the rest of Scotland.
Economic Activity
Figure 17: Economic Activity by Geographic Area, 2007
Source: Annual Population Survey, 2007
Note: The above figures are based on the working age population except for the
Unemployment rate which is based on the Economically Active population aged 16 and over.
(Based on Scottish Government Urban Rural Classification, 2007-2008)
Figure 17 shows that a higher proportion of people in rural areas are economically active ( i.e. employed or looking for work) than in the rest of Scotland. Correspondingly, inactivity rates (those neither employed nor 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 higher percentage of the working age population is either employed, in education or training in rural areas than in the rest of Scotland.
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 economically active) is lowest in rural areas.
Table 24: Employment Rates by Geographic Area, 2007
| Remote
Rural | Accessible
Rural | Rest of
Scotland |
|---|
Working age employment rates for: |
|---|
Male | 82% | 85% | 78% |
|---|
Female | 75% | 77% | 72% |
|---|
Aged over 50 | 75% | 78% | 70% |
|---|
Aged over 50 and Male | 77% | 78% | 70% |
|---|
Aged over 50 and Female | 71% | 77% | 69% |
|---|
Source: Annual Population Survey, 2007
(Based on Scottish Government Urban Rural Classification, 2007-2008)
Table 24 shows that the employment rates are much higher for all sub-groups in the table in rural areas (particularly accessible rural areas) compared to rest of Scotland. This difference is particularly visible for those aged over 50. Of men aged over 50 to retirement age, a higher percentage of those in rural areas are employed compared to those in rest of Scotland. 77% of females aged over 50 to retirement age in accessible rural areas are employed compared to 71% in remote rural and 69% in rest of Scotland.
Table 25: Patterns of Work by Geographic Area, 2007
| Remote
Rural | Accessible
Rural | Rest of
Scotland |
|---|
Percentage of employed males who are: |
|---|
Self-employed | 25% | 23% | 12% |
|---|
Working part-time | 8% | 9% | 9% |
|---|
With a second job | 6% | 3% | 3% |
|---|
Homeworkers* | 24% | 22% | 9% |
|---|
Percentage of employed females who are: |
|---|
Self-employed | 14% | 10% | 5% |
|---|
Working part-time | 49% | 43% | 38% |
|---|
With a second job | 11% | 5% | 4% |
|---|
Homeworkers* | 14% | 11% | 5% |
|---|
Percentage of all employed who are: |
|---|
Self-employed | 20% | 17% | 9% |
|---|
Working part-time | 26% | 24% | 23% |
|---|
With a second job | 8% | 4% | 3% |
|---|
Homeworkers* | 20% | 17% | 7% |
|---|
Source: Annual Population Survey in Scotland, 2007
Note: Excludes people on government employment and training schemes.
*Homeworkers includes those who work mainly in their own home as well as those who work in different places using home as a base.
(Based on Scottish Government Urban Rural Classification, 2007-2008)
Table 25 shows that self-employment is twice as common in rural Scotland as in the rest of Scotland. Of employed males in remote rural areas, 25% are self-employed.
Whilst percentages of men working part-time are similar across Scotland, women are much more likely to work part-time, particularly in remote rural areas where almost half the female workers work part-time.
The percentage of employed people in remote rural areas who have a second job (8%) is twice the percentage in accessible rural or the rest of Scotland (4% and 3% respectively).
A greater percentage of those employed in rural areas (particularly remote rural) are homeworkers ( i.e. work mainly in their own home as well as those who work in different places using home as a base). Almost a quarter of males employed in remote rural areas are homeworkers.
Earnings
Table 26: Gross Annual Pay for Full-time Employees by Geographic Area, 2007
| Remote
Rural | Accessible
Rural | Rest of
Scotland |
|---|
Annual pay (median gross) | £23,248 | £25,371 | £22,659 |
|---|
Source: Annual Survey of Hours and Earnings
a Employees on adult rates who have been in the same job for more than a year.
b Residence based estimates.
(Based on Scottish Government Urban Rural Classification, 2007-2008)
Table 26 shows that the median gross annual pay ( i.e. before taxation and other deductions) for full-time employees is highest in accessible rural areas and lowest in the rest of Scotland.
Income
Figure 18: Annual Net Income of Highest Income Householder and Partner by Geographic Area, 2007
Source: Scottish Household Survey, 2007
(Based on Scottish Government Urban Rural Classification, 2007-2008)
Figure 18 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).
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 27: Income and Employment Deprivation by Geographic Area, 2005
| 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 27 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 19: Employment by size of firm and geographic area, 2007
Source: Scottish Government, ONS ( IDBR), 2007
(Based on Scottish Government Urban Rural Classification, 2007-2008)
Figure 19 shows that micro and other small businesses account for over half of those employed in remote rural areas and 41% in accessible rural areas. Micro businesses (0-9 employees) are particularly significant in remote rural areas employing a third of all those employed in rural areas.
Large businesses account for 40% of those employed in the rest of Scotland but only 14% in remote rural areas.
Table 28: Recruitment of New Employees in the Past 12 Months by Geographic Area, 2006
| Remote
Rural | Accessible
Rural | Rest of
Scotland |
|---|
Yes | 44% | 35% | 49% |
|---|
No | 56% | 65% | 51% |
|---|
Source: Annual Small Business Survey, 2006
Note: The figures presented here are restricted to businesses with more than zero employees
(Based on Scottish Executive Urban Rural Classification, 2005-2006)
Table 28 suggests that a higher percentage of SMEs* in rest of Scotland recruited new employees in the past 12 months than businesses in the rural areas.
*Small and medium-sized enterprises (0-249 employees)
Table 29: Growth Patterns of Scottish Businesses by Geographic Area, 2006
| Remote
Rural | Accessible
Rural | Rest of
Scotland |
|---|
Downsized in the last 12 months | 9% | 11% | 16% |
|---|
Remained the same in the last 12 months | 73% | 72% | 65% |
|---|
Grown in the last 12 months | 17% | 17% | 18% |
|---|
Don't know | 1% | 0% | 1% |
|---|
Source: Annual Small Business Survey, 2006
Note: The figures presented here are restricted to businesses with more than zero employees
(Based on Scottish Executive Urban Rural Classification, 2005-2006)
Table 29 suggests that SMEs* are just as likely to experience new growth across Scotland. However, SMEs in rural areas are more likely to experience no growth than businesses in the rest of Scotland.
Table 30: Characteristics of businesses by Geographic Area, 2006
| Remote
Rural | Accessible
Rural | Rest of
Scotland |
|---|
Family-owned business | 86% | 84% | 70% |
|---|
Not a family-owned business | 14% | 17% | 30% |
|---|
Working from home (main premise when business first started up) |
|---|
Yes | 37% | 38% | 21% |
|---|
No | 62% | 57% | 76% |
|---|
Uncertain/not involved in start-up | 1% | 5% | 3% |
|---|
Source: Annual Small Business Survey, 2006
Note: The figures presented here are restricted to businesses with more than zero employees
(Based on Scottish Executive Urban Rural Classification, 2005-2006)
Table 30 shows that SMEs* are more likely to be family-owned in rural areas.
SMEs in rural areas are also more likely to have first started up using the home as the main premise.
* Small and medium-sized enterprises (0-249 employees)
Obstacles to Success of Business
Figure 20: Greatest Obstacle to Success of Business by Geographic Area, 2006
Source: Annual Small Business Survey, 2006
(Based on Scottish Executive Urban Rural Classification, 2005-2006)
Note: The figures presented here are restricted to businesses with more than zero employees
Figure 20 shows that in remote rural areas, the greatest obstacles to success of a SME business were perceived to be the economy and obtaining finance. In accessible rural areas, the greatest obstacles to success were perceived to be Regulations and Taxation, VAT, PAYE, National Insurance, business rates. In the rest of Scotland the greatest perceived obstacle was competition in the market.
Transport issues are a much greater obstacle in remote rural areas compared to accessible rural and the rest of Scotland. Keeping up with new technologies is perceived to be a much greater obstacle in accessible rural areas relative to remote rural and rest of Scotland. Competition in the market is viewed as a much greater obstacle relative to rural areas.
Note: The following were removed from the above chart for clarity:
| Remote
Rural | Accessible
Rural | Rest of
Scotland |
|---|
No obstacles | 4% | 2% | 4% |
|---|
No opinion | 3% | 3% | 2% |
|---|
Unwilling to answer | 0% | 1% | 0% |
|---|
Table 31: Difficulty in Obtaining Finance from First Source, 2006
| Remote
Rural | Accessible
Rural | Rest of
Scotland |
|---|
Yes, was unable to obtain any finance | 11% | 17% | 10% |
|---|
Yes, obtained some but not all | 6% | 3% | 4% |
|---|
Obtained all finance but with some problems | 19% | 3% | 6% |
|---|
No, had no difficulties in obtaining finance | 64% | 77% | 77% |
|---|
Don't know | 1% | 0% | 3% |
|---|
Source: Annual Small Business Survey, 2006
Note: The figures presented here are restricted to businesses with more than zero employees
(Based on Scottish Executive Urban Rural Classification, 2005-2006)
Table 31 shows that a higher percentage of SMEs in remote rural areas, relative to other areas, had difficulties in obtaining finance from the first source that they tried. However, accessible rural areas were more likely to be unable to obtain any finance from their first source.
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