The Venture has long argued for schools to teach entrepreneurship so that young people have the option of creating rather than only applying for jobs. But there is a bigger prize: teaching basic, self-employment skills to every student.
Global trends in self-employment are staggering. By 2020, more than 40 per cent of the US workforce will be contingent workers – freelancers, temps, part-time workers, contractors and other specialists – predicts the Intuit 2020 Report.
Not all will run a business, but it is a safe bet that self-employment rates will keep rising. More workers, in one form or another, will become their own businesses as companies shift employment risk to individuals in the on-demand economy.
Most contingent workers are not entrepreneurs who conceive and launch high-growth ventures. Nor are they traditional small businesses with shopfronts and employees. Often, they are micro, home-based ventures providing income through self-employment.
So where does this potential 40 per cent of the workforce learn to run a business?
Where do contingent workers learn basic knowledge about company structures, asset protection, budgeting, tax, financial reporting and so on?
Where do they learn skills to turn a micro-venture designed for self-employment into something larger?
Let's assume at least a third of Australian university students who graduate in 2020 are contingent workers during the next two decades. For some, self-employment is their best chance of income as reliable full-time jobs for young workers become scarcer.
Will they know what it takes to run a micro-venture, earn regular income and pay the bills? Or do we expect them to learn about business on the fly, make mistakes and threaten their venture's viability?
Australia's education system – across schools, vocational education and universities – does not do enough to prepare students to run businesses. And even less to differentiate between entrepreneurship, traditional small business and self-employment in micro ventures.
It's great that some schools are starting to run entrepreneurship programs. But let's be real: only a fraction of students will launch high-growth ventures and few will take off. Those with an entrepreneurial bent must be identified and nurtured, although not at the expense of basic self-employment training.
Small business courses, too, are welcome at schools and TAFEs. The risk is they attract a smaller cohort of students who see themselves as shopfront small-business owners, perhaps in retail.
Helping our small business sector become 1 per cent more innovative will do more for entrepreneurship in this country than encouraging thousands of start-ups to form.
There's a gap for basic, self-employment training. The type of knowledge that can help a freelance graphic designer, for example, build a better business, or a self-employed tradesman to operate their business as well as they operate their tools.
A young handyman, in fact, inspired this blog. He told me he was clueless about starting or running a business, let alone complying with quarterly requirements, organising annual financial reporting or managing cash flow. Financially, his business was a mess.
The handyman bemoaned the lack of self-employment training at school or college. Such training was probably available, but like many teenagers at the time he never expected to be a company director or filing quarterly Business Activity Statements.
Benefits of self-employment education extend beyond helping young people succeed in business. It is fundamental to boosting innovation and entrepreneurship in Australia, creating a more flexible workforce, and building economic and social wealth.
Entrepreneurship is different to small business, which is different again to self-employment for contingent workers who have micro-ventures. Running a single-person, home-based venture is worlds apart from running a shopfront small business with staff.
But these forms of business are inextricably linked. Millions of people in coming decades will get their start in business through self-employment. Ventures with higher growth will inevitably employ others, lease offices and start to resemble small businesses.
As some of these businesses prosper, they will scale their opportunity and pursue high-growth entrepreneurship. Never forget that small enterprise is a great incubator for entrepreneurship as founders develop their skills through small business.
Improving success rates in micro-ventures designed for self-employment will inevitably benefit small business and entrepreneurship rates.
Helping our small business sector become 1 per cent more innovative will do more for entrepreneurship in this country than encouraging thousands of start-ups to form. We must understand the role for contingent workers in this puzzle.
Imagine if our education system prepared millions of young Australians for self-employment, that it required every student to learn basic skills about working for themselves, and that it saw self-employment skills as fundamental to success in the on-demand economy.
Such education would assist young people who are unsure about working for themselves and the economic benefits would mushroom over time.
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