ISSUES
: Business and Trade
Chapter 1: Business today
22
Revealed: how we’re rebranding poor
people as entrepreneurs
An article from
The Conversation
.
By Laura Galloway, Professor of Business
and Enterprise, Heriot-Watt University
T
he last several decades have
seen a steady increase in
the profile and celebration
of entrepreneurship in the UK.
It is associated with economic
development, growth and making
a positive contribution to the
country. There is plenty of evidence
to support this – for example
the immensely valuable Global
Entrepreneurship Monitor research
project, which compares rates
and types of entrepreneurship
throughout the world. As a
consequence, developing and
investing in entrepreneurship has
never been more prioritised, as
evidenced by the UK Government’s
recent Enterprise Bill, with its raft of
measures to support entrepreneurs.
Yet there is another side to this
growing army of entrepreneurs. Far
from the Levi Roots and Michelle
Mones of the world, many others
appear to fall into the category
because it is the only one available
to them. They are not planning how
to invest their next million or hiring
teams of new employees to deliver
their vision. They are living in poverty
and desperation, with little prospect
for the future. Worse, policymakers
and enterprise specialists seem
barely to have noticed.
What
do
we
mean
by
entrepreneurship
anyway?
Governments and the media use
it most often to describe those
who are employed independently
– whether sole traders or people
who employ others. The term
‘entrepreneur’ evokes ideas of
innovation and opportunity, which
are then transferred to these
people. Unfortunately the reality is
not quite so affirmative.
Behind the statistics
According to latest statistics, the
business creation rate has risen by
55% since 2000. Yet the proportion
of enterprises that have employees
has actually fallen from a third to
a quarter, while the proportion
of those with no employees has
risen. This means that a lot of the
entrepreneurship ‘success’ that we
hear about is actually represented
by a 73% rise in the number of
people who have become self-
employed.
Now, being self-employed has many
advantages – most compellingly,
individuals create their own job.
There is a net economic benefit to
that, and potentially social benefits
too, like flexibility. Yet within this,
there is a group that has been
largely neglected: those for whom
self-employment is in fact negative,
undermines their quality of life, and
is even exploitative.
For at least the last decade,
there has been speculation in
the employment literature that
organisations are increasingly
changing their employment model
from employee-based to relying on
self-employed contractors. We see
it in the IT sector and in new media,
for example. It means that many
people previously in employment
are now self-employed, meaning
they do broadly the same job but
without employment rights, unions,
and in some cases at lower pay.
This has been happening in some
sectors for decades (construction,
for example), yet academics have
not really explored the phenomenon.
In a similar vein, the New Enterprise
Allowance – a UK welfare benefit
that provides income to support
‘business’ creation – has been
introduced to incentivise long-
term unemployed people into self-
employment. Again, the extent
to which this has had the desired
positive effect has not been
explored.
Reality bites
I have been involved in a study
of self-employment in relation to
contractors and those needing an
alternative to unemployment. We
interviewed key people in Scotland
working in business support,
poverty alleviation and social
support. We also collected the
stories of a small sample of people
who are self-employed and in these
unexplored categories.
We found there is clearly a group
of ‘entrepreneurs’ who are living
in poverty (as defined by UK
government measures). We have no
idea how representative our group
is among the self-employed, but
our research suggested it may be
prevalent and further investigation
is certainly required.
Turning workforces into contractors
is an issue, as we expected, but
self-employment as an alternative
to unemployment was even more
concerning. In many cases, people
were counted as self-employed
after their welfare benefits had
been removed or where “regular”
employment was inappropriate
or unavailable. These individuals
were essentially forced into self-
employment.
9 March 2016
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The above information is
reprinted with kind permission
from
The
Conversation
. Please
visit
for further information.
© 2010–2016,
The Conversation Trust (UK)
