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In these days of soaring unemployment, it might seem strange to be asking if any kind of ecomonic activity is good or bad, but the question has come up.In this Business Week article, Scott Shane makes the case that despite high numbers of new company formations, few of these companies ever grow to any kind of scale. Creatives can create a lot of things, he seems to be saying, but jobs ain't one of 'em.
Technically, he's dead right. A strong majority of 'company creations' never go beyond a single person. There's a fair-sized minority that forms companies, but very few go beyond a few employees. It's only that tiniest sliver that start from scratch and grow to employ 100 people.
So, techically, he's right. But, technically, that's not the point.
Most people who work independently don't _want_ to grow into a big company with a lot of overhead. Hiring employees sound kind of like a job, and, by definition, freelancers aren't interested in having a job? @Alora posted this defense of the profession, and most of her points speak to the lifestyle that freelancers enjoy. It's pretty damn good, and I know. It used to be mine.
But I don't think that Alora speaks to Shane's basic assertion: creatives have basically zero impact on jobs creation.
So allow me...after the jump.
Again, there's much truth to Shane's approach, but not much meaning. Expecting freelancers to create jobs is like hoping outlaws will spontaneously start building jails. Ain't gonna happen.
If it's not to create jobs, then what is the benefit of this sector? The answer is simple, if elusive for some.
Freelancers Don't Need a Job
For every independent worker that can make ends meet, there's a "job" somewhere that doesn't need to be created. Freelancers and other independent workers are like the government's teenage kids - they can basically take care of themselves, freeing up the parents to deal with the ones that need more help and attention.
While I have no data whatsoever, I get the feeling that communities with higher levels of self-employment suffer less during a downturn (like now) than those with lower levels of worker independence. Independent workers, my thinking goes, act as a kind of ballast, absorbing the impact through the network. As long as these workers can find work, unemployment is just another statistic.
And that, Mr. Shane, is what freelancers do. They create exactly 1 job: their own.