What’s driving the UK’s entrepreneurial surge?
The recent surge in UK’s entrepreneurs has been undeniable, but although accentuated by the 2008 economic crash, the trend actually predates the economic downturn with a consistent transition towards self-employment. This trend reached a record high last year with an estimated 4.5million self-employed individuals across the UK. But what can this surge be attributed to?
There is much speculation to the reason behind it and many variables to consider ranging from the gradual change in cultural mind-set and the creation of new markets to, notably, the rise in technology. Technology is changing the way in which startups operate in the UK, both with ease and accessibility to significant reductions to the cost of starting a business. On top of this, digital entrepreneurship has emerged as a startup category itself, and was identified as a key growth factor for the UK economy. Much of the growth in startups has been fuelled by a booming technology industry, where the growth of technology clusters in the UK has led to both an increase in the number of jobs available and also intense competition among those in need of people such as software developers. This importance on digital capabilities is increasingly central to success and growth across all startups, with fears already that the UK may face a digital skills gap.
But these claims of new markets and entrepreneurship categories are contrasted by the Labour Force Survey conducted by the Office for National Statistics, who state that there has been a significant decrease in the average number of people leaving self-employment and returning to employment each year, and this could be behind the significant increase in the number of self-employed individuals over the last five years. The survey suggests that this change can be explained by the rise in people working beyond the default pension age and the rise in unemployment after the economic downturn reducing the opportunity for people to transition from self-employment. This links the cause of the UK’s entrepreneurial surge back to correlation between the rate of unemployment and self-employment: is this rise in self-employment voluntary or a forced reaction post crisis?
