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Self-employed people and the systemic suppression of economic development: A global perspective

Ken Phillips

January 2011


This is the first in a set of articles being published during January 2011 which look at (and update) issues affecting self-employed people and how these impact on economic development---conducted with a global perspective.

8 January 2011: Article 1: Theory of innovation and self-employed people.

If you're familiar with what we do at Independent Contractors Australia, you'll be aware that we were formed to advocate and lobby for the rights of self-employed people to be just that---self-employed, their own boss. Our persistent battle is against the institutional barriers that discriminate against people being their own boss and that seek to force 'us' into the controlled environment of employment. These barriers include tax, social security and many other laws which, globally, share many generic features but display different specifics depending on the legal frameworks operating in individual countries.

In this series of articles we are looking at global trends. I covered much of this in my book Independence and the Death of Employment (first published in 2005. Here's a recent review.) But that information needs constant updating.

The articles in the series will cover:
  • Economic Development: Economic development depends on innovation and entrepreneurship. We ignore the importance of self-employed people for entrepreneurship at our peril.
  • USA: The trend in the USA to destroy self-employment and the philosophies that drive this.
  • UK: The attempts in the UK to allow self-employment to flourish.
  • Australia: A summary of the trends in Australia which suppress self-employment and how these trends must be fought.
None of these articles pretends to be a complete analysis. Rather they should be considered as works in progress.

Thinking about these issues is particularly important at the moment because the economies that have been most vital for global economic growth since WW2---USA, UK, EU and Japan---face significant difficulties. They are in debt crisis and are either trying to resolve problems through austerity measures to bring debt under control (EU/UK) or creating more debt to stimulate their economies in the hope that government-debt-stimulated economic growth will resolve debt (USA).

What's really needed, however, is a surge in innovation, because it's innovation that creates true and consistent economic development and growth. Ultimately this is the only viable solution to the problem of stagnant or declining economic development. My proposition is that self-employment is perhaps the most important driver of innovation. Yet this is by and large ignored by academics, managers of firms, governments and economic policy-makers.

In summary, these January 2011 articles argue that:
  • There's a large gap in our understanding of how innovation comes about and that gap is filled through an understanding of self-employed people.
  • Government policies and much of our collective managerial and cultural approach to, or should I say antagonism towards, self-employment suppresses self-employment and hence suppresses economic development.
Taken together, these articles constitute part of ICA's ongoing campaign to reform obstructive laws and approaches in Australia toward self-employed people, but it also takes our campaigning global.

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