16 May 2015

Make way for the entrepreneurial revolution


This is the weekly newsletter from Iain Martin, editor of CapX. To receive it by email every Friday, along with a short daily email of our top five stories, please subscribe here.

Although there is a risk that the post-match analysis of Britain’s recent general election goes on even longer than the campaign itself, which seemed to last for ever, there are important lessons to be learned beyond the current fixation on how the opinion pollsters and most of the big data gurus such as Nate Silver called it so badly wrong. Jim Messina, who was hired by the Conservatives from the US came closer than anyone to getting it right. However, what is much more interesting than a squabble about the numbers is the way in which Labour was blind-sided by a remarkable shift in the way in which the economy is operating.

In the UK, an entrepreneurial revolution is underway as start-ups proliferate and self-employment rockets. As the broadcaster Andrew Marr noted this week in a piece for the New Statesman magazine, many of those setting up their own businesses or freelancing concluded that Labour under Ed Miliband did not understand private enterprise and would punish them with higher taxes and regulation. As a famous face, Marr was regularly accosted in the street by those running small and new companies, saying that their biggest fear was that Labour hated them and would stifle their growth.

The Conservatives – who tried to take too much credit for the start-up surge, claiming that government itself had created these jobs – were much more sympathetic to those voters, and they reaped the electoral benefit.

Recent experience in Britain reflects the rapidly changing nature of work across countries in the West most open to technological change. Internet commerce, and the need or willingness of people to switch careers and work for themselves, is accelerating a transformation of work. In a former Communist country such as Estonia, start-up culture dominates, and in the US there is great interest in freelancing and self-employment.

This is a hugely positive development which presents a great political opportunity for those who believe in markets, competition and limited government. In the work force of the future there will be far more people who are used to working for themselves, and who do not expect a large organisation to look out for them in every circumstance. As a result, they are likely to be highly sceptical of parties prescribing big state solutions. Of course, big companies will continue to provide employment and the best of them will be staffed by smart, hardworking people. But the economies that prosper will combine successful corporations and a far greater number of noisy, smaller firms.

At CapX we’ll be doing more soon to highlight the changing shape of the economy and the rise of start-ups. If there are any developments or industries you think we should be writing about, please get in touch.

Below are a selection of five pieces from CapX this week. Alongside the original articles we publish, we also seek out and highlight the best writing and thinking from around the world. And this week we launched our letters page after CapX readers – an intelligent bunch – told us that they did not want endless comments at the end of each article, as is the way on many other websites. Instead, we will publish regular selections of the best CapX letters. The best of the month wins a good bottle of wine chosen by me. To send a letter on any topic you want, within reason, please go here.

Have a good weekend.

Iain Martin is Editor of CapX.