What do the figures reveal? Some 484,000 new firms were registered at Companies House in 2012, and 500,000 are expected to launch in 2013. But this figure is likely an understatement. It doesn’t include those registered as sole traders. And adding the self-employed would miss anyone who makes a little money on the side by trading on eBay or Etsy. So while the number of small firms has surged from 820,000 in 1971 to 4.8m in 2012 (according to Lord Young’s report into micro-businesses), entrepreneurial activity is more widespread even than that. It’s an exciting set of figures.
But aside from the apparent ease of starting a business, Jones points to other trends that are pushing people into self-employment. One is the rise of portfolio careerists – otherwise known as “slashers”. They are journalists/photographers, accountants/retailers, lawyers/coders. Entrepreneurship doesn’t require people to exit full-time work in droves, but perhaps to run a business in the evenings or at weekends. Jones says she regularly meets people in the City who want to launch a business they can work on in their spare time. “It’s an idea to start now while you’re in the day job,” she says. “You can lay the ground while you have job security.”
Ultimately, Jones says this new norm requires a change in the way government (and other businesses) treat startups. “It’s a fantastic bubbling base,” she says. But growth is a problem. British gazelles are few and far between, and some 3.6m of Britain’s 4.8m firms are sole traders – with no staff beyond the founder. Job creation is not the problem, however. It’s that many big firms and government departments are not acting like the startups rising up around them. “Small companies are increasingly using contractors or freelancers on a project-to-project basis,” she says. But these same small firms have not yet been given sufficient access to corporate supply chains.
If you’re interested in seizing on this potential new growth area, there are places to start. Websites like Blur, the business-to-business platform for selling services, could be important. Big users reportedly include Harvey Nichols, the department store, and GE Healthcare, the medical services giant. But Jones thinks this could go much further. Her campaign is looking to leverage its influence to let small firms more easily pitch to big retailers like Sainsburys.
Tom Welsh is business features editor at City A.M. @TWWelsh