Tom Abate's SF Chronicle story Laid-off workers start own businesses covers the growing trend of people turning to small business or self-employment after losing a job.
The article describes what UC Santa Cruz professor Robert Fairlie calls "necessity unemployment." This occurs when people start businesses because they don't have traditional job options.
Fairlie is the lead author behind the Kauffman Index of Entrepreneurial Activity and a leading entrepreneuship researcher. His work shows that self-employment increases during times of economic stress and flattens out during good economic times. This is due to necessity entrepreneurs returning to traditional employment.
The good news for necessity entrepreneurs is the cost of starting a small business, and especially a small business based at home, is lower than ever before. Technology has become inexpensive and in many cases even free.
And while most necessity entrepreneurs will return to traditional jobs, our research indicates that a growing number of displaced workers find they prefer self-employment. The reasons given by these people for preferring self-employment are the same as other small business owners. They prefer working for themselves, job and work flexibility, passion for their business and work/life balance reasons.
This group will continue as small business owners even after the economy improves.
I felt the same way when I quit my advertising job 10 years ago to freelance, then stay at home full time with the kids. Working in a cubicle is *so* 20th century!
Posted by: NFL Jerseys | August 15, 2010 at 06:17 PM
I agree with Kim. There are so many options out there besides being stuck in a cubicle working for someone you hate.
Just open your mind and look for it.
Posted by: Allen | November 16, 2009 at 04:19 PM
My husband lost his job last Tuesday; he is a computer programmer. He never wants to work in an office again, and probably won't have to. The past week he has been "co-working" with other entrepreneurs at local coffee shops. Applying for jobs out of state where he can work from home.
I felt the same way when I quit my advertising job 10 years ago to freelance, then stay at home full time with the kids. Working in a cubicle is *so* 20th century!
Posted by: Kim | June 28, 2009 at 06:35 AM
Enjoyed the read. It raised a few more questions.
I wonder what the differences are in Necessity Entrepreneurs in different countries.
Plus, I wonder if the same percentage of Necessity Entrepreneurs from this current recession will go back to traditional jobs as in previous recessions, and if there is a difference, how much?
Could we put that difference down to how easy the web makes it?
Posted by: Cindy | May 31, 2009 at 01:40 AM