First published in the Financial Times on 13th March 2012.
Many who prefer self-employment don’t plan to build a big business
Can everyone be an entrepreneur? At first glance the idea seems preposterous. More people than ever are employed in giant multinationals – apparently preferring the safety of working for someone else to the risks of going it alone.
Yet in the “Work IQ” survey carried out by Intelligent Office, an outsourcing consultancy, 65 per cent of 1,000 respondents claimed they wanted to be an entrepreneur: not one clamoured to be a corporate executive.
In Britain there are now 4.5m companies – almost more than there are employees of the state. Politicians and the media obsess about the unions and public services, but possibly in the years to come – if one includes part-time business owners – there will be more entrepreneurs than public servants. These shifts suggest more attention should be paid to the job creators, rather than focusing on the same old politicians and talking heads.
In a way, we need a new word instead of “entrepreneur”. Many consider it an over-ambitious term, denoting someone running a dynamic company with lots of staff. In fact, many who prefer self-employment don’t plan to build a big business. Instead they simply want the freedom, flexibility and independence of controlling their own destiny, deciding the hours they work and taking the credit for their own efforts.
Technology has transformed the opportunities for microbusiness. Thanks to mobile communications and tablet computers, operating an enterprise part-time wherever you are is a much more realistic option than ever before.
Decades ago I conducted a number of ventures during weekends, evenings and holidays while I worked in a bank. I only became a full-time entrepreneur when my employers insisted all staff resign their outside directorships. I chose liberty rather than a comfy but constrained existence.
In emerging markets a much higher proportion of citizens work for themselves. This may not be through choice – formal jobs have historically not been as plentiful in new industrialising economies. However, as Muhammad Yunus, the Nobel Prize-winning founder of Grameen Bank put it: “Everyone is an entrepreneur, but only the lucky ones know it.”
Each fresh member of the entrepreneurial economy acquires a better understanding of the capitalist system – no matter how modest their commercial undertaking. They learn about taking ultimate responsibility for customers, finance, selling – everything really. There is absolutely nowhere to hide when it’s your own business.
It is imperative that society should put as few barriers as possible in their way – taxation or regulatory. Allowing everyone to trade freely with each other expands the overall cake, and encourages invention and self-reliance.
Every entrepreneur who hires a single member of staff has in fact created two jobs: their new employee’s and their own. That means two individuals are off the dole and paying tax. This contribution to the welfare of every nation cannot be overstated. Countries with high unemployment need many such winners to replace the relentless downsizing across so many traditional industries.
Productivity gains from technology advances mean even China has been eliminating manufacturing jobs in recent times. This is a far bigger factor in reshaping the workforce than outsourcing labour to low-cost producers. And there is ever more reliance in the west on smaller service providers for new work – essentially all of them led by entrepreneurs.
There is much talk of a new industrial policy. My suggestion is that rather than pick sectors, ministers just promote entrepreneurship. A culture where running your own business is seen as an admirable and impressive achievement is likely to be more dynamic and successful than one where general opinion judges trade to be mercenary, dull and philistine.
More widespread participation brings a greater appreciation of the non-financial rewards and challenges of being a business proprietor.