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One-person businesses are taking hold around the globe, with solo operators now counting for 9% of total entrepreneurial activity, according to the latest global installation of the Global Entrepreneurship Monitor Report, a sweeping, 20-year study of entrepreneurship.
In many countries, solo entrepreneurship is a safety valve when traditional jobs are scarce, while in others it is driven by opportunity-spotting, the report found.
Brazil –which the World Economic Forum includes in the “upper middle income” group of countries–now has the highest percentage of entrepreneurs operating in solo businesses, with 53% operating with no co-founders or employees, according to the GEM Report. The county suffered a long recession from 2014 through 2017, leaving few options for people to find jobs or stay employed, the report notes.
The nation with the second highest percentage was Madagascar, where 30% of entrepreneurs in the lower-income economy are flying solo.
The report also tracked participation in gig work for the first time, finding that many gig workers have intentions of starting a business in the near future or are actively setting up a business. It looked at the situation in 27 countries.
“For many countries it may be worthwhile looking into the thin lines between gig economy and entrepreneurship, as the implications of crossing the lines affect not only the individual but also the society at large, given the sheer size of this phenomenon,” the report notes. “For some, gig work could be a stepping-stone toward entrepreneurship. At the same time, the strong presence and influence of competitive online platforms characterized by low-paid gig work may actually put pressure on both employment and entrepreneurial opportunities.”
The Republic of Korea had the highest rate of participation in the gig/sharing economy activities—with 21.5% of the adult population taking part.
The countries with the next highest participation were Israel (12.3%), Chile (11.2%) Ireland (10.9%) and the United States (10.8%).
For context, the GEM report found that globally, 12.6% of adults are involved in early state entrepreneurial activity; 8.5% of adults are involved in established businesses.
The GEM Report’s coverage of solo entrepreneurship and gig work is noteworthy, given the size, scope and prestige of the report, founded by London Business School and Babson College. Today it is sponsored by Babson, Universidad del Desarollo and the Korea Entrepreneurship Foundation.
Until recently, solo businesses were mostly an afterthought in studies of entrepreneurship. Policymakers have given most of their attention to job-creating businesses except when discussing the misclassification of workers as independent contractors in the gig economy.
But perhaps change is in the offing, given the sheer numbers of solo entrepreneurs who are creating their own jobs today.
The co-authors of the report—Donna Kelly at Babson College and Niels Bosma at Utrecht University in the Netherlands—have set a precedent in this report by treating the self-employed as an important part of the entrepreneurial economy.
And, according to the report, there are new findings yet to come. The GEM researchers announced they are planning a special subject-matter report on the gig/sharing economy worldwide.
That could be a game changer. Having more well-vetted, comprehensive data from serious academic researchers could be a first step toward improving the situation of solo entrepreneurs, who, at the moment, operate outside of the social safety net in many societies.
January 30, 2019 at 05:50PM
Forbes – Entrepreneurs