Dr Isla Kapasi, University of Leeds Business School, and Professor Laura Galloway, Edinburgh Business School

Like in other developed countries, there has been a sharp rise in the number of self-employed people in the UK over the last two decades. While some of this increase will include the starting point of new businesses with potential for jobs and economic contribution, the vast majority will stay self-employed or sole traders.

And this is a context of employment in which there are few labour rights, no minimum hours, or critically, minimum wages. This therefore is a context in which the risk of in-work poverty is high. To date, the academic and practitioner literature has tended to focus on self-employment as a context of enterprise (or enterprise potential) rather than a context of low incomes and poverty potential. The research reported in this study, sought to fill this research gap.

Supported by Leverhulme Trust and British Academy, this joint project between the University of Leeds and Edinburgh Business School explored the motivations for and experiences of a sample of people in central Scotland who are self-employed and in receipt of income, defined by government measures as below the poverty line. The research took an ethnographic approach, including observations and interviews with 42 participants in order to gain rich information about lived experiences.

Participants were sourced via posters and adverts in local shops and media and these did not specify any criteria about the individual or business beyond having income sufficiently low to necessitate top-up credits. It was expected that the sample would contain individuals such as lone parents and young people with skills deficits amongst other known low-income groups. It came as some surprise therefore that two thirds had tertiary education qualifications (more than half had a degree), and the range of ages and genders was reasonably even suggesting enterprise and low incomes are not the domain of any one particular age or gender demographic. Also striking was the fact that half of the sample were either disabled or experiencing health issues. 

Analysis of the data illuminated two broad observations. First, the sample included a preponderance of individuals who might be described as atypical workers – such as people who lived with poor health, disability or had significant caring responsibilities. The other broad observation was a preponderance of what might be described as atypical businesses – businesses that were not driven entirely by the pursuit of profit, and in some cases, only sustainable with the support of state benefits. In both of these cases – atypical workers and atypical businesses – the drivers and motivations for enterprise were entirely nuanced by circumstances peculiar to an individual’s life and experiences. 

The central message of the research is that while enterprise may be a hypothetically appropriate context of work for some atypical workers for whom the regular employment market may be challenging (because of health or other commitments), in fact, where atypical workers do engage with enterprise, there are challenges and therefore nuanced support implications.  Similarly, where businesses are atypical and operating at the margins of feasibility, there are support implications in terms of finding ways to support those engaged with these businesses, but in ways that are meaningful to and aligned with the ambitions of the individual involved. More broadly, results of this research have implications for research and theory in terms of how we define and study enterprise in all its myriad forms. From a practical perspective too there are significant implications for those in welfare support, pensions and insurance industries as increasing numbers of people opt for self-employment as an employment and career context.