The John Lewis Economy is ‘Alive and Well’ in Scotland

Research published today (Wednesday 12 March 2014) has found that employee-owned firms in Scotland perform well in relation to conventionally structured businesses on a number of variables, including employment, sales and productivity.

The findings from the first ever major investigation of the growth within employee-owned businesses in Scotland were published this week by the respected Fraser of Allander Quarterly Economic Commentary.

The research was undertaken by a team of researchers from three Scottish universities: The University of St Andrews, Edinburgh Napier and Stirling.

In recent years there has been considerable growth in the number of employee-owned firms in Scotland. There are now around 45 employee-owned firms headquartered in Scotland which together employ around 2,500 workers. The vast majority of these firms are small and medium-sized enterprises (SMEs). Recent examples of firms becoming employee-owned include AquaScot, Clansmen Dynamics, Voice Technologies and Woollard & Henry.

The UK and Scottish governments have strongly backed the view that employee-owned businesses are an effective mode of corporate governance to achieve business growth. Indeed, members of the UK government have been frequently extolling the virtues of the so-called ’John Lewis economy’. Therefore, the study has important policy implications.

The study examined the growth performance of Scotland’s employee-owned firms and compared this with non-employee owned firms. The study marks the first time Scotland’s employee-owned firms have been examined in-depth by academic researchers.

Commenting on the findings the lead author of the paper Dr Ross Brown from the University of St Andrews claimed:

“The John Lewis economy is alive and well in Scotland. However, it appears that it is small dynamic SMEs who are most eagerly embracing the employee-ownership model in Scotland.”

Dr Brown further noted that contrary to the popular belief:

“Scots employees appear to be very successful capitalists and employee involvement seems a very good recipe for the success of these businesses.”

One of the study’s authors Professor Robert Raeside from Edinburgh Napier University said:

“The performance of Scottish employee owned businesses is generally superior to their counterparts on a number of different variables. In terms of their employment and sales growth employee owned firms do better than non-employee owned firms.”

Another of the reports co-authors, Professor Ronald McQuaid from the University of Stirling, said:

“These finding largely mirror other research undertaken elsewhere in the UK and abroad and further strengthens the evidence base concerning the growth performance of employee-owned firms.”

Professor McQuaid claimed the findings suggest that “support for fast growing employee-ownership firms is likely to lead to benefits throughout the Scottish business community.”

Notes to News Editors

The latest Fraser of Allander Quarterly Economic Commentary, supported by PwC, can be found here: http://www.strath.ac.uk/frasercommentary/

Scotland has around a third of the entire UK total number of employee-owned firms. However, the levels of employment in Scotland are less significant that the UK as a whole owing to the impact of large employee-owned firms such as John Lewis Partnership.

For further information contact Dr Ross Brown from the School of Management, University of St Andrews,  by email: [email protected] or phone: 07947 190175

Professor Ronald McQuaid, School of Management, University of Stirling, UK – email: [email protected]

Professor Robert Raeside, Employment Research Institute, Napier University, Edinburgh, UK – email: [email protected]

Contact:

Emma Shea, Senior Communications Manager, University of St Andrews on 01334 462 167, 07850 900 352 or email [email protected]