What sort of countries have lots of self-employed people? Poor ones!

After one of my recent posts about self-employment, someone (I forget who or where) asked me if I could plot the percentage of self-employment in a country against its per-capita GDP. There is no way at the moment that I have time to do such complex data crunching. Fortunately, though, I discovered this great site called Gapminder which has done just that. It’s crunched loads of other data too, so it’s going onto the sidebar for future reference.

As you can see from this graph there is, as the OECD said, a strong negative relationship between levels of self-employment and the wealth of a country’s population.

Percentage of self-employed and per-capita GDP 

If you follow the link to the site you can click on the circles to see which countries they represent. The big yellow one on the far right is the US. Broadly speaking, the richer a country is, the lower its proportion of self-employed people. This is not to say that self-employed people make a country poor. It’s the other way round – poor countries have more self-employed people because their economies can’t create enough full-time jobs.

Politicians like to bang the drum for self-employment but they should be careful what they wish for. Too much of it can be a Bad Thing.

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5 Responses to What sort of countries have lots of self-employed people? Poor ones!

  1. Pingback: What sort of countries have lots of self-employed people? Poor ones! - Rick - Member Blogs - HR Blogs - HR Space from Personnel Today and Xpert HR

  2. Bina says:

    6 or 7 years ago I attended a huge gathering of people who’d paid to see a well-known motivational speaker, (my ticket was a gift from a friend). I was struck by the very large proportion (I estimated over 60%) who claimed to be self-employed. They were only there because they were unhappy with their present situation. Ah, I thought, self-employment – unless you’re very lucky, it isn’t the route to happiness, balanced lives or riches is it? Who’d do it? (Some of us have no option!) Seems like the question is, “Poverty or destitution – which is the lesser evil?”

  3. very interesting observation.. so much for the generally believed premise that small businesses / enterpreneurs are real drivers of the economy… Complex economies have complex business structures, industries involving thousands of stakeholders.. Huge complex companies are the sign of prosperity, not individual enterpreneurs..

  4. Self employment is a roller coaster ride and certainly not for everyone. For starters – you have suddenly no one but yourself to blame if things aren’t going your way. A lot easier to be unhappy when you have someone else to blame! 😉
    It is not entrepreneurs that are the real drivers of the economy – it is the entrepreneurial spirit (both within existing and in the seeds of the new). Without it, only monopoly secures future prosperity..

  5. Pingback: Part 9 of 10: Why ‘more entrepreneurship’ isn’t the solution to technological unemployment | Asher Dresner

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