RSA lifts the lid on the self-employment boom

Posted on Feb 6th, 2015 | News and opinion

Britain’s vanguard of entrepreneurs are hungry for autonomy, flexibility and the freedom to own their failures and successes. The culture of entrepreneurialism is contagious, yet no one can quite agree on why it started, how long it will last or the impact it’ll have on the British economy.

Solving the self-employment puzzle was a key theme at the Royal Society of Art’s (RSA) Self-employment Summit. The self-employed are emblematic of a modern way of life, said Adam Lent, director of research at the RSA. They don’t fit into traditional political paradigms – they reject the corporate hierarchy of the right and shun the standard structures of employment favoured by the left.

The rise in self-employment has ignited a punk sensibility, added Tom Hodgkinson, editor of The Idler and panellist at the event. People have “revolted against the idea of wage slavery” and the RSA’s own research has shown many are going it alone in pursuit of passion, not, as has been a common misconception, out of necessity.

Emma Jones, founder of Enterprise Nation, added:

Startups are a brilliant thing for the UK…People who run their own business from home are happier, healthier and wealthier”.

This group of self starters are reported to invest an extra £40 billion into their local economies each year and, Emma noted, a lot of the turnover from self-employment is not being counted in official figures, which means policy makers don’t have an accurate picture of the self-employment boom.

So is this the start of a career utopia?

Steven Toft, Flip Chart Fairy Tales blogger, doesn’t think so. He brought attention to HMRC data, which shows a drop of £8 billion in self-employment earnings between 2008 and 2012, while the number of those working for themselves increased in that period by 600,000. He said:

“More and more animals come to drink from an ever-shrinking oasis.”

“Utopia is a reality for a small number of people,” said Geoff Mulgan, chief executive of Nesta. He advised waiting until you’ve had more life and career experience before going it alone.

Although some do become millionaires by 23, this is very much the minority. A lot of the success of the self-employed comes down to the power of distribution. For example, many are trying to make money from selling apps, but only a small number are making anything like the minimum wage. Furthermore, nowhere is the gender pay gap more obvious than in part time workers and the self-employed.

Vicky Pryce from the Centre for Economic and Business Research, and a panelist during the ‘searching for a new kind of capitalism’ session, highlighted the difficulties many women experience when trying to find their niche in the market. Yet many are tempted by the idea of being their own boss due to rising childcare costs and the difficulties of having a family alongside a traditional 9-5.

Part of self-employment, at least initially, means taking a DIY approach to business – doing your own taxes, being your own secretary, staking out your place in the market. Will Hutton, chair of the Big Innovation Centre, argued this actually goes against the ideal economy, where division of labour ensures jobs for all, and certainly goes against left wing ideology. He said:

“I think self-employment, like the vote in Scotland, like actually the loss of the war in Helmand, like actually the collapse in the banking system, is part of a picture of a capitalism that is seriously dysfunctional….This kind of gay story that [self-employment’s] part of a new Utopia idea and tribute to an entrepreneurial business culture misses the point completely.”

As with anything related to huge cultural shifts, the issue of self-employment reaches many different, often contradictory, conclusions, the RSA Startup Summit was a fantastic example of this. Nonetheless, the rise in self-employment remains one of the most unprecedented socio-economic trends of the past century and is providing some of Britain’s best thinkers their brain fodder.

But as Geoff Mulgan warned:

“Be careful to never generalise in the discussion on self-employment.”

Image by Brian Barnett

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Written by Sophie Turton

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