Employee Ownership as local economic resilience: Evidence from Scotland

This paper examines employee ownership (EO) as a form of collective entrepreneurial succession within regional entrepreneurial ecosystems. Drawing on qualitative case evidence from Scotland, the study explores how EO transitions are motivated, enacted, and experienced as alternatives to trade sale, private equity acquisition, or firm closure in regions. The findings show that EO is frequently chosen by founders of locally embedded small and medium-sized enterprises to preserve organizational culture, retain skilled employment, and maintain local decision-making. Rather than marking an endpoint of entrepreneurship, EO redistributes entrepreneurial agency among employees, requiring them to assume governance and strategic responsibilities previously held by founders and owner-managers. The analysis further demonstrates that EO can support local value retention and resilience, while remaining contingent on governance capability, and institutional support. Conceptually, the paper reframes EO as an entrepreneurial transition mechanism that sustains locally embedded economic activity within regional development systems.