The RSA's self-employment summit was held this week. Here is the brief talk I gave to open the event.
Hello everyone. Welcome to the RSA and the splendour of the Great Room. I just wanted to take no more than five minutes to set the discussion we will have today in broader context. I make no apologies for being slightly controversial as I thought it would be good to get things off to a zippy start.
I was lucky enough to be in the US last week and I had a chance to speak to a very eminent economist while I was there. He told me that the UK is way ahead of the States when it comes to recognising and responding to the rise of self-employment. However, the US is just starting to wake up to the change, he told me, but dishearteningly exactly the same political polarisation is happening on the issue as in the UK.
The left declare the rise in self-employment as the sign of a weakened economy and growing dislocation in the labour market. The right see it as an indication that entrepreneurialism is on the rise and the acceptance of free market principles is deepening.
I used to think that because we have a Conservative-led government in the UK, the right wanted to portray everything that happens in the labour market as rosy and the left everything as grim. But given there is a Democrat in the White House, it seems that something more profound to do with the intellectual DNA of left and right requires these simplistic responses.
The truth is the rise in self-employment and the explosion of micro-business does not fit neatly into the pre-ordained views of either side of our political class. It is a phenomena that is part of a much wider societal shift away from the hierarchical, centralised and large-scale models that were so central to the last century and to which so much of our mainstream politics is still attached.
The self-employed are both rejecting the corporate hierarchies and elites so beloved of the right as well as the traditional world of direct employment and standard terms and conditions which the left is so eager to protect.
This is not just speculation. The RSA’s own research with the self-employed shows that the great majority are happy being self-employed. And most are clear that they chose that route to give themselves the autonomy, flexibility and chance to act creatively that they can’t get in the traditional business structure.
As one micro-business owner said to us, he wanted the freedom to know that when he failed it was his failure and when he succeeded it was his success. For him, the conventional workplace had become an arena for buck-passing and credit-taking and he had had enough.
The growth of self-employment is all of a piece with what the RSA calls the power to create. The burgeoning desire for individual self-determination in a growing number of spheres. Increasingly, across the world people hunger for real control over where they live, the products and services they buy, their family life, their identities and how they spend their leisure time. It was inconceivable that such a powerful force, movement even, would not extend to peoples’ working lives.
The problem with the polarised argument is that it fails to recognise the great opportunity we have to take a major step forward in the nature of work here. For decades work has been associated with employment by another. It usually meant sacrificing autonomy and creativity but in return the worker got a certain set of benefits: decent pay, a good pension, job security. But this contract has broken down as pay has stagnated, DB pensions have gone to the wall and jobs for life have disappeared.
The result is that millions are now voting with their feet and opting for the autonomy and creativity given that the other side of the bargain is no longer on offer. The great challenge to policy-makers, businesses and the self-employed themselves is to create a new bargain for this growing cadre of workers so that their pay is raised, their income security is enhanced and their pensions guaranteed but without the need for them to return to direct employment and give up their autonomy and creativity.
In short, we have, if we seize it, the chance to give a growing portion of the workforce the best of both worlds: the security of the mid-twentieth century labour market combined with the autonomous creativity of the early twenty-first.
Of course, seizing this is far from straightforward. It requires a willingness to think in a radical and imaginative way which sadly seems to elude the majority of our political class nowadays. But that is precisely why we have gathered the fantastic range of people we have here today to start doing the politicians’ thinking for them.
Thanks for listening and I hope you enjoy the event.
Adam Lent's book ‘Small is Powerful: Why the era of big business, big government and big culture is over’ is due for publication in late 2015. You can pre-order a copy here.
You can follow me on Twitter here: @adamjlent