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‘Giggers’ and start-ups have much in common; M&S woes

Terry smiling headA lot of attention today will focus on Matthew Taylor‘s report on the “gig” economy which will propose measures to strengthen the rights of casual workers who suffer from lack of security, no holiday and sick pay and a denial of other employment rights.

Maybe his next “gig” should be to consider those trying to start a business, as opposed to working for one, and suffer from some of the same problems.

Taylor’s report coincides with new figures reporting growing numbers seeking advice from the Business Gateway service, many of whose clients are also trying to scrape a living, except by working for themselves rather than as hired hands at the mercy of someone else.

The Gateway review was dressed up in glowing terms as a report into SMEs and received the usual unquestioning coverage by some of the business media. Closer analysis raises questions about whether Business Gateway is really helping create growth businesses, as some would have us believe, or just sustaining yet another strand of the lifestyle economy.

According to its review, the service helped 10,629 businesses to start trading during the year, creating an estimated 11,600 jobs. Economy Secretary Keith Brown said “it is extremely encouraging to see that record numbers are seeking out support to continue their growth”.

But do the maths. This works out at 1.1 job per business. In effect, the service supports one-man operations, or sole traders, many of which are unlikely to show much growth, perhaps beyond hiring someone from the aforesaid “gig” economy.

There were no statistics on how many of these start-ups are full-time “businesses” or simply providing part-time top-up earnings to those who just want to fund their semi-retirement or post-redundancy future. Nor were there figures on how many survive.

Whichever way they are presented, as of March last year enterprises with no employees – that is sole proprietors/partnerships comprising only the owner-managers or companies comprising only the employee director – accounted for 69.4% (more than two-thirds) of all private sector enterprises in Scotland and 4.7% of private sector turnover.

Sole traders have always been with us and many of them make a lot of money. They are a valuable and valued sector of the economy. But many may also be run by people who find themselves not much better off – financially or in terms of working conditions – than some of those in the gig economy.

Recent reports have noted how thousands of self-employed individuals often have no holiday or sick pay, work long hours and lack any sort of job security. When Chancellor Philip Hammond tried to hike their national insurance contributions in the March Budget there was a national outcry.

Taylor’s report, apart from recommending improvements to rights and conditions, is an acknowledgement that the economy is changing shape, and that many of us now work alone. This demands a broader examination.

If and when the government comes to implement Taylor’s recommendations it needs to embrace those running micro-businesses who represent another substantial and growing sector and face many of the same issues.

More pressure on Rowe

A visit to Marks & Spencer in Edinburgh’s Gyle centre last week left one lasting impression. While the walls are plastered with posters of young stylish women in the latest fashions, there was barely a shopper in the store below the age of 50, and many who were a good deal older.

M&S has long been accused of mis-reading its core shopper. It has been well known for years as the place we all go for our pants and socks. Functional, hard-wearing, reliable. That should be M&S’s slogan.

Instead, and particularly under the tenure of Marc Bolan, it went for glamour and youth.

It is noticeable that since Mr Bolan left all those television adverts featuring female models have disappeared. Maybe the message is getting through. So it should. Sales of clothing fell again in the first 13 weeks of the year.

Current CEO Steve Rowe has ordered a rationalisation of brands. I have long argued that if it wants to continue selling fashionable clothing lines for the young it should open a separate chain under one of the these brands. That way it might attract the young people it is so far failing to reach.

There is another challenge facing Mr Rowe this morning with food sales showing a rare slip in like-for-like sales. This may be another sign of shoppers tightening their belts as inflation adds to food costs.

M&S doesn’t generally regard itself as “supermarket” although it was boasting recently about winning a supermarket award. Whatever it calls itself, it needs to keep a wary eye on the other big grocers who seem to be eating into its market share.

 

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One Comment to ‘Giggers’ and start-ups have much in common; M&S woes

  1. Ian Ritchie says:

    At my first board meeting at Scottish Enterprise in 1999 there was an agenda item about Business Gateway. I asked if it was the job of the strategic enterprise agency to ensure that ‘window cleaners and hairdressers got established’. Eventually SE gave up responsibility and it passed to local authorities. It’s really important to distinguish between start up one-man businesses and businesses with ambition.

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