UK self-employment driven by ageing workforce and women

Despite many people attributing the UK's rise in self-employment to recession-led job cuts, new research suggests that other structural changes were more influential.

A report by the Bank of England shows that the UK's workforce aged over 65 has more than doubled in the last five years, now totaling nearly 500,000. These workers account for more than half the rise in self-employment since 2004.

The Bank also noted the increase in female entrepreneurs, who now account for a third of the nation's self-employed population. What's more, data from the ONS show that the number of self-employed women has increased by 34% in the last five years, compared to a 15% increase among self-employed men.

Technology was also cited as a major factor influencing this trend, as it has helped to mitigate some financial and logistical issues that would once have held entrepreneurs back. 

Of course, the effect of the recession on the UK's job market cannot be discounted. It is possible that more older people and women have felt the need to continue working due to financial strains posed by the struggling economy.

Nonetheless, the Bank report's authors suggest instead that people may be more attracted to the "greater flexibility" offered by self-employment, and are now able to start a business as a result of increased "knowledge or experience."

Roy Thurik writes that entrepreneurial activity can create upswings in market performance, and that economists can predict boosts in the business cycle using data on nascent self-employment. However, this trend only applies to opportunity entrepreneurship, as opposed to necessity entrepreneurship which is driven by economic downturns.

Alexander S. Kritikos is a strong advocate for entrepreneurs, due to their ability to increase market productivity and create new jobs. He reasons that entrepreneurship is important to economic development, and encourages governments to "cut red tape" and streamline regulations to make such activity feasible.

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