While the economic forecasts for the UK, such as by the IMF last week, are becoming more rosy, there is a concern, echoed by Vince Cable in a lecture to the Royal Economic Society, that we are really kick starting the same economy that failed last time round, with significant structural vulnerabilities, around unbalanced trade, footloose capital, stretched consumer credit and propped-up property prices.
What is not on the agenda is what the UK needs – more humble, more practical and more self-reliant than waiting for the macro-economic cycle to turn – which is, as I see it, mass entrepreneurship.
One of the most unfortunate myths of today’s market models is that business is for the likes of others.
We recently published research by the distinguished commentator on entrepreneurship, Dr Rebecca Harding, titled ‘the collaborative entrepreneur‘. As the title suggests, what she found from an extensive, multi-country survey of entrepreneurs is that they are far from the heroic loners portrayed in the media. They are people who want to form teams, to work with others, to put something back when they can. In short, there are far more informal co-operative entrepreneurs than formal co-operative enterprises.
A rather wonderful model for this, for those on benefits, comes from Morocco, France, Belgium and Quebec. An activity co-operative is a launch pad for people who are budding entrepreneurs to make the transition from benefits to self-employment. It provides entrepreneurs with financial and legal cover during the trial business period. This gives them a safe legal status, an income guarantee as the business builds up as well as peer support. The worker co-operative offers the support of a group of people who share the same challenges and are willing to pool their skills and ideas. If successful, they pass through three phases:
1. They remain technically unemployed, but develop their business idea under the wing of the activity co-operative
2. If it is looking good, they become a ‘salaried entrepreneur’, with the security of a part-time employment contract
3. Finally, they become a self-sufficient business, sharing in the ownership and management of the co-operative.
The business sectors range from cookery and cleaning through to furniture restoration and jewellery making. In France, there are around 100 of these worker coops (or ‘scop‘ in France), with eight in Belgium and others in countries such as Morocco, Sweden and Quebec.
I had a first go at encouraging the UK to take up this model, which would involve a relatively simple but concrete set of reforms to the re-introduced New Enterprise Allowance.
The Coalition Government, in its early enthusiasm for open models of business, commissioned a review of policy on employee ownership by the distinguished lawyer, Graeme Nuttall. His review included the recommendation, coming from us, for the Department of Work and Pensions to look at this.
Well, as far a I can see, that pretty much killed it. There is little more that resembles an immoveable object than the UK’s benefits administration. People work together? In business? And if it is French in origin, forget it – we are not going to try and learn from that. The official report one year on from the Nuttall Review said late last year that the recommendation would lead to “information that will be distributed” – like holding back a flood with a leaflet.
This is only one of the many ideas, though, that could harness mass entrepreneurship. For almost every Government intervention on business, there will be a creative variant that uses social economy models to widen economic participation.
UK business should be popular, not in the sense of being above criticism, but in the sense that business is something that we do all feel can be for us.