The GEM UK 2018 National Report most notably highlights that workers in the gig economy are twice as likely to start a business or be an early stage entrepreneur than the rest of the population, despite the gig economy often being portrayed as a precarious option to supplement low incomes.
This year’s survey is the first to look in detail at entrepreneurship among gig economy workers. It found that 19.2% of people doing gig work for firms like Uber and Deliveroo were intending to start a business within three years, compared to 8.5% of the general population, while almost 9% considered themselves ‘nascent entrepreneurs’, compared to 4% of all people. A further 25% of gig workers describe themselves as new or established business owners, suggesting their ‘side hustle’ is part of a wider embrace of entrepreneurship.
Click here or more on GEM’s research into the gig economy.
Mark Hart, Professor of Small Business and Entrepreneurship at Aston Business School and leader of the GEM UK team, said:
“Interestingly, the gig economy seems to be an attractive way of working for those intending to start a business or who are in the early stages. Given the flexibility inherent with this type of work it would seem ideal for those individuals who wish to spend time getting their business off the ground and earn a wage at the same time. The latter point is particularly important for those early-stage entrepreneurs who may not yet have a steady monthly income arising from their business venture.”
The report also found that the Total early-stage Entrepreneurial Activity (TEA) rate, at 7.9% in the UK, compares favourably to France (6.1%) and Germany (5.0%) but is lower than that of the US (15.6%). The TEA rate is the proportion of people who are ‘nascent entrepreneurs’ at the early stages of setting up a business, as well as new business owners who have been running their firm for between three months and three-and-a-half years.
Previously higher entrepreneurship rates among black and minority-ethnic (BAME) British people have fallen, reducing to levels similar to non-minority and non-immigrant residents. The drop was particularly pronounced among non-white immigrant groups where the TEA rate fell from 12.5%in 2017 to 7.2%. By contrast, UK-born people of any ethnicity who had lived abroad were the most likely of any group to be early-stage entrepreneurs, at 12.2%.
The report was successfully launched at a well attended event in London, hosted by Natwest at its Entrepreneur Accelerator.
Head of Sales, Specialist Businesses & Business Banking, Paul Thwaite NatWest MD said: “NatWest is delighted to sponsor this report, the most authoritative research into entrepreneurial activity and trends in the United Kingdom. This year’s report highlights that the UK’s entrepreneurial spirit is still strong, with 20% of working age individuals engaged in some type of entrepreneurial activity or intending to start a business within the next three years.”
Mark Hart, Professor of Small Business and Entrepreneurship at Aston Business School and leader of the GEM UK team