A new study by AXA suggests that the massive shift towards self-employment seen in Scotland is set to accelerate in the next twelve months.
One explanation offered is that many seek a safety net as they feel their current employment in insecure. And people working in corporate or professional roles are most likely to feel exposed rather than lower income workers.
In line with the findings south of the border, one in ten workers in Scotland plan a startup in the next twelve months, according to the survey by AXA Business Insurance.
The study found that few of these are idle dreamers: 85 per cent of respondents could cite significant steps already taken to start their business (applying for finance, taking qualifications or developing a website). Half are developing client relationships to the extent that they already have projects underway.
Outside of London, Scotland’s pre-startups are the most likely to have made serious financial steps towards starting up – as 36 per cent have pitched for investment or applied for a business loan.
Given the economic and political uncertainty born of Brexit, the findings beg the question why so many people would risk starting up now. One answer may lie in a feeling that their current employment, ‘working for the man’, is unstable, subject to redundancy, relocation or disruption.
While job insecurity was cited as a factor pushing almost half of respondents to plan a safety net business in England and Wales, this trend was more muted in Scotland. Just three in ten connected job instability to their business plans. Rather, a desire for flexible working around family and lifestyle factors were much more likely to be cited by Scots as a reason to start up than in the rest of the UK.
Arts and crafts also dominate Scotland’s startup scene in a way not seen in the rest of the country too. One in five startup ideas involve production of original artwork, or artisan goods like soaps, perfumes and toiletries, jewellery and candles.
A quarter of respondents in Scotland said they will quit their job once they start up. A more cautious 37 per cent will seek to reduce their hours first instead.
Most inclined to throw caution to the winds are older people: seven in ten of those over 45 say they will quit the day job, compared to just two in ten of the youngest entrepreneurs. The higher appetite for risk may well be a reflection of older people having a better financial cushion should things go wrong.
Across the UK, an appetite for radical change among older people was also seen in the types of businesses planned. Eighty eight per cent of over 55s said they would start their business in a field unrelated to their current job. Across the age groups and regions, 67 per cent said their startup idea is not directly related to previous jobs, and entirely unrelated for almost half (47 per cent).
Gareth Howell, Managing Director, AXA Insurance, comments: “This research just reveals the tip of the iceberg. We believe there is a seismic shift underway in the way people work and plan for their futures. Running a business is no longer the preserve of the few, but is becoming a normal career progression, whether it runs alongside a job or is the sole source of income.”
“Disruption is becoming the norm in our working lives too: by the age of 25 most people have had at least four jobs, and by 55 – seven. Combine this with an external world that looks less and less predictable post-Brexit, and starting a business can be seen as a good insurance policy, particularly for those with a good financial cushion or who can keep their day job going too.”