GEM overlooks value-based entrepreneurs 7 April 2011
Posted by cooperatoby in cooperative, social economy.Tags: COPIE, self-employment
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At the COPIE mid-term event Kick-starting Economic Recovery in Berlin on 31 March, Professor Rolf Sternberg of Hannover University talked about the economic effects of necessity entrepreneurship. Professor Sternberg is part of the team that produces GEM, the Global Entrepreneurship Monitor, which has just published its 2010 report.
In his allotted 10 minutes, he explained that GEM divides the world into two types of entrepreneurs:
- opportunity entrepreneurs: “I am involved in this firm to take advantage of a business opportunity”
- necessity entrepreneurs: “I am involved in this form because I have no better choices for work”
GEM’s research shows that necessity entrepreneurship is more economically relevant than they expected, and is getting more so. About 2 million Europeans are necessity entrepreneurs. Greece has 2.3% of adults in this category, while Denmark has only 0.2%. Unspoken message: self-employment makes you poor.
I didn’t find myself anywhere in this classification – yet I am undeniably an entrepreneur in a small way, or at the very least self-employed. GEM’s oversimplified picture leaves out all those people who go into business as away to meet needs that are higher up the Maslow’s hierarchy of needs than the search for profit or power. Two major motivations in this category are:
- to change the world for the better – leading to social enterprises
- to gain control over one’s own working life – leading to worker’s co-operatives.
If we fail to recognise these value-based motivations for self-employment, then we will fall into the trap of censoring the message that self-employment can be fun – so we will end up with fewer entrepreneurs and a more ossified society.
Professor Sternberg said that GEM has developed a more sophisticated typology of entrepreneurship. I’m not sure it’s published, but it deserves to be.
Network employment & collective self-employment 22 February 2011
Posted by cooperatoby in cooperative, EU.Tags: entrepreneurship, microfinance, self-employment, social enterprise
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I went to the European ‘Mutual Learning’ seminar on self-employment last November, and felt a bit like a specimen in a jar, or Banquo’s ghost at the feast. All around me academics and employment service officials, employers and trade unionists were trying to make sense of this strange species of self-employed people. The tools they have to understand us are not up to the job.
The way they look at us is that we are poor failures who can’t hack in the world of being employed. People only become self-employed for short periods between ‘proper jobs’, and they only use the term as a figleaf to disguise the shameful fact that what they are is actually UNemployed. The fact that there are people who have been happily and productively self-employed for decades seems to have escaped their notice entirely.
I spoke up about this, as the token self-employed person in the room. Perhaps naively, I was surprised that my version of reality didn’t appear in the minutes of the meeting.
This is anomalous at a time when the European Commission is trying to stimulate entrepreneurship; indeed immediately after the thematic review on self-employment came the launch of the European Progress Microfinance Facility, which is designed to encourage more self-employment. Yet there still seems to be a terrifyingly corporatist view – that self-employment is somehow abnormal, and even maybe a bit shady.
Grey zone
Theorists seem to want to divide the world of work into two species: employers and workers. They are thought to have different motivations – employers love innovation, create wealth and jobs, and have to be incentivised with tax breaks, while workers are stick-in-the-muds whose wage demands have to be held in check. I don’t feel that I fit into either of these catgories. I have about 30 customers or employers, with whom I have long-term relationships and who use me for jobs from time to time. It’s not an anonymous red-in-tooth-and-claw spot market. By some version of the 80/20 rule, at any one time a handful of these account for most of my time. Both parties treat this relationship as a long-term one, and there is considerable loyalty on both sides, even though there is no contract that enforces it. It is a voluntary collaboration that can be dissolved at any time. It suits both sides because the ‘employer’ can tailor its freelance workfroce to the fluctuating work in hand, and the freelance can gain varied experience by working on different projects, and can pick and choose to fit their ethical beliefs and preferences. I think we need a new concept for this: I would propose ‘network employment’.
Collectives too
There’s another positive aspect of self-employment that seems to be largely off the policy map, too. This is the way that groups of people in search of self-actualisation can gain control over their working lives by setting up worker co-operatives. This sort ofcollective self-employment is longer lasting than the individual type.
