Friday, 16 December 2011

Enabling Self-Employment for Those Who Want It

Scott Shane Scott Shane, Forbes Contributor

Few people who work for others think that going into business for themselves in the near future is feasible.  A 2009 survey of 26,000 randomly selected people in 36 countries found that two-thirds of those currently working for others don’t believe that being self-employed within five years is viable.

In most countries, more people want to be self-employed than think they can.  The Gallup Organization survey revealed that in the average country in which people were queried, the share of people who preferred self-employment was 12 percentage points higher than the share who said that doing so would be possible in the near term.

But  interest in self-employment wasn’t greater than its feasibility everywhere.  As the figure below shows, more people said that going to work for themselves was possible than actually wanted to do so in the Nordic countries.  In Iceland, for instance, the share of people who want to become self-employed is 33 percentage points less than the proportion of the population that believes that going into business is feasible.

Moreover, the gap between self-employment preference and feasibility varied greatly across demographics.  Among those 55 and older, the share of the population desirous of self-employment was 25 percentage points higher than the share that considers it possible within five years.  Yet for those 25 to 39, there is no gap between the two measures.

Unemployed people are also more likely than those with jobs to believe that acting on their entrepreneurial preferences would be difficult.  The Gallup survey shows a 21 percentage point gap between the fraction of unemployed people that would prefer to be self-employed and the slice that thinks becoming self-employed in the next five years is feasible. For those with jobs, the gap is only two percentage points.

The gap between preference and feasibility was also large for less educated people.  For the least educated group surveyed, a 23 percentage point gap existed between the proportion of respondents who said they would prefer self-employment and the fraction that thought self-employment within five years was possible. However, only a three percentage point gap existed between “preference” and “feasibility” for the most educated people surveyed.

Percent Who Would Like to be Self-Employed Minus the Percent Who Consider It Feasible.

Source: Created from Data in the Flash Eurobarometer

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