FinancialGuy Writes!

In my last post (A European Digital Single Market Takes A Big Step Forwards) I mentioned that there was more to write about the event (the Lisbon Council 2011 Innovation Summit in Brussels).

One of the most interesting aspects of the morning for me was the presentation of a policy brief (you can download it here) titled “The Rise of the Micro-Multinational: How Freelancers and Technology-Savvy Start-Ups Are Driving Growth, Jobs and Innovation” by Lisbon Council’s Ann Mettler and Wikinomics author Anthony D. Williams.

Unusually for someone involved in EU policy matters, FinancialGuy is both a freelancer and the owner/operator of several small, online, international ventures. Whilst growing up, I always loved the phrase “one-man multinational” and now I am one! Therefore, it is with more experience than usual that I feel able to comment on something in Brussels.

Firstly, to the paper…

In a world of debts, austerity and redundancy, they rightly ask where future economic growth might come from. It is not obvious that growth can or will come from the major institutions of government and commerce. They are in a long-term trend of downsizing not growth.

Smaller than SMEs, they identify a trend of increasing self-employment and self-reliance in the economy by experienced and skilled workers. These are people that are creating their own jobs and sometimes jobs for others as well. Their numbers are growing and Williams and Mettler argue for greater recognition of their role and impact in policy setting.

Williams describes accurately a large number of factors about the potential for modern small business models. In fact, I and a number of friends use about 75% of the concepts he writes about. It really is possible to build a company, website, product or income stream that can stand alone and compete in the modern world. I have a couple of friends that earn more per month than I earn per year – it really is possible to survive and thrive alone on the internet.

For me at least, there are a few things about the modern world that are quite clear. Firstly, as this paper discusses, it is possible to outsource specific tasks globally if desired. This opens up a wide range of low cost possibilities for commodity type skills. For example, I have had a number of small concept and test sites built for me by a guy in Islamabad, Pakistan. He does a great job for US$9 per hour. Compare that with a drupal developer in the US or Europe (I have heard of €600 per day at times!) and suddenly it becomes possible to test ideas affordably.

Secondly, for a number of tasks, the trend is no longer towards ‘cheap’ or ‘foreign’ labour. To compete in a global market, being good probably is not good enough. One needs to be superior or excellent. If that is the case, is the lowest cost supplier likely to be the best? It is into this arena that many older, educated and skilled Europeans will move. In a knowledge economy there is a premium to be paid for knowledge!

They describe a number of policy initiatives that could help to promote and protect these freelancers. I cannot disagree with any of the eight proposals. They are very well thought through.

There are, however, two policy suggestions upon which I would like to add my own comments from personal experience. Both relate – I believe – to attitude and desire.

Suggestion 6. Create the right incentive structures for freelancers and the self-employed. Rightly, the paper discusses the situation in matters such as health insurance and unemployment benefits. These are things that governments can and should do something about.

However, in the connected world, there ought to be no end in incentives to become self-employed. My own online businesses have enabled me to cut my working hours substantially each week and move to Malta to enjoy much better weather whilst earning about 90% of the wages in my last ‘job’. The lifestyle of a person’s dreams is possible, they just need to want it enough. What more incentive can there be than living the life they choose?

I believe that this is in large part about education. Can you imagine a career adviser in a school suggesting that a teenager should create their own company online and live their dreams? I wonder what Mark Zuckerberg’s career suggestions were…

Suggestion 7: Prioritize education and skills development to ensure a large proportion of the unemployed population has a pathway to succeed in the new economy.

Education is key. However, it is not easy to obtain the right skills. I cannot even begin to explain the extent to which I have worked on my own education in the last ten years or so. Not only has it been hard work, but it has been very expensive. There are many books available on amazon by world experts that can advance an education in every field known to man for a small financial cost.

However, when it comes to specific business, marketing and online knowledge, acquiring the right understanding is an expensive business. I have spent (I extimate) over US$15,000 in the last few years on courses and products. I find it very hard to believe that the type of education required is available in any school or university. I also find it hard to imagine that there would be many teachers capable of teaching online business as a subject. If they could do it, they would be already…

Unusually, all this self-education and business experimentation is not necessarily a good thing. I firmly believe that I am unemployable. My last few formal interviews were disasters! It was quite clear that after a few hours of research I knew almost as much about the online business I was applying to manage as the current owner did. In my experience, most interviewers do not like to feel that threatened!

Therefore, there needs to be a delicate balance struck. Somewhere between finding people like me to provide education and mentoring to help the unemployed and underemployed and making them skilled as independents and still attractive to employers if that is their preferred route.

None of this is easy, of course. It never is. But if the potential of the Innovation Union is to be fulfilled or we plan to find ways from our economic malaise, somehow we need to find a way forward. I hope that this paper starts some of the right conversations about the rights, encouragement and economic potential of the micro-multinationals.

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