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Squeezed Britons try their hand at microbusiness to top up incomes

Squeezed Britons try their hand at microbusiness to top up incomes | Self-employment LM shift | Scoop.it
Rise in number of people starting new businesses but experts question to what extent startup numbers are measure of economic success
Erika Watson's insight:

Key points:

massive rise in self-employment, replaces most of the jobs lost in the recession.

Suggestion they don't pay as well  (on average true - see other stats)

It's very easy to start a biz in UK, but not to survive. Four in 10 businesses in the UK fail after year three, according to the British Library's Business and IP Centre, which aims to help startups survive. The net rate of business creation in the UK is less than half the European average, according to the auditors RSM.

Over the past five years, the UK has seen a net gain of just 63,000 businesses, an annual compound growth rate of just 0.7%. By contrast, the 12 European countries surveyed posted an average annual compound growth rate of 1.4%. In the fast growing economies of Brazil, Russia, India, China and South Africa – known collectively as the BRICS – the rate is 5.8%.

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A mini-review of self-employment in the UK | Cobweb Information

A mini-review of self-employment in the UK | Cobweb Information | Self-employment LM shift | Scoop.it
Last month the Government announced that it was to carry out a review of self-employment which will look into why people opt for self-employment.
Erika Watson's insight:

Good overview of the latest stats. The increase in self-employment has peaked, but not for women. Self-employed Incomes continue to decline. Alongside gender shift and income slide there is a gradual shift from low skill to higher skill self-employment.  No doubt linked to gendered nature of public sector redundancies.

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“Flexible Security”: A Sensible Social Policy for our Digital Age | Annenberg Innovation Lab

Blog: As we transition to a digital economy, how can policies offer flexibility & security for workers? http://t.co/FnCCgukqk4 #flexicurity
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New group of Labour MPs prioritise self-employment - Brookson (press release) (blog)

New group of Labour MPs prioritise self-employment
Brookson (press release) (blog)
Ms Mahmood said that Labour's view on self-employment was “out-of-date”, and needed to change to support job and wealth creation.
Erika Watson's insight:

new group called 'Red Shift' want greater focus on self employed and mumpreneurs. 

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Self-employed workers are the future. We need a fair deal for them

Self-employed workers are the future. We need a fair deal for them | Self-employment LM shift | Scoop.it
A new review bodes well, but government needs to tackle late payments, pensions arrangements, maternity pay and procurement contract bids With more than one in seven workers now self-employed in the UK, it is no wonder policymakers are finally...
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Silver entrepreneurs behind Britain's self-employment boom, says Bank of England

Silver entrepreneurs behind Britain's self-employment boom, says Bank of England | Self-employment LM shift | Scoop.it

Britons working for longer and a rise in women in the workplace has fuelled a self-employHead of Policy Operations and Policy Voicement boom, rather than a weak economy, Bank of England analysis shows

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Self-employment: not just for the downturn

Self-employment: not just for the downturn | Self-employment LM shift | Scoop.it
Today’s ONS figures show the self-employed account for just under 15% of total employment, the highest it has been in two decades. The numbers in self-employment have grown by over 7% in year, compared to growth of just 1.6% in the number of employees. SMF Chief Economist Nida Broughton asks whether this a good thing or not?
Erika Watson's insight:

SUmmary:  This is a structural trend.

Implications for policy:

First,we must not assume is that the rise in self-employment is evidence of some new entrepreneurial revolution that will power future economic growth. Most self-employed individuals will not go off and set up high growth companies. 

Second, we need to take better account of the self-employed in wider policy decisions relating to social policy and labour markets. Many policies designed to work through employers do not touch the growing number of self-employed. eg. minimum wage, pensions auto-enrolment.  

We are in danger of creating a two-track labour market, with highly protected employees on one track, and a growing number of self-employed with much less support on the other.

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On their own

On their own | Self-employment LM shift | Scoop.it

PERHAPS the future belongs to the self-employed. Steady jobs, after all, are hard to find. The idea that a young graduate should expect to work for 40 years with the...

Erika Watson's insight:

Structural shift to increased self-employment on both sides of the Atlantic...

Excerpt: But perhaps the structural trend means those paid jobs will not become available. If so, the economy may have created a vast reserve labour force, akin to the “spinsters” of early 19th-century Britain—single women who were paid piece rates for spinning textiles at home—or the dockers who used to mass outside port gates in the hope of being selected for a day’s work. That would suggest an economy where wages are permanently kept under pressure and where profit margins remain high. Good news for the stockmarket perhaps, but not so good for the self-employed.

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Tony Brugman (Bright & Company)'s curator insight, June 24, 2014 3:57 PM

Good story in The Economist on the rise of self-employment in USA and UK!

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The Era of Declining Self-Employment

The Era of Declining Self-Employment | Self-employment LM shift | Scoop.it
The number of employed Americans rose from 144,144,000 in October 2013 to 144,775,000 in November 2013, an increase of 631,000, according to Federal government data. That’s good news.
Erika Watson's insight:

Self-employment trends are different in the US,. 

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Self-employment all-time high is proof of structural change, says PCG - Link2Portal

Self-employment all-time high is proof of structural change, says PCG - Link2Portal | Self-employment LM shift | Scoop.it
Self-employment all-time high is proof of structural change, says PCG Link2Portal PCG, the membership organisation for independent professionals, has responded to the ONS labour statistics released today which show a sharp rise in those choosing...
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What would Robin Hood do: How cash handouts are remaking lives in Brazil - The Globe and Mail

What would Robin Hood do: How cash handouts are remaking lives in Brazil - The Globe and Mail | Self-employment LM shift | Scoop.it
Erika Watson's insight:

Excerpt: "Ten years ago, Brazil set out to do something that few countries have ever overtly attempted: become more equal. The undertaking was unusual, but even more remarkable was the outcome: measurable success. Brazil has in the past decade moved people out of poverty on an unprecedented scale – the standard of living improved so much for 22 million that they are no longer considered “poor.” Millions more living on the knife-edge of starvation in drought-ridden expanses of the interior are still poor but vastly better off. Between 2003 and 2009, incomes of the poorest Brazilians grew seven times those of rich citizens.


And how did Brazil help? It gave its poorest citizens money.

It’s an idea that was once anathema to development experts and economists, and which is still deeply unpopular in many quarters – witness the hostility to “welfare moms” in the developed world. But the effectiveness of giving money to poor people to make them less poor is supported by mounting evidence as a smart way to address poverty. Sixty-three countries have sent experts here to learn about the Bolsa Familia – the family grant.

Brazil’s is not the biggest anti-poverty program in the world – it is dwarfed by several in South Asia, such as India’s $70-billion guaranteed-income-for-work scheme, for example.

And it is not the only one to use cash transfers, which are done on a moderate scale in India, on a larger one in South Africa, and which exist in some form in dozens of developing countries today, run either by the state or by private aid organizations.

What makes Brazil’s program stand out is the rock-solid evidence of the many ways this program has served to remake, dramatically, the lives of millions of people over the past decade.

 

The price tag, however, is astonishingly modest: just 0.46 per cent of GDP, for a total of $11.5-billion this year. (This means that, despite the slowdown in Brazil’s economy, the program isn’t threatened.) Overhead is kept to a minimum – there is no food to move around, as there was in previous nutrition programs that were meant to deliver needy families ration packs, and which were vulnerable to immense amounts of corruption.

And once the national registry was in place, there wasn’t much infrastructure to worry about. The grant isn’t a lot of money, but it is a guaranteed amount, so it allows people to make plans, and sometimes to save – two luxuries the poor never had relying on uncertain work and surviving day-by-day. It taught a new level of financial literacy, Ms. Campello says, to people who had never before had any prospect of regular income to budget with.

She calls it an investment. “These millions of people who get the Bolsa Familia are people who are spending here in Brazil. This money multiplies the GDP. We want them as consumers, as part of the country. And as workers. Brazil needs these workers. So we are not doing this just for social assistance. We are doing this because we believe it’s good for the country.”


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The return of artisanal employment

The return of artisanal employment | Self-employment LM shift | Scoop.it

IT'S been one of the hottest economic questions for at least the last few decades: what sort of jobs will provide a comfortable, secure, middle-class lifestyle for the next generation of Americans? America still has a vibrant manufacturing industry, but it no longer offers large numbers of desirable jobs.

 

During a panel at last week's Buttonwood conference Harvard economist Larry Katz had an answer. He reckons that future “good” middle-class jobs will come from the re-emergence of artisans, or highly skilled people in each field. Two examples he mentioned: a contractor who installs beautiful kitchens and a thoughtful, engaging caregiver to the elderly. He reckons the critical thinking skills derived from a liberal arts education give people who do these jobs an edge. The labour market will reward this; the contractor who studied art history or the delightful caregiver with a background in theatre will thrive.

 

This is consistent with a shift in the labour market I've observed. It seems the market now rewards individual more than firm-specific capital. That's economic jargon for the idea that it's better to be really good at your job than merely good at being an employee. There's less value in being the company man; you must be your own man possessing a dynamic skill set applicable in a variety of ways. That often means honing one's skills by changing jobs a few times, rather than staying with one employer for an entire career. Before the crisis, average job tenure had decreased, while the probably of losing a job declined. That suggests more voluntary job changes.

 


Via Denis Pennel
Erika Watson's insight:

Charles Handy's Empty Raincoat has arrived...

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The fast disappearing income of the UK’s self-employed

The fast disappearing income of the UK’s self-employed | Self-employment LM shift | Scoop.it
A couple of weeks ago I started to prepare what I thought would be a quick blog on the differences between HMRC and ONS data on the number of self employed people.
Erika Watson's insight:

I did similar stats comparison for recent presentations via the Fabian Society. Conclusion is that while government has cheerleaded the increase in self-employment, real support and training for most small businesses has been slashed...  and alongside that chances of business survival.  The cost to new businesses, innovation and the tax take for us all is massive: and it's going to get worse as Universal Credit for the Self-employed destroys the safety net for low earning self-employed people as well.  (see www.prowess.org.uk/universal-credit-self-employed).

 

Also of course,  a significant factor is that for the first time ever most of the new self-employed are women.  

 

 

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How An Exploding Freelance Economy Will Drive Change In 2014

How An Exploding Freelance Economy Will Drive Change In 2014 | Self-employment LM shift | Scoop.it

In 2013, the freelance economy continued to dominate the discussion about the way we work. One in three Americans (roughly 42 million) are estimated to be freelancers. By 2020, freelancers are expected to make up 50% of the full time workforce. Independent work is becoming more common across all generations and the vast majority plan to remain independent in the coming year.

 

The freelance economy is exploding at exactly the same moment that companies are undergoing a major shift in how they hire. Talent is moving from a fixed cost (and one that’s historically been one of the largest across a business) to a variable cost, with companies staffing up and down as needed. Businesses have the ability to quickly on-board hundreds or thousands of freelance workers– provided they have the tools and systems in place to manage them. The booming online staffing industry is also accelerating the growth of the freelance economy. This $1 billion industry provides a valuable alternative to companies that are leveraging a contingent workforce. In fact, the Staffing Industry Association saw the online staffing market grow 60% last year, and we see no signs of that growth slowing down in 2014 and beyond.

 


Via Trudy Raymakers, Denis Pennel
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The sharing economy could end capitalism – but that's not all

The sharing economy could end capitalism – but that's not all | Self-employment LM shift | Scoop.it
The sharing economy could bring about the end of capitalism: that’s the provocative claim made by economic journalist Paul Mason. But research indicates that it actually has many possible futures.
Erika Watson's insight:

Review of 250 sharing economy reports. Balances positives re reduced asset and consumption waste and equalising and cooperative aims of many initiatives with 'always on demand' services and reducing worker rights (Uber etc). Concludes former is low key and marginal -  and while Paul Mason is the only researcher to see Uberisation model as leading to a crisis in capitalism, sounds like the most likely outcome from this analysis too. 

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Britain’s women leading drive to self-employment

Britain’s women leading drive to self-employment | Self-employment LM shift | Scoop.it
The number of self-employed women in the UK has risen nearly three times faster – by 28 per cent between 2009 and 2014, compared with just 10 per cent for men.
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The ‘gig economy’ is coming. What will it mean for work? | Arun Sundararajan

The ‘gig economy’ is coming. What will it mean for work? | Arun Sundararajan | Self-employment LM shift | Scoop.it
The new working model offers greater freedom – and a fresh chance for the rich to exploit the poor
Erika Watson's insight:

extract: In many countries, key slices of the social safety net are tied to full-time employment with a company or the government. Although the broader socioeconomic effects of the gig economy are as yet unclear, it is clear we must rethink the provision of our safety net, decoupling it from salaried jobs and making it more readily available to independent workers.

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Entrepreneurship thrives when local wages are high, Sussex study shows

Entrepreneurship thrives when local wages are high, Sussex study shows | Self-employment LM shift | Scoop.it
Entrepreneurship is a response to, rather than a cause of, wealth creation, according to co-authored Sussex study.
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Is the rise in self-employment really a Good Thing?

Is the rise in self-employment really a Good Thing? | Self-employment LM shift | Scoop.it
Erika Watson's insight:

Guest post by 'Flip chart Rick' uses data to show: 

Self-employment is a feature of poorer countries /  it pays less than employment and half of the self-employed are close to the minimum wage. There is also nothing to suggest that lots of business start-ups will lead to the development of more viable businesses in the future.  

Also concludes that much of the increase is long-term. 

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PCG tells TUC 'self-employment growth is a structural change' - Brookson Ltd

PCG tells TUC 'self-employment growth is a structural change' - Brookson Ltd | Self-employment LM shift | Scoop.it
The PCG has criticised the TUC's assertions that people are being forced into self-employment.
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The UK’s self-employment phenomenon: why the labour market isn’t so strong after all

Morgan Stanley report by Charles Goodhart

Erika Watson's insight:

excellent analysis. Striking diagram of symmetry between increase in older women's self-employment and reduction in retirement age 'inactivity'. 

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Males choose self-employment by choice, women out of financial necessity - ANINEWS

Males choose self-employment by choice, women out of financial necessity - ANINEWS | Self-employment LM shift | Scoop.it
Males choose self-employment by choice, women out of financial necessity ANINEWS Self-employment can allow older workers to stay in the labor market longer and earn additional income, yet little research has addressed if reasons for self-employment...
Erika Watson's insight:

Interesting research

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Untold story of the downturn: the shift from paid jobs to self-employment

Untold story of the downturn: the shift from paid jobs to self-employment | Self-employment LM shift | Scoop.it
Phillip Inman: The ONS pay figures that George Osborne used to show that disposable incomes are rising excluded self-employed workers
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The Peer Economy Will Transform Work (or at Least How We Think of It)

The Peer Economy Will Transform Work (or at Least How We Think of It) | Self-employment LM shift | Scoop.it
The nature of work is changing, just as it has in the past.

Via jean lievens
Erika Watson's insight:

Excerpt: "

Peer economy providers are also vulnerable but with a crucial factor that makes all the difference: They are a visible workforce, able to make these collective interests heard.

The economy of the future will not be the economy as it is now. The challenge before us is to reimagine what full work means, not based simply on how we’re used to conceiving of it, but based on a consideration of what we deem most valuable (independence, security, connectedness, etc.). "

Lays out the challenge but I'm not sure there is much sign that peer economy providers are either visible or beginning to make collective interests heard.  

The peer economy provides independence, and the contemporary increased security of diversity of income, connectedness. But that security still remains too fragile and shallow for most. 

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Flexicurity for the Self-employed

Flexicurity for the Self-employed | Self-employment LM shift | Scoop.it
Flexicurity for the self-employed makes sense. Most new jobs will come from small business, helping them to withstand economic shocks is in all our interests.
Erika Watson's insight:

Just realised I haven't saved any of my own articles in this curation - so here is one. 

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A Way Out Of Europe's Labor Crisis (Part II) : NPR

A Way Out Of Europe's Labor Crisis (Part II) : NPR | Self-employment LM shift | Scoop.it
Nobel laureate Christopher Pissarides of the London School of Economics says Denmark's system of "flexicurity is a way to achieve both international competitiveness and a good social state. It offers a clear road map to labor reform.

Via steve batchelder
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