We’re turning into a nation of entrepreneurs on the side
First published in the Sunday Times on 23rd August 2015.
Everybody, at some point in their life, should be an entrepreneur. I do mean each man, woman and child. Working for yourself is about much more than trying to make a lot of money; it is educational in many aspects and an experience we should all undertake — not just a minority of the population. Among other things, it offers independence, self-reliance and a sense of freedom, as well as the chance to experiment and be creative. It is a philosophy and culture as much as an economic decision. As Muhammad Yunus, Nobel laureate, said: “All human beings are born entrepreneurs. Some get a chance to unleash that capacity. Some never got the chance, never knew that he or she has that capacity.”
Trends in Britain are moving in that direction already. According to government statistics, there are now more than 4.6m self-employed people, or 15% of the workforce — an all-time high. Of course this figure understates the true number of micro-entrepreneurs. There are many hundreds of thousands more, probably millions, who are running what the news outlet Quartz calls a “side hustle”.
The hustle might be trading through eBay, letting your home via Airbnb, operating your own website, dealing in shares, catering for dinner parties or cleaning cars. Most of these “businesses” will be too small to be VAT registered, too small to file accounts, and probably too small to be limited companies anyway. Unquestionably, any such part-time, freelance enterprises should generally be exempt from the vast majority of taxes and regulations if they remain very small.
It is an infringement of liberty for the government to interfere in these activities, and simply not worth the authorities’ time. Of course, busybody officials hate to see such exclusions. I remember watching a TV documentary where a health-and-safety bureaucrat was unable to shut down a tiny garage because the business employed no one save the proprietor, so the rules didn’t apply. She was seething — she couldn’t stop someone adding economic value to the system.
I fear her attitude sums up the approach of many functionaries in local and central government. They fundamentally resent and despise the wealth generators, and too often they stifle productivity with arbitrary and unnecessary rules.
They should dabble a little in the private sector — as owners. It would give them insight into what it means to generate sales, meet a payroll, pay invoices, cover overheads — and provide the tax that ends up paying for the entire state sector (save for the vast sums we borrow to cover the deficit). Being in charge of your destiny as a proprietor brings a wholly different mindset to that which prevails in giant corporates or institutions like the NHS or civil service.
We will all need to work for longer to pay for our retirements — or at least the large majority of us who aren’t fortunate enough to have taxpayer-underwritten public sector pensions. That might mean extending a career with the same employer, but jobs for life have generally disappeared, so a more proactive, flexible attitude to earning a living makes sense. Learning how to fend for oneself without the comfort blanket of a paternal employer is a sound discipline that can enhance one’s sense of self- worth. This is one reason why start-ups founded by the over-55s are one of the fastest- growing segments. Running a business can be a lot more fun than retirement.
Many occupations are freelance anyway — barristers, plumbers and taxi drivers, for example. As giant companies such as banks shrink their payrolls, so more of us will work as contractors with specific skills that we hire out to customers.
And smaller companies need the flexibility of being able to call on freelance workers; they cannot afford the overhead of lots of full-time staff. The changing structure of the workplace and the digital revolution also mean that traditional working patterns do not apply. Many want time off for children, or sabbaticals to retrain.
Nowadays entrepreneurship is on the syllabus in schools, and universities across Britain buzz with more than 260 enterprise societies. The coming generations are almost certain to be more entrepreneurial than the present one. They will understand that owning a business teaches you about negotiation, administration, competition, cash flow and a myriad of other areas. The bosses have to start by doing everything if they can’t pay salaries — but the pride they will feel if the customer loves what they are doing will be so much more intense.
Of course, many will worry about the risks. Others may never seize their opportunities. But I believe it is entirely realistic to imagine that as many as a quarter of all working British adults will be working for themselves either part or full time within 10 years — and that this structural change is to be embraced. Our society will be more resourceful and less dependent, and better equipped to deal with the challenges of the 21st century.