I once heard someone telling me:
Whenever I say I am a freelancer, people assume I am the sort of Steve Jobs type of entrepreneur or one with a “google in the garage” mind-set. In reality I am not at all in the high tech sector and my business never required high risk funding nor venture capital support. I even started as a self-employed without a business plan nor any funds in the bank. The connotation of micro-entrepreneurship with a fast growing enterprise that employs staff and aims to become a big business is wrong, although as I like to say: “Well, I am not an entrepreneur, though I do have to be entrepreneurial”.
Independent professionals are entrepreneurial at heart; working on a self-employed basis and taking on the risk and cost of downtime, both within and between projects. They enable innovation driven businesses to tap into diverse talent on a variable cost basis, which makes these businesses agile, flexible, forward looking and internationally competitive. They help small and large businesses to perform more cost-effectively, especially when recovering from the recession, and create new permanent jobs for others. And what is more, independent professionals and the self-employed are not only a source of productivity and growth. Being one’s own boss is also associated with greater job’s satisfaction, well-being and improved work-life balance.
Who are Micro-Entrepreneurs?
In many ways, independent working represent a new approach to entrepreneurship, where autonomy and independence matter just as much as any financial driver. Many want to keep their business at a scale they are able to manage themselves. Independent professionals and self-employed workers typically represent a new model of entrepreneurs, called micro-entrepreneurs or solo-entrepreneurs, the key characteristics of which are:
- They work by themselves keeping their businesses at a manageable size, without the intention to hire employees and/or to grow into a larger company.
- They can begin to trade immediately without needing infrastructures, any funding, a business plan and often learn business skills as they go.
- They measure growth in unconventional ways, balancing income generation with business autonomy, flexibility, long term self-reliance and personal well-being.
Esther, a 52 years old independent journalist from Spain, told me:
I prefer to keep my business sustainable by mixing a high degree of autonomy, work-life balance and control over my professional career, which being an employee would never give me. While working as a freelancer from home, I wish I was able to earn the same income that I did when I was employed, and have the flexible schedule, reduced stress, and sense of achievement that comes with being my own boss. As a mother of three, I want to contribute to our family’s bills and savings, but also have the freedom to arrange my time so I can care for our small children.
What’s the Added Value?
Micro-entrepreneurship also has the potential for positive effects on the labour market integration of specific groups of workers. This mainly relates to people who cannot or do not want to do a full-time job, for example due to childcare responsibilities, pursuit of education or ill health or beneficial for workers in remote or rural areas with limited job opportunities. In this regard, self-employment makes entrepreneurship accessible and low-risk for a broad variety of populations.
Entrepreneurship services including the Erasmus for Young Entrepreneurs Programme need to reflect these requirements by creating support that is relevant to this more informal and quickly growing segment of the European labour market made of micro-entrepreneurs.
What’s the Challenge?
Offering training and general start up services to entrepreneurs are quite common good practice examples in Europe. However, the challenge for many micro-entrepreneurs and the self-employed is to carry out an in-depth analysis of their own practice and business model and identify improvements and future opportunities. The real need therefore is specialist advice, one-to-one coaching and personalised mentoring tailored to the individual solo-entrepreneur, which could be offered through a virtual platform and a European network of mentors. Innovation vouchers — which already exist in some European countries for SMEs — may allow self-employed people to buy innovative consulting services and know-how, and should become more widespread. Furthermore, successful schemes should provide a combination of training and practical experience.
What Should the EU do?
In the review of the Entrepreneurship 2020 Action Plan implementation, the EU should promote collaborative schemes whereby independents could team up with other independents to pool their talents and address more complex challenges in the marketplace. Joining forces with other independent professionals and the self-employed allows them to more effectively compete with larger companies and offer a broader range of services, including the opportunity to bid on larger projects than they would be capable of doing on their own. Collaborative forms of entrepreneurship lead to better work-life balance and results in upskilling and efficiency gains for the self-employed. Structures like coworking spaces and business incubators, which may be run with the support of the Enterprise Europe Network and the EURES National Coordination Offices, could greatly assist to bring about these changes.Marco Torregrossa