Entrepreneurs are bad at government
Today business activist Tom Hunter wants to know why the Scottish Government doesn't turn to more people like him to advise on running the country. Across much of the media he seems genuinely confused about why he isn't being listened to more.
It is perhaps worth considering the answer to that in pursuit of the fresh thinking and ideas that Scotland is so greatly in need of. It helps to understand the very good reasons a government might not want to approach Mr Hunter in pursuit of good governance.
To begin, it is worth considering the track record of this practice of lending exaggerated weight to the views of this group of people. Mr Hunter claims that he can increase GDP in Scotland by £20 billion in five years. This is certainly big talk.
That represents a ten per cent real terms rise in Scottish GDP, or two per cent over and above inflation every year for the next three years. On the other hand, the current growth trend is predicted to be between one and one and a half per cent annually over the same period, so most of Hunter's claim could be achieved by him doing nothing.
It should therefore surely be read as two per cent above current growth predictions – which is hard to believe given the policy proposals. But then exaggerating returns is part of the entrepreneurial game.
Six years ago Forbes Magazine produced a list of the most promising 30 entrepreneurs under the age of 30. Since then, one in three of them have been jailed and between them they have raised £5.3 billion in funding but are responsible for £18.5 billion of fraud.
Or there are Elon Musk's self-certain claims that he would cut $2 trillion with his Department of Government Efficiency (DOGE). This at best has managed to 'cut' a tiny fraction of this sum – but mainly through cutting programmes not waste and the claims it has made about real cuts themselves have been greatly inflated to the point of fantasy.
Scotland has its own track record. Until recently Scotland's actually had a 'Chief Entrepreneur' in former SkyScanner boss Mark Logan. Appointed in 2022, his pay has been estimated at approximately £2,000 a day for the four and a half years he stuck it out before quitting. It is hard to argue that he 'transformed government', or made much noticeable difference at all.
And of course among the previous darlings of Scotland's government-sanctioned entrepreneurs is Michelle Mone, for a while the golden girl of the then Scottish Executive's entrepreneurial education programme, itself an initiative with negligible identifiable outcomes. Her trajectory since is not encouraging.
The track record of entrepreneurs in government is very far from impressive. Then again, the record of entrepreneurs in business isn't brilliant. As a reminder, one of Tom Hunter’s main businesses (the USC clothes retailer) went into administration in 2008 and it was only via an unjustifiable 'prepack' arrangement (where Hunter was allowed to cherry pick a few small profitable bits of the business and dump the rest and their creditors) that he had business interests in that sector at all.
It should also be reminded that three out of six of the biggest lending catastrophes that brought down the Bank of Scotland involved Tom Hunter, borrowing and then defaulting on loans worth about £2.2 billion. Business may be about risk, but in government you can't walk away from bankruptcy.
Finally, it is far from clear that Mr Hunter has a particularly innovative programme for government policy anyway. It calls for planning processes to be speeded up, 'red tape' to be cut and AI to be embraced. Which is to say it sounds like current UK Government policy, or the same broad policies (low regulation, total support for Silicon Valley) that governments in Britain have been following for 20 years now.
It is valuable to get diverse voices into government. The more ideas and the more approaches that can be considered the better. In the hands of wise politicians it can greatly improve governance. But the reason for getting those voices involved should be more persuasive than 'I really believe in myself a lot'.
In fact high-risk entrepreneurs whose business model is based on getting wealthy win or lose are a very bad fit for government which gets no such cosseted protection. If you mess around with the NHS and fail you can't just 'prepack' your way out of it.
This is all why Common Weal has created a model for governance in Scotland with a Civic Forum included, a gathering of expertise in a wide range of areas to help shape and promote thinking about Scotland's future. It is no based on who has the money to hire PR firms to place them in newspapers.