In this comment piece, Peter White, YTKO Founder and Chairman, discusses why mainstream enterprise creation now needs greater public support, as it provides greater employment for our national and local economies.
The Office for National Statistics recently reported that 15% of the UK’s total workforce is now self-employed. Predictably, as in previous quarters when such data has been published, there was an outcry about forcing people – who some thought should really have been finding traditional employment – into self-employment, regarding it as a low paid, dead end way of working.
Untrue. Reading on, those same stats show that many of these new self-built enterprises are created by skilled people, carrying out technical, professional and managerial roles.
But the most interesting fact to us here at YTKO (deliverers of the award-winning enterprise creation and support service, Outset) was the change in churn. In the recent past, around 37% of unemployed started a business of some sort. After a few years, almost exactly that number then reverted back to mainstream employment. So self-employment remained reasonably steady, at about one in eight of the workforce.
But now, that churn rate has dropped – by 40% – from the high of 37% down to 23%.
The self-employed like being their own boss. They like the freedom, the challenge and the rewards, and less than a quarter decide to take up or return to traditional jobs in the future. Is this because there are fewer traditional jobs available? Not according to the ONS data.
Is this because we now have an enterprise culture that welcomes, supports and nurtures the entrepreneur? Maybe. Business support services concentrate on SME growth and not start-ups, and similarly the banks are not lending to mainstream enterprises that are the backbone of Britain’s economy.
Economic inclusion is one of the biggest challenges for local planners: how to move long-term workless or low- or no-skilled workers into good, sustainable and gainful employment.
Our Outset experience – over 3,500 jobs created to date, with three out of four of them previously unemployed – suggests that self employment is the very best and most affordable and scalable solution.
These start-ups may not be as sexy as high tech, but there are lots and lots of them and they cost a fraction of the £26,000 a job that high tech typically demands. Self-employment also has the potential to support social inclusion goals, another area where many LEPs seem to be uncertain of what works and what they should commission.
With self-employment, it’s not ‘job done’ by any means. The signs are better than ever, but this momentum needs to be supported, locally and nationally. There’s everything to gain.
If you liked this article, then you might be interested in joining us at the Institute of Economic Development’s Annual Conference on Wednesday, 19th November 2014 to exchange and discuss strategies and ideas related to social and economic development. As a proud sponsor, we offer all friends of YTKO Group 10% off registration when you quote “YTKO10”.
For more information or to book your tickets, click here.