The Ecosystem Fund

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A Scottish Government grant programme that funds intermediary organisations, networks, and community groups to build the infrastructure and social fabric of Scotland's entrepreneurial ecosystem.
What are the main aims and objectives?

The Ecosystem Fund aims to strengthen Scotland's entrepreneurial ecosystem by funding the organisations, networks, and community groups that support entrepreneurs — rather than funding individual startups directly. It was created in response to a diagnostic finding from the 2020 Scottish Technology Ecosystem Review (STER), which concluded that Scotland possessed many of the ingredients for a world-class startup ecosystem but lacked the critical mass of interconnected support infrastructure needed to tip it into self-sustaining growth. The fund targets specific barriers to entrepreneurship: limited access to finance, skills gaps among early-stage founders, geographic concentration of support in major cities, underrepresentation of women, ethnic minorities, and young people in entrepreneurship, and the absence of structured community-level mentorship and peer networking outside established institutions. Its overarching political ambition, stated by Deputy First Minister Kate Forbes, is for Scotland to become "one of Europe's leading start-up economies". 

How does the program work?

The Ecosystem Fund operates through a competitive open-call grant process, managed by Inspirent Ltd on behalf of the Scottish Government.

Eligibility. Applications are open to a wide range of organisations, including established ecosystem builders, informal networks, community groups, and intermediary bodies. Crucially, applicants must demonstrate that their proposed activity delivers ecosystem-wide benefit — not activities that primarily serve the applying organisation itself. Proposals must also fill a genuine gap in the existing support landscape rather than duplicate what other bodies already provide.

Grant tiers. The fund currently offers two tiers of support:

  • Tier 1: Grants of up to £9,999 (approximately $12,600 USD), with a streamlined application process designed specifically to lower the barrier for smaller or informal organisations
  • Tier 2: Grants of £10,000 to £40,000 (approximately $12,600 to $50,500 USD), with larger amounts available for projects demonstrating exceptional potential impact

Assessment criteria. Applications are scored against five weighted criteria: Impact Potential (35%), Value for Money (25%), Delivery Capability (20%), Future Sustainability (10%), and Innovation (10%). This weighting deliberately prioritises demonstrable public benefit over organisational track record, enabling newer or grassroots organisations to compete with established bodies.

Milestone-based disbursement. Funding is paid in tranches tied to verified milestone completion. Grantees must submit evidence of delivery before each payment is released, providing a financial accountability mechanism appropriate for small grants at this scale.​

Application process. Applications are submitted digitally through the Ecosystem Fund's dedicated website. The streamlined Tier 1 process was introduced specifically in response to feedback that bureaucratic application demands were excluding informal community-led organisations from earlier rounds.

Companion Pathways Fund. Alongside the main Ecosystem Fund, the Ecosystem Pathways Fund operates with a specific focus on projects that widen access to entrepreneurship for underrepresented groups. It offers grants of up to £150,000 (approximately $189,000 USD) and follows a broadly similar application and assessment process (Ecosystem Pathways Fund guidance).

Activities funded under both programmes have included large-scale entrepreneurship events (such as Turing Fest and Scottish Games Week), international growth support cohorts, school-based entrepreneurship inspiration programmes, mentorship networks, and investor readiness workshops.

What is the overall cost?

The annual allocation specifically for the Ecosystem Fund in 2025/26 was £800,000 (approximately $1 million USD), distributed across 28 funded projects (Scottish Government press release, June 2025). Individual grant amounts across earlier rounds ranged from approximately £5,000 to £50,000 per project (approximately $6,300 to $63,000 USD).

How was it implemented?

The Ecosystem Fund was created as a direct response to the Scottish Technology Ecosystem Review (STER), commissioned in May 2020 by Cabinet Minister Kate Forbes and conducted by Mark Logan — entrepreneur and former Chief Operating Officer of Skyscanner, one of Scotland's most prominent tech scale-ups. Logan's review, published in August 2020, found that Scotland was at a "pre-tipping point" — possessing the raw ingredients of a strong tech ecosystem but lacking the critical density of interconnected support organisations needed to generate self-sustaining startup growth.

Among Logan's recommendations was an "Ecosystem Builders Fund" — grant support for organisations that strengthen the ecosystem through peer networking, informal education, and community building. The Scottish Government accepted this recommendation and launched Phase 1 of the Ecosystem Fund on 21 October 2021.​

Between Phase 1 and Phase 2, the programme's scope was deliberately broadened. The Scottish Government incorporated recommendations from Ana Stewart's Pathways Report on women in entrepreneurship, the National Strategy for Economic Transformation (NSET), the government's Innovation Strategy, and the Entrepreneurial Campus Report. This expanded the fund from a primarily technology-focused grant programme into a broader, more inclusive ecosystem-building instrument.​

Since Phase 2 (2023 onwards), delivery has been managed by Inspirent Ltd as the contracted programme administrator. Prior to this, Scottish Enterprise — Scotland's national economic development agency — administered the fund.

Key milestones:

  • May 2020: STER commissioned by Kate Forbes; Mark Logan appointed as reviewer​
  • August 2020: STER published, recommending an Ecosystem Builders Fund
  • October 2021: Phase 1 of the Ecosystem Fund launched​
  • November 2022: Scottish Government publishes "Towards the Tipping Point", a progress update on STER implementation​
  • 2023: Phase 2 launched with expanded scope; Inspirent Ltd appointed as delivery partner
  • June 2025: 2025/26 round announced; £800,000 awarded across 28 projects
What impact has been measured?

Impact data for the Ecosystem Fund is largely self-reported by the Scottish Government and its delivery partners. No independent evaluation has been published to date.​

What lessons can be learned?
  • Funding confirmations have arrived too late in the financial year for effective delivery. Freedom of Information evidence shows that in both 2021 and 2023, ministerial approval of funding was not confirmed until mid-year — meaning grantees were informed they had been successful only halfway through the financial year they were supposed to deliver in. This severely compressed planning and delivery timelines for recipient organisations (Scottish Government FOI release, January 2024).​
  • £800,000 split across 28 projects produces an average grant of approximately £28,571 per organisation. For organisations tasked with driving systemic ecosystem transformation, this is a modest sum. The gap between the ambition — making Scotland "one of Europe's leading start-up economies" — and the annual fund allocation has not been publicly addressed by the Scottish Government.
  • No independent outcome evaluation has been published despite multiple funding rounds since 2021. The programme has now run for over four years across multiple phases, yet no publicly accessible evaluation measuring long-term outcomes — startups formed, investment raised, jobs created — attributable to funded activities has been released. This makes it impossible for policymakers elsewhere to assess what the programme has actually achieved.​
  • The Pathways Fund explicitly cannot commit to future rounds. The companion Pathways Fund's own guidance states it cannot guarantee future iterations beyond the current year — a signal of funding insecurity that may discourage organisations from developing multi-year programmes or building staff capacity around it (Ecosystem Pathways Fund FAQs).​
  • Demonstrating genuine additionality is structurally difficult. The fund requires applicants to prove their proposed activity fills a gap not covered by Scottish Enterprise, Highlands and Islands Enterprise (HIE), South of Scotland Enterprise (SOSE), or other bodies. In a landscape with multiple overlapping agencies, establishing genuine non-duplication requires significant due diligence that small community organisations may not have the capacity to provide.
  • The programme's origins in political patronage creates a dependency risk. The Ecosystem Fund was created directly from a review commissioned by Kate Forbes and built around Logan's recommendations. Its expansion and continued funding are tied to the political priorities of individual ministers rather than an institutionalised, multi-party mandate — making it vulnerable to shifts in government priorities or personnel.

CURATED BY

Tom Hancock

Research Associate
Global Entrepreneurship Network
United Kingdom