A new initiative to spark a “national conversation” about entrepreneurship and innovation in Scotland has been launched by the University of Strathclyde.

The Scottish Entrepreneurship and Innovation Observatory (EIO) is a collaboration between the Hunter Centre for Entrepreneurship, Strategy and Innovation and the Fraser of Allander Institute.

It will provide “robust research and analysis” to inform policy and practice, helping businesses and communities across Scotland to thrive.

Backed by high-quality data and expert insight, the Observatory aims to become a hub for ideas and collaboration, supporting inclusive growth and innovation.

Its work will be underpinned by a data bank and interactive dashboard, offering accessible information for policymakers, businesses and researchers.

Professor Niall MacKenzie, Head of the Hunter Centre, said: “The Observatory is about starting a conversation on how Scotland can strengthen its entrepreneurial ecosystem. By providing robust analysis, we can understand what works, what doesn’t, and how to turn research and ideas into real-world impact.”

The Observatory’s first “State of the Nation” report examines Scotland’s entrepreneurship and innovation landscape.

It highlights that start-up rates have stalled compared to other parts of the UK, while scaling businesses remain a challenge.

It also finds that solo entrepreneurship is on the rise, but larger firms – which drive jobs and growth – have seen little expansion.

The launch also includes two discussion papers. The first explores the correlation between deprivation and entrepreneurship, finding that areas with higher deprivation have significantly fewer business start-ups.

It also highlights the impact of mental health challenges and shows that university attendance is linked to higher start-up activity, suggesting education plays a key role in fostering entrepreneurship.

The second paper provides a high-level overview of Scotland’s angel investment market from 2018 to 2023. It reveals a mature market with more than £765 million invested in early-stage Scottish companies, but notes that the majority of investment is concentrated in Edinburgh.

Three sectors – Information and Communication, Professional, Scientific and Technical Activities, and Manufacturing – attracted more than 85% of total investment.

Professor Mairi Spowage, Director of the Fraser of Allander Institute, said:“ Our analysis shows that entrepreneurship in Scotland is shaped by complex factors.

“Our State of the Nation Report provides a clear picture of where we stand today: start-up rates have stalled compared to other parts of the UK, and scaling businesses remain a challenge. In addition, areas with higher deprivation face also real barriers to starting businesses, and mental health challenges can make this even harder.

“At the same time, solo entrepreneurship is growing, and Scotland’s universities continue to lead in research and development. We’re also seeing encouraging signs in the angel investment market, with over £765 million invested in early-stage Scottish companies in recent years.

“The challenge – and opportunity – is to ensure that this investment reaches more parts of Scotland and helps create inclusive growth across all communities.”

The Observatory, launched to mark the Hunter Centre’s and Fraser of Allander’s 25th and 50th anniversaries respectively, will publish annual reports and host a dedicated website featuring data, blogs and discussion papers.