The way people work has undergone a number of radical shifts in the past millennium. James Gribben explores what the part can teach us, and how we made it to the 'gig economy'
The American physicist and philosopher Thomas Kuhn coined the term paradigm shift in 1962. It described a fundamental change in the basic concepts of how things previously operated, much as astronomy changed when Copernicus placed the sun at the centre of our solar system. The way people work has undergone paradigm shifts, with the introduction of industrialisation in the 19th century and then again now, with the subsequent, widespread, adoption of the internet
Imagine trying to start a business in 1200, a couple of centuries before the invention of the Gutenberg press. It probably wouldn’t be easy. All industry was that of the cottage. People would make things and sell them from their home. How could you find your customers beyond word of mouth? For the most part, business needed to operate locally because transportation of goods was practically impossible for most. Professional advancement came though guilds.
These associations of artisans or merchants controlled trades and crafts in their locality. They were the closest approximation you could find to a professional association like IPSE, defending the rights of its members, providing access to the best quality customers and enabling skilled professionals to develop their skills. But industry remained small in scale and there was a closed shop mentality. A bit like the mafia, you were either in, or in the most ominous terms (for your business) you were out.
The industrial revolution changed everything. Factories were built and people worked in them. Houses were built beside the factory and staff lived in them. Ancillary services developed to support these communities. If you travel through large parts of the midlands and northern England you’ll find countless examples, from Crew to Glossup, Ashton Under Lyne to Accrington. The way people worked in this period became viewed as the ideal, from Government’s perspective, because it was easy to understand. Businesses employed large numbers of people who, for the most part, worked on a full-time basis, making it relatively straightforward to determine what rights staff should have and how much tax they should pay. Having small numbers of major employers also made tax collection a doddle as there were only small numbers of people to chase for payment.
The rise of the internet changed everything. What does it mean to work in 2017? Have a phone? That’s enough these days to run your business from. Got a desk and a laptop? If so, what are you doing reading this? You should be off building a website for the next idea that pops into your head.
The barriers to starting a business are lower than they’ve ever been. At the time of writing 4.8 million people in the UK are self-employed. 1.5 million of this group do it in their own home and rising. If you follow employment figures released monthly by the Office of National Statistics you will see that growth is being driven by people who work for themselves. This presents some significant challenges both in terms of working out what rights this ever expanding group should have access to, and crucially, for the Government to ascertain how to easily collect tax from this group and determine whether they are paying the right amount.
Government is clearly worried. In the Autumn, Chancellor Philip Hammond declared that the rise of one-person businesses was having a detrimental effect on tax receipts. And, if you’ve opened a newspaper in the past month you’ve probably seen countless articles about the ‘gig economy’. There is a prevailing narrative that people working in the gig economy are being exploited by the new platforms they find work through. Theresa May’s response has been the appointment of Matthew Taylor, Tony Blair’s former chief advisor, to investigate ‘modern employment practices and suggest ways to support new methods of working.
Following Philip Hammond’s U-turn on tax rises for the self-employed, Mr Taylor’s review has taken on even more significance. His recommendations are expected to be implemented by Government and may have a substantial impact on what rights the selfemployed should be provided. His challenge will be to bring legislation in line with this new reality of how people work, without penalising people who strike out on their own. It is an unenviable task but one that could have lasting effects – until the next paradigm shift at least.