This month I am going to talk about a subject incredibly close to my heart, the Self-Employed, Start-Ups and Digital Skills.
In 1998, I became acutely aware that the Internet would give rise to a tremendous amount of new companies. Recent statistics back this up – the rise is substantial with 4.9 million self-employed people in the UK. The community I started in 1998, Ecademy, grew to one of over 600,000 self-employed and Micro Businesses, and one thing they all had in common was their early adoption of Digital. This made the community highly engaged and very digitally competent.
I recently read this excellent article online "Self employed – the nouveau pauvre". There are some interesting thoughts that come from the author, @FlipChartRick:
- The self-employed now account for 14 per cent of the employed workforce.
- Ian Duncan-Smith claimed that welfare reforms were reviving Britain's entrepreneurial spirit. These benefit reforms might have been one of the factors leading to higher rates of self-employment.
- In 2007-08, 4.9 million self-employed earned £88.4 billion. In 2011-12, 5.5 million self-employed earned £80.6 billion.
- Sadly, the 600,000 extra people did nothing to raise the total self-employment income; they simply competed with those already there for a much depleted pot.
Working in the Skills Sector for Digital Entrepreneurial Growth, I am thrilled that the last two to three years in Further Education (FE) has seen a growth in the energy around helping our young people become entrepreneurs. These young people have many skills unique to their generation and they are building many digitally-based entrepreneurial businesses. In fact, I am thrilled to be acting as a mentor for The Duke of York and Nominet Trust's iDEA Programme that is supporting ambitious young people into Digital Start-Ups. This month I kick off mentoring two young men who have just left Westminster College, with their new business.
With this focus on FE, the combination of enterprise and digital, I wonder what the FE Sector is doing to help the existing micro and self-employed businesses to adapt to Digital. The statistics I shared earlier highlight that we have seen no growth in real income through the additional 600,000 extra self-employed workforce and I wonder, in fact, if I am obsessive about how much of this loss of opportunity is due to few truly understanding Digital and having the skills that our young have. A recent BIS document stated this as a priority:
The BIS Small Business Survey shows that although most SMEs are online, only 59% have a website and only 33% sell their goods and services online. In the Information Economy Strategy (July 2013), Government committed to helping 1.6 million SMEs improve their digital skills, including by trading online, by 2018. BIS is leading work with the Government Digital Service, Go ON UK and industry to deliver this ambition.
This begs the question, does FE have a bigger part to play in the support of their local Start-Ups and SMEs and...is FE able to attract, select and recruit the skills within their staff for these SMEs to really trust them and benefit from their training?
I have a fear about this. There is a huge lack of competent Digital Trainers and experienced people who can combine their digital knowledge with commercial and empathetic experience. They command large daily fees and they achieve them now as the corporate world is swallowing them up. Salaries of around £150,000 to lead Social Media in a medium to large company are common, as is a daily rate of £1,500.
This year I was working with my husband to select 30 people to work for his company and the task to find them, reject or select them was huge, and our daily rate for pay was high. It is very hard to find good Digital Trainers. FE needs help with this for sure; you cannot just put an IT Teacher into this role.
On another point, I am starting a new Surrey-based Company myself. I want to consume local suppliers and have a Local Business Manager in a bank. I found a local Accountant, Lawyer, hired a local young person, (because I knew how to!) but I could not find a Bank that had a resident Business Manager to help me through the skills I need to start-up. I was being a case study for myself and I saw how hard it is.
So, looking at FE, can it really support Start-Ups, the skills, the soft skills, the emotion of risk, the need for community and the need for peer-to-peer business friendship? I think this is a huge opportunity for FE, yet with the focus being on Skills Funding Agency funding and the drive to work with large employers as they are financially more suited and skilled to hire Apprentices, I can see the barriers to making this work. How many FE Colleges have been able to make the ATA model work? So, if Banks don't help, and FE can't support, where are all these start-ups turning to? I guess links like this from HMRC help, but let's get real!
Clearly, the drive to work with growing start-ups will stay with us and clearly Digital is a critical part, so these two agendas seem to me something we all need to crack.
I would love to hear from any FE Colleges that have created a Start-Up Community and helped with the skills and support they need. Perhaps there is some sharing of best practice to encourage others.
Penny Power is founder of the Digital Youth Academy