Self-employment Is The New Normal - So They Better Get Used To It

Self-employment Is The New Normal - So They Better Get Used To It

Posted: Mon 2nd Jun 2014

A report which sought to dispel the myth that growing self-employment is simply a by-product of an economic downturn that will soon go away, made an excellent argument this week. But frustratingly, it didn't manage to convince many of the nay-sayers in the audience.

The report's author Benedict Dellot, from the Royal Society for the encouragement of Arts, Manufacturing and Commerce (RSA ) anticipated this, I assume by giving the report a questioning standpoint - Salvation in a Start-up? The Origins and Nature of the Self-Employment Boom.

And while the main planks of the report were outwardly accepted, the overriding argument from those that saw self-employment as a threatening societal negative was that there are people who don't want to be self-employed, and have no financial choice or voice. What they didn't mention was that this is also very often the case for those struggling with low-paid, unpredictable and insecure employment.

They also expressed dismay that the average weekly remittance of the self-employed is around £74 less than that of their employed counterparts, implying the self-employed are therefore somehow downtrodden and poor.

These arguments suggest this reluctant army of self-employed workers are victims of the economic downturn and will jump straight back into a job given half a chance.

Hang on. These are very outdated arguments. And here's why according to the report:

The RSA and Etsy's survey, carried out by Populus found less than one in five people said they were self-employed because they couldn't get a job. The Labour Force Survey suggests the biggest increase in the self-employed is among the professional occupations - one of the highest-skilled labour forces - not low-paid odd-jobbers.

This is a trend that has been growing since 2000 - that's 14 years. It's not something that came about as a result of the financial crisis in 2008, as many think.

It also pointed to the fact that the self-employed, are on the whole, happier than those on their expensive early morning trains or in their expensive petrol-guzzling cars on their way into work, or dropping off a child at an expensive nursery.

The report looked to discover what was then, behind this trend, if it wasn't in fact all about the recession. It found five good reasons:

  • New technology - we can now logon at 7am in our pyjamas and get through a day's emails in an hour - with a reassuring hot cup of tea rather than scramble into our work suits.

  • Organisations are changing - middle level opportunities are being stripped out of organisations making it harder to find well-paid mid-range work that's satisfying enough.

  • New mindsets - in post-war Britain, having a proper job was be-all and end-all. Nowadays running a business means you are seen as being a pioneer, a risk-taker and an optimist. The Global Entrepreneurship Monitor (GEM) stated that entrepreneurs now have the highest regard than  ever before from society.

  • New markets - as a nation, we're not so involved in heavy manufacturing anymore. In fact, we're more likely to work in a call centre. Small firms ca n compete in the service sector much more easily. They don't need the massive investment and their great ideas can bring in the contracts.

  • New population - our population is changing. There are increasingly more over 65s - the number of people working past employment age has doubled according to the Labour Force Survey. There's also a baby boom. A lot of these new parents will be looking to earn through self-employment as they face soul-destroying nursery fees. An increase in immigration also has led to more entrepreneurial activity.

We need to get used to the fact that we've changed since we last looked - and very likely, we'll never be the same again. And yet we are seeing the negative view of self-employment trotted out more and more regularly as we move towards a general election.Why, when the reality is staring us in the face? And FYI - I'd say this group might be proportionally more motivated to vote, so listen up!

Yes, in previous recessions, the number of self-employed went up and then returned to normal. That's not happening here. What you are seeing is the new normal. Get used to it.

Liz SleeLiz Slee (@lizziepin) is Head of Media for Enterprise Nation

Click here to download the report in PDF.

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