It wasn’t the most scientific of polls but it was revealing nonetheless. After droning on about the virtues of my current employer to a visiting group of about forty sixth-formers from a local school, I asked for a show of hands on where they saw themselves in ten years. Expecting a solid vote of confidence in my own career choice, I was a little taken aback to hear that the most popular option was “run my own business”.
Their responses were more than a reflection of millennial dreaming. One of the most unexpected developments of the recent labour market revival has been the extent to which it has been driven by self-employment. According to the Office for National Statistics, new business owners have accounted for 35% of the nearly 2m rise in employment since the official end of the recession in the middle of 2009.
At first glance there seems to be a straightforward link between the downturn and this jump which has taken the self-employed to 4.5m, equating to 15% of the workforce. But while difficulties in finding a traditional job may have pushed some into setting up their own businesses, many others have made the step for wholly positive reasons including the prospects of greater autonomy, satisfaction, work-life balance, and a greater return on their labour.
Indeed, movements into self-employment are largely uncorrelated with the economic cycle. The recent rise has been part of a broader upturn over the last fifteen years.
So what explains this shift? Some evidence suggests that the aforementioned positive factors, particularly the promise of greater work flexibility, are important. But the sixth-formers cited evidence which suggests that basic economic forces are also at play. In their view, technological advances have made it easier and cheaper to start and run a business than their parents could ever have dreamed. Meanwhile greater global competition has encouraged existing firms to outsource many specialist tasks that were previously carried out in-house. The students were also very aware of tax-breaks and funding options, such as the New Enterprise Allowance and Enterprise Guarantee Scheme, and support from groups such like the National Enterprise Network who provide advice and mentoring support to help turn initial ideas into viable deliverables.
Probably sensing my increasing interest, excitement, and possibly a reflection of my true self, one bright spark cut to the chase and suggested that I simply check out www.gov.uk/starting-up-a-business. I am eternally grateful to her.