Spare us corporate life

It is the modern call of the wild, bearing the promise of independence, freedom of spirit and open horizons.

Last Updated: 31 Aug 2010

It is the new Wild West, full of opportunity, entrepreneurialism and courage. It is utopia, eschewing hierarchy, bureaucracy and control in favour of meritocracy, fluidity and creativity.

In other words, it is self-employment. The dream of the post-industrial worker is the nightmare of our pre-industrial ancestors: to be our own boss, reliant on our own skills, sinking or swimming by our merits in the marketplace. Above all, we want control over where and when we work. As Marx pointed out: 'What makes wage slaves? Wages!' (Groucho, that is, not Karl.)

The rhetoric of politicians and business leaders is full of exhortations to more entrepreneurialism, innovation and risk-taking. Charles Handy says the economy needs more 'fleas' to provoke the old, organisational 'elephants'. Of course, the '90s predictions that jobs were dead and that everyone was set to become a 'free agent' turned out to be premature – self-employment accounts for just one person in eight of the British workforce. But as so often with projections, the data has started moving just as the theories are being abandoned.

After bumping along largely unchanged for more than a decade, self-employment has been on the increase: in 2003, the rise in solo operations accounted for all the growth in employment. Gordon Brown has done quite a bit of fiddling with the tax system to encourage small businesses, but he can't take the credit. Nor can the jump be attributed to unemployment, unlike the last major spike during the mid-80s.

Three explanations present themselves for the surge in self-employment. First, as the Bank of England has suggested, the rise in house prices may have given people sufficient collateral to take the plunge. (If property values have indeed fuelled the rise of solo workers, the figures may well be about to reverse.) Second, the diffusion of broadband access and better technology may finally be overcoming the stubborn geographical barriers to some forms of self-employment. This is the only explanation for the fact that the Welsh region of Powys is the self-employment capital of the UK, with one in four working for themselves.

The third possibility is the rise of women in the solo market. The Office for National Statistics reckons that although self-employment among men is rising at a healthy 8.6% a year, the rate among the fairer sex is 9.7%. Men still outnumber women in the self-employed cohort, but women are catching up – perhaps because of a growing frustration with organisational life. But the feminisation of self-employment may reflect the rise in the capital available to women.

The idea of female entrepreneurs pushes lots of positive buttons – it demonstrates that the sexism of the capital markets is being thrust back, it brings in a new cadre of innovators to the economy, and it holds out the possibility for women to 'have it all' – a high income, interesting work and quality family life. It's no wonder that articles about successful women entrepreneurs are a staple of newspaper and magazine editors. Sporting glamorous designer gear and brandishing terrifying CVs, these 21st-century superwomen do appear to have it made.

The advantages of self-employment are real. The ability to avoid the awful meetings that pock-mark organisational life; the freedom from managing people in all their Technicolor dysfunctions; a clearer relationship between effort and reward; and the opportunity to shape your work around your life rather than the other way round – these are all genuine pluses.

But this picture of life on the outside, as a solo agent or entrepreneur, is one-eyed. Amid the articles on the ones who have it all, there are no double-page spreads on the men or women who lost it all – the ones who gave up the security of employed life only to burn their savings and end up bankrupt. There are no stories about the searing loneliness that goes along with freelance life. There are no league tables for the entrepreneurs who sank.

'There is a dark side to striking out on your own,' says Dr Glenda Stone, founder-boss of Aurora, a gender capital management firm and veteran of Daily Mail features and Top Women lists. 'Lots of women get encouraged to go their own way and end up working very hard and still not making it. For them, it's not a dream but a nightmare. Their stories are not heard.'

The point about taking risks is that at least half the time they don't come off. As the economist John Kay argues in his book The Truth About Markets, economies need entrepreneurs and innovators to try out new ideas, which if they work can improve the quality of goods and services available. But for every James Dyson there are dozens with ideas for new dishcloths, marketing wheezes or solar-powered lawnmowers who fall flat on their face. Entrepreneurs, in Kay's terms, are 'irrational optimists'. They are the people who put their chips on '36' on the roulette wheel. Progress needs people like this. But if a majority, or even a sizable minority, of the population were to be bitten by the entrepreneurial bug, economic and social disaster would ensue.

Most people are better off in standard forms of employment. There is nothing wrong with dreams, but the allure of self-employment says more about the dire state of organisational life than the true risks and benefits of being alone.

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