Edinburgh’s status as a thriving entrepreneurial city has been shaken by new research revealing that its SMEs are the least confident in Scotland.
Among Scotland’s key population centres, 84% of SME owners in Edinburgh and the Lothians reported concerns about their survival over the year ahead, compared with 82% in Aberdeen and the North-east and 75% in Greater Glasgow and Clyde.
The survey of SMEs by Censuswide on behalf of legal firm Aberdein Considine revealed that optimism about their own sector in the year ahead has fallen sharply, from 83% last year to just 50% in 2026.
As the survey was conducted in January, before the Spring Statement and the Iran War it is likely that optimism has fallen further as the poll shows that concerns about business survival in 2025 have continued into 2026, with 81% of SMEs across Scotland saying their viability is at risk, only a slight increase on the 80% recorded last year.
Despite this decline in overall optimism, the 2026 survey points to a more favourable view of the Scottish Government than previously, with four in five SMEs saying the impact of the 2026 Scottish Budget – which was announced in January – will be positive for their business.
This marks a notable shift from 2025, when more than a third of businesses (37%) identified Scottish Government policy changes as their biggest barrier to growth.
While the majority of Scottish SMEs agreed that the Scottish and UK Governments prioritised their needs, at 66% and 65% respectively, this was not the sentiment expressed across the board, with one respondent from the retail sector claiming bureaucracy stands in the way of success, saying: “It’s soul-destroying watching lifelong passion bleed out from red tape.”
Ritchie Whyte, partner and head of the corporate and business advisory team at Aberdein Considine, said: “If we had to describe the current status of Scotland’s small and medium-sized enterprise (SME) community in just three words, it would be ‘embattled yet resilient’.
“Our 2026 survey has recorded a persistent level of concern over viability since mid-2025, with a startling four in five Scottish SMEs saying their business remains at risk coupled with a large drop in SME optimism across the country, which suggests that many SMEs still feel exposed to stubborn cost pressures and uncertainty.
“The regional findings of this year’s survey also paint an interesting picture: the Scottish capital emerges as the least confident among Scotland’s major cities for SME viability.”
Respondents across Scotland pointed to several obstacles to business confidence, with more than a third (35%) citing supply chain disruptions as their biggest financial challenge in the next 12 months (up from 23% the previous year).
Staff recruitment and retention costs were also noted as a significant cost pressure, with 33% identifying them as a major fiscal challenge, up from 19% in 2025.
The 2026 research also found that rising operating costs were chief among the barriers to business growth over the next 12 months, with more than one-fifth (22%) of respondents citing operational costs as their primary constraint.
This is followed by concerns around skills gaps and workforce challenges and competitive pressure from other businesses, both at 17%.
When asked what the Scottish Government could do to improve conditions for SMEs, a third of
respondents called for action to stimulate inward investment, followed by improving the availability of grant funding (31%), loosening restrictive regulations (19%) and cutting taxes or providing tax reliefs (17%).
However, 89% of respondents said the three-year 15% Retail, Hospitality and Leisure (RHL) rates relief, for retail businesses with a rateable value of up to £100,000, would have a positive effect for their business.
Exports grow
A new report from TheCityUK shows that financial and related professional services exports from Scotland grew by 16.3% to reach £12 billion in 2023, the latest year that data was available.
The report, ‘Exporting from across Britain: Financial and related professional services 2026’, also reveals that in that year almost half (49%) the industry’s exports originated outside London, with Scotland accounting for 6.9% of these exports and ranking as the second largest exporting region and nation outside London.
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