Do you want to be your own boss?

Tuesday 4th November 2014

DO YOU WANT TO BE YOUR OWN BOSS?   

Each week Nick O' Shiel, Chief Executive, Omagh Enterprise Company, blogs on issues related to enterprise, technology and the economy. This week Nick asks if you want to be your own boss.

Many economic observers agree that the number of people starting in business and working for themselves is growing. There is less agreement, however, about what is causing the growth and whether or not it is good for the economy and good for the people involved.

Critics see an increase in self-employment as a reflection of a troubled and structurally weak economy that is failing to create enough jobs.

They suggest that many people who start a business do so as a hobby or lifestyle choice and therefore are not economically significant or serious.

They argue that many new business and self-employment opportunities are part-time and require only low-level skills and that most people choose self-employment out of necessity, rather than as a positive choice.

They are, however, wrong.

Evidence shows that much of the increase in self-employment has been in high-skilled, professional, well-paid jobs and that many people choose self-employment to make the most of an opportunity.

Experience also suggests that an increase in part-time self-employment leads to an increase in full-time self-employment, as people develop hobby businesses into ‘real’ businesses.

The naysayers also argue that the growth in self-employment is due in large part to the recession as companies reduce staff and cut costs; claiming that the trend will reverse in tandem with a pick up in the economy.

On the face of it, the argument makes sense except for the fact that self-employment and small business growth was happening before the recession began and continues in parallel with the recovery.

In this context, there is evidence that once someone starts a business they are unlikely to return to employment; in fact, if their business fails they are most likely to start another rather than look for a job.

There is, however, a view that a lack of jobs in the economy explains why more people are working for themselves, as they are forced to create their own job instead of look for one that doesn’t exist.

This point of view is balanced by the belief that a fundamental shift is taking place where more people simply want to be their own boss and find meaning in the work they do.

It appears, on balance, that the number of people starting in business and working for themselves will continue to increase, even as the recovery quickens and gains momentum.

SO, the economy is changing and the creation of new businesses is an important and, most likely, permanent source of jobs and self-employment.