Micro-business in the UK is now big: it’s time we understood it better.

September 30, 2013 by
Filed under: Adam Lent, Enterprise 

By Adam Lent, Director of the Action and Research Centre, RSA
Nicole Vanderbilt, Managing Director for Europe, Etsy

The rise of the very small business seems unstoppable. Over the last forty years the total number of businesses in the UK has grown from around 800,000 to almost 5 million. Over 95% of these employ less than nine people meaning they are officially ‘micro-businesses’. That’s an awfully rapid growth in this type of company and a very big shift in the way our economy works.

And the trend only seems to be accelerating: the number of micro-businesses has grown by 40% in the last decade alone.

These micro-businesses may be small but they are powerful. They now account for a third of all employment in the UK (almost 8 million people) and a fifth of private sector turnover. It is also clear that smaller companies have generated more jobs in recent years than big business.

Strangely, however, we do not know much about this increasingly central part of our economy. Why has there been such an explosion of micro-businesses? What does it mean for the future of the economy? What impact has it had on our society’s values and politics?  We can speculate but there has been little hard thinking or rigorous research.

We also know surprisingly little about the motivations and hopes of the people who run micro-businesses. How many, for example, run a micro-business primarily because it gives them greater autonomy and the freedom to be creative and how many are looking to make their fortune? We simply do not know.

This is why the RSA and Etsy have teamed up to launch a research project – called The Power of Small  – to answer these and other questions. Over eighteen months, we will run surveys, conduct interviews and analyse data to understand as much as we can about micro-business in the UK. Our findings will be presented through a series of reports, public events and on the RSA and Etsy blogs.

A central part of the project will be to find out as much as we can about the many Etsy sellers in the UK. We’re particularly interested in the connections they form with each other, their customers and the world outside Etsy.

The aim is not just to find out more about micro-business for its own sake. Ultimately, we want to help government, support organisations and, of course, micro-businesses themselves understand how small-scale enterprise can build the more creative society for which both the RSA and Etsy are aiming.

If you’d like to know more about The Power of Small project and want to be kept up to date with developments contact Ben Dellot by emailing him at benedict.dellot@rsa.org.uk

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