Useful work: the changing landscape of entrepreneurship

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“Here, you see, are two kinds of work – one good, the other bad; one not far removed from a blessing, a lightening of life; the other a mere curse, a burden to life. What is the difference between them, then? This: one has hope in it, the other has not. It is manly to do the one kind of work, and manly also to refuse to do the other.”

William Morris, Useful Work vs Useless Toil, 1884

 

Bill was right all along. The alienated useless toil necessitated by capitalism would eventually give way to more constructive, satisfying and useful work. It would take a great deal longer than he expected and involve far less chintz, but the landscape of work would – in the early twenty first century – begin to shift towards sustainable autonomous production involving considerable numbers of people. Perhaps not as part of the socialist utopia predicted by him, Marx and others – but more as a means by which people in advanced industrial economies could gain flexibility and satisfaction, while coping with the erosion of the welfare state.

There are some profound shifts taking place in the landscape of entrepreneurship in the UK which educators and policy makers need to catch up on. Despite record numbers of new business start ups in Scotland, political debate has yet to seriously address issues that concern entrepreneurs or indeed the wider cultural and economic questions of entrepreneurship. This is regrettable because the latest research is providing some rich insights into why people go into business, what meaning it provides for them, and how working and creative practices are being transformed.

A recent report on microenterprise provides some fascinating insights: the RSA/Populus survey Salvation in a start-up? The origins and nature of the self-employment boom, produced in partnership with Etsy and authored by Benedict Dellot. Below I will pull out some themes from this report, link them to other recent research and identify some implications.

A cultural shift

Since the onset of the recession in 2008 we now have 600,000 more micro enterprises (firms with less than 10 employees) in the UK. Today, one in seven of the workforce are working for themselves, and this trend is clearly climbing. Just over the last year we have seen a 9% growth in new business in Scotland, and over the last five years the business start up rate for Scotland has been one of the highest in the UK. According to Entrepreneurial Spark founder Jim Duffy “Coming out of a recession, a new industrial revolution is starting in Scotland. So many people, who didn’t think they were capable of turning their hand to entrepreneurship, are now doing it.”

That much is certainly true. But they are not doing it because of the recession. They seem to be doing it because they want to: it is (to coin a perhaps overused phrase) a lifestyle choice. The RSA survey suggests that only 27% of startups had anything to do with escaping unemployment, and self-employment had in any case been on a steady climb all through the years of the economic boom. This is supported by other recent research including a survey conducted by Ipsos MORI for the Resolution Foundation, confirming that 73% of those who became self-employed since the recession “did so wholly or partly due to their personal preference for this way of working, and not solely due to a lack of better work alternatives”. While the RSA report argues for evidence of structural social and economic change to account for this, I would suggest that there is a more deeper seated cultural shift that is behind the new ‘start up tribes’.

 The new tribes of enterprise

The report identifies six tribes of self-employment, each of which describes very diverse characteristics and motivations of entrepreneurship – shown in the figure below. Only 33% fall into categories that we associate with conventional business culture – driven by profit, a focussed sense of purpose and desire for growth. Virtually all business policy is predicated on the assumption that startups have the ambition to grow and take on employees. The reality – revealed by this research – is that most don’t. Indeed, very few self-employed people who have started up in the last 5 years have taken on employees. There has also been a notable rise in part-time self-employment, suggesting that this can co-exist with part-time paid employment and other activities. Nearly half the rise in self-employment since 2000 is accounted for by part-timers, or nano businesses, as the report refers to them.

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Poorer but happy

Many of those in the RSA survey see work as inherently enjoyable (in contrast to much of society) and 85% say “they are now more creative, autonomous and satisfied in their work” with key advantages being flexibility to deal with their own health and the welfare of family. In other words, autonomy, flexibility and happiness appear to be the qualities of self-employment that are most valued. On the downside, they are earning less money. As the report argues:

“Life for the self-employed presents a paradox: they appear to earn less, work harder and be more isolated, yet in the round are some of the happiest people. The reason seems to be because their work offers greater autonomy, a source of meaning and – perhaps surprisingly – a greater sense of security. All of which suggests that the draw of self-employment lies in what the Swiss economists Benz and Frey term ‘procedural utility’. In other words, people who work for themselves gain more from the way something is done rather than the final outcome of that activity – namely money.”

I would suggest that there is a genuine movement towards creating a culture of useful work and autonomous welfare. The two massive failures of the modern age are the alienation and inflexibilities created by work and the shortcomings of our welfare state, especially in terms of childcare and inadequate pensions. Much of the shift towards self-employment would appear to be driven by an impulse to create meaningful, flexible work rather than profit. This is not to deny the vital importance of the visionaries and the classicals to local and indeed national economic growth, but their needs and significance have to balanced by the very different needs (and contribution) of the remaining two thirds of the self-employed. I will briefly look at three issues below and pull in some additional evidence.

Self employment is about thinking.

The biggest increases in self-employment since 2008 have actually been in professional occupations. In a piece entitled How British workers are losing the power to think, Guardian correspondent Aditya Chakrabortty has drawn on research that strongly suggests an erosion of autonomy in many occupations. “Since the mid-80s, academics have been carrying out regular skills surveys, asking detailed questions of thousands of employees. In 1986… 72% of professionals felt they had a great deal of independence in doing their jobs. By 2006, that had plummeted to just 38%.” Some researchers are suggesting a future workforce in which only 10-15% will have permission to think. “The rest of us will merely carry out their decisions; what the academics call ‘digital Taylorism’, in which graduates will end up on the white-collar equivalent of a factory line.” This would suggest that self-employment is driven by a very basic human need: to use your brain creatively and fully.

Self-employment is family friendly.

The successive failures of UK and Scottish governments to provide adequate and affordable childcare – in contrast to many other European countries – is providing one major motivation for self-employment. One recent survey showed that 65% of mothers with children under ten years of age are considering starting a business from home in the next three years, and 49% “believe that they would be financially better off if they started a business from home”. The rise of the ‘mumpreneur’ (a contentious term), of whom there are estimated to be 300,000, is part of a shift in self-employment away from its historical tendency to be male dominated. Indeed, over the last two years the number of female entrepreneurs has increased by 9.6% in contrast to a 3.3% rise for men.

Make a job – don’t take a pension.

The self-employed are getting older. Those aged 55–64 has risen by 40% since 2000, while the over-65s in self-employment have increased by 140%. The over 55s are now a significant start up demographic and we could perhaps see this group as shifting towards self-employment as a means of dealing with the pensions crisis that is otherwise undermining security into old age. This view is supported by the Resolution Foundation in their separate survey and report:

“28 per cent of the overall growth in self-employment is due to a decline in the rate at which people leave self-employment. Our view is that this is partly explained by the UK’s expanding and ageing workforce. The raising of the retirement age, longer life expectancy and low levels of pension saving may have led to people remaining in employment for longer, and because self- employed people tend to be older than employees, this disproportionately affects this group. Self-employment might be growing as an alternative or complement to retirement, rather than as an alternative to being an employee.”

A policy vacuum

The evidence suggests that this diverse and varied landscape of enterprise is simply not recognised as such by the state, and those public bodies there to support the self-employed. At least that is the view of those surveyed in the RSA report who “still largely feel as though they are overlooked by the state”. More significantly “the vast majority believe the Conservatives have the best policies for their business”. Worryingly, there is also widespread support for a cap on immigration. The Conservatives certainly have more policies and a clear ideological commitment to enterprise and self-employment. The left and the labour movement appears held back by long-established animosity. While the RSA report points out that the most obvious bodies to help provide the collective benefits and support needed by the self-employed are the trade unions, this is unlikely to happen any time soon as the unions “have been one of the most vocal in disapproving of the rise in self-employment, with the Trades Union Congress recently expressing its concern that this type of work is inherently insecure”. 

So perhaps in an independent Scotland the self-employed could be the driving force of a new economy, autonomy and community focused wealth generation and support? Best not hold our breath. In all of its 604 pages, the weighty tome that is Scotland’s Future : Your Guide to an Independent Scotland contains only one reference to the self-employed.

What is clearly needed are conversations to help set a new agenda to support the forms of self-employment that are reshaping work, enterprise and welfare. These conversations should seek to focus around the question of how the UK’s micro enterprises can be taken seriously and influence policy makers. A critical objective should also be to create a vision of how a world centred on useful work could develop and thrive. 

 

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