GAT: ACTS Telework Chain
Provisional Guideline GA-G2:

Telework: Access to Work Opportunities for Self Employed, Micro-Enterprises and Virtual Enterprises

Contents List

• Executive Summary
• Guideline Objectives and Intended Audiences
• Discussion and Recommendations
  • Self Employment, Micro-Enterprises and Virtual Enterprises
  • Common Characteristics
  • Economic and Employment Significance
  • New Opportunities and Challenges
  • The Telework Opportunity and Challenge
  • The Gap in Policies and Programmes
  • Recommendations
• Roadmap: Detailed Requirements (to be developed subject to response to the Provisional Guideline)
• Open Issues

• State of the Art (to be developed subject to response to the Provisional Guideline)
• Supporting References (to be developed subject to response to the Provisional Guideline)

Telework: Access to Work Opportunities for Self Employed, Micro-Enterprises and Virtual Enterprises
Executive Summary

1. The initiation of actions designed to increase understanding of the opportunities, needs and problems confronting self employed persons, micro enterprises and virtual enterprises in the transition to an Information Society;
   
   
2. A review of ongoing and planned programmes and initiatives to ensure that the needs of these new forms of trade and employment are fully considered;
   
   
3. A particular focus on the identification and removal of barriers to the success of self employed persons, micro enterprises and virtual enterprises, especially in the area of legal, regulatory and fiscal barriers, at international as well as European and national levels;
   
   
4. Support to rapidly increase and underpin the effective use of existing and emergent technologies by self employed persons, micro enterprises and virtual enterprises, especially transnational networking to support telecooperation within and beyond the European boundary.

Guideline Objectives and Intended Audiences

• To focus attention on the role and significance of self employed persons, micro enterprises and virtual enterprises to economic development and job creation in the transition to an Information Society;
• To specify the common characteristics of these new forms of working and how they differ from conventional corporate enterprises (including SMEs);
• To point to gaps in policies and programmes that affect Europe's success as a breeding ground for successful innovation by these groups;
• To recommend actions that will enable and support them in making the fullest possible contribution to wealth creation, attractive work opportunities, social cohesion and European leadership in the Information Society.

• Actors at European level having an impact or influence on policies, programmes and initiatives affecting self employed persons, micro enterprises and virtual enterprises, including relevant Commission Services, the Parliament and relevant Councils of Ministers.
  
  
• Fora, working groups and expert groups convened to explore and report on the development of an Information Society.
  
  
• Existing and potential projects that have as part of the target user communities the SOHO (Small Office - Home Office) market, SMEs and Citizens.

Discussion and Recommendations

Self Employment, Micro-Enterprises and Virtual Enterprises

Common Characteristics

• They represent a significant and increasing proportion of the total labour market and the total GDP potential;
• They provide rich potential for innovation;
• They are inherently more flexible than conventional enterprises, both from a labour market and an economic development perspective;
• Subject to meeting some important criteria, they can be more secure for the individuals concerned than traditional employment modes;
• Conversely, this security is obtained by having the flexibility to operate across conventional sectoral and geographical boundaries and to form and re-form structures based on opportunities rather than on planning, so that from a conventional enterprises standpoint they can appear to be fragile and even ephemeral;
• As enterprises, they have very low capacity to handle imposed overheads, particularly in a regulatory and reporting context (though this is to some extent mitigated by a tendency to be unaware of regulations!);
• They include many innovative and pinoneering users of technologies, but (except where the focus of the enterprise is technology) they suffer from low capacity to cope with the cost and effort of implementing new systems, migration, keeping up with new releases etc;
• It is difficult to provide effective support to them through conventional market mechanisms - this is the case with support such as training, business development, access to finance etc, as well as support to technological change; in part it is due to their need to focus out into their markets and their lack of requisite complexity for handling multiple support channels;
• For economic developers they are the ultimate "moving target" since their innate flexibility means that success often depends on quite routinely dissolving old "enteprises" and reforming around new opportunities;
• Their decision making processes tend to be idiosyncratic and event driven not planned;
• Absence of or deficiencies in marketing skills and experience are typically a significant barrier to success;
• Conventional economic analysis has difficulty in tracking and reporting on their patterns of development;
• Today's social, economic and regulatory "machinery", which has evolved in an era dominated by conventional emploment and enterprises, is largely unhelpful to their success and can even be inimical;
• Although their ranks include many ambitious individuals who may be seeking to start enterprises on the conventional corporate growth path (leading to equity shareholders and development in to small then medium then large enterprises) a majority seek to remain small and self contained, because their satisfaction derives from direct involvement in their work and with their customers;
• Even among the most successful, there are few individuals who combine both the desire and the innate competence to become large scale entrepreneurs
• Generally they have low requirents for capital, though success leads in some cases to needs for working capital which they may find hard to source.

Economic and Employment Significance

New Opportunities and Challenges

The Telework Opportunity and Challenge

1. Opens up new markets in which self employed persons, micro enterprises and virtual enterprises can gain work opportunities through telework. European self employed persons, micro enterprises and virtual enterprises can now deliver their talents and skills to customers (employers) anywhere in the world, without incurring the costs of travel and without needing the kinds of "presence or representation on the ground" the difficulty and capital cost of which has previously previously prevented such businesses gaining access to overseas markets, or indeed in most cases to any but extremely local markets..
   
   
2. Facilitates the development of global networks of self employed persons, micro enterprises and virtual enterprises, able to compete on an equal footing with more conventional enterprises. Europe's heritage of multiple languages and as the cradle of international trade in the industrial era, couples with more recent experience in working together across national boundaries through European Union initiatives, provide a potentially very strong base for success in leading and managing such networks.

1. Europe has been slow to accept the positive benefits to be derived from the growth of telework and of the increasing role of self employed persons, micro enterprises and virtual enterprises in achieving the benefits. Indeed there are voices seeking to "defend the past against the future", by seeking to extend to self employed persons, micro enterprises and virtual enterprises the "industrial era" legal and regulatory envirionment that developed around the model of corporate employment and which can be quite inappropriate for new-style enterprises (see Open Issues).
   
   
2. In many ways Europe is unwelcoming to self employed persons, micro enterprises and virtual enterprises. This "lack of welcome" ranges from fiscal pressures (in many countries the tax authorities require self employed persons to prove that they are self employed rather than accepting that it can be a personal choice), through needless burdens of uncertainty (the self employed teleworker faces alone a set of regulatory and fiscal issues that in a large corporate employer demand and get skilled professional attention), to a general social rejection (illustrated in the use of terms such as "atypical employment"; the social custom of asking "What do you do?" but meaning "Who do you work for?"; and the general assumption that self employment and other novel forms are second best - a forced choice for those who cannot obtain conventional work, rather than an honourable and - given the right environment - profitable preference).
   
   
3. The forces that open up new markets also present new forms of competition. In the past, self employed persons competed for work only with others in the same country and usually in the same part of the country, and on an equal basis from the standpoint of costs, overheads, regulations and social expectations. In an Information Society self employed persons, micro enterprises and virtual enterprises face competition from enterprising and vigorous equivalents anywhere in the world. Such competitors may well be working from a lower cost base, a more welcoming and supportive environment, or both.

The Gap in Policies and Programmes

Recommendations

1. A commitment to examine all relevant proposals (for programmes, policies, regulation and re-regulation, laws, initiatives etc) from the standpoint of self employed persons, micro enterprises and virtual enterprises, with a view to ensuring that any change is either inherently favourable to their success or contains exceptions or protections against and negative impacts.
   
   
2. A commitment to investigate and analyse the success characteristics of self employed persons, micro enterprises and virtual enterprises, together with conditions promoting success and barriers preventing it, with a view to introducing appropriate programmes, policies, regulation and re-regulation, laws, initiatives etc calculated to underpin success and dismantle barriers.

1. The European Commission should initiate, as a matter of urgency, a series of actions designed to increase understanding of the opportunities, needs and problems confronting self employed persons, micro enterprises and virtual enterprises in the transition to an Information Society, with a view to introducing in all economic, social and technology programmes and actions a critical analysis of how such activities will affect this sector.
   
   
2. The Commission should initiate discussions with the Parliament, the Council and other actors to promote early consensus on the urgency associated with improving success factors for self employed persons, micro enterprises and virtual enterprises in the transition to an Information Society, leading to early focus on this in the context of ongoing, imminent and strategic initiatives, including particularly the follow on from the Green Paper People First, the Commission's forthcoming Communication on Telework, planning for the Fifth Framework Programme and other strategic vehicles
   
   
3. There should be a particular focus on the identification and removal of barriers to the success of self employed persons, micro enterprises and virtual enterprises, especially in the area of legal, regulatory and fiscal barriers, at international as well as European and national levels;
   
   
4. Support to rapidly increase and underpin the effective use of existing and emergent Information Society technologies by self employed persons, micro enterprises and virtual enterprises, especially transnational networking to support telecooperation within and beyond the European boundary.

Roadmap: Detailed Requirements

Open Issues

The future basis of "Secure" employment

Its widely felt that conventional employment in well established corporate enterprises (including Government and other public services) is inherently more secure and stable for the individual than its alternatives, especially self employment and participation in virtual enterprises. Those who perceive this tend to also perceive self employment and other "atypical" work forms as inherently less desirable than conventional employment, and to see conventional employment as still the primary basis around which socio-economic planning and strategies should be built. While this can be questioned, its truth or otherwise is not a main consideration for this Provisional Guideline. Rather, the Guideline is based on the reasonable assumption that the newer work forms will continue to grow and that the needs of those who find themselves in these newer forms (whether from choice or necessity) should be considered on their merits, rather than assumed to be second best and only requiring an extension of the mechanisms most suited to conventional employment, trading and service-delivery enterprises. In the transition to an Information Society, its important to enable and empower wide experimentation, especially when that experimentation is bottom up, driven by entrepreneurs and innovators, as is the case with micro-enterprises and especially with virtual enterprises. The Guideline assumes that we are in an exploratory phase of the Information Society, during which the needs of innovators should be given precedence over the proposals based on assumptions rooted in existing and past experiences.

Pro-regulatory versus de-regulatory philosophies

These appear to be strong counter-currents in the present period of widespread change. Some countries of the Union have an existing culture of "one can do anything so long as its not illegal"; others have a culture of "presumed regulation" - "before doing anything, find out whether its permitted and how its regulated". Equally, in some industrial, economic and social domains the Union is actively pursuing de-regulation (for example the promotion of freedom of movement by removal of passport boundaries between countries within the Union, or the reduction of barriers to entry in the telecommunications markets), while in other ways we are seeking to extend regulation (for example in aspects of consumer protection). There advocates and opponents of "free markets" and of greater or lesser state involvement in markets and in society. This Guideline promotes the idea that industrial era regulation, legislation and fiscal policies designed for conventional enterprises place inappropriate burdens on self employed persons, micro enterprises and virtual enterprises, but this should not be assumed to reflect an innately de-regulatory stance. The Guideline is based on the view that these newer forms of working have very different needs, and that where regulation etc for this group is needed it should be considered ab initio, based on a thorough examination and understanding of the needs, rather than (as has been generally advocated during 1996) from the assumption that existing protections should be extended to cover atypical work forms.

Pace of development of self-actualisation

Individuals who choose self employment, the development of micro enterprises, or participation in virtual enterprises tend to be among the "self-actualisers" of our society and communities (definition and references to be supplied). Research (references to be supplied) suggests that the proportion of self-actualisers is growing across the developed economies, though the proportions differ quite significantly from country to country and culture to culture. Perceptions of the relative worth and potential of self employed persons, micro enterprises and virtual enterprises as contributors to future economic growth, employment and social cohesion are strongly affected by perceptions and expectations about what proportion of the total workforce can be expected to feel relatively comfortable in these new work modes. If we believe that self employment etc is fine for a small minority, but that the great mass of the population will always need the more structured environment of an employer, a manager and a pay-packet, then we will wish to pay less attention to the needs of the newer work modes and focus as much attention as possible on "creating" conventional jobs. Conversely, some people believe that a relatively high proportion of the workforce could become relatively comfortable in less structured modes of working, given that the economic, regulatory, legal and fiscal environment were to become more supportive of them, and that social attitudes gradually wore away from the perception that the ideal form of work is a "steady job". This Guideline is not based on either of these belief systems, since its assumption is that more research and experience is needed before any firm conclusions can be reached. The Guideline is based on an assumption that self employed persons, micro enterprises and virtual enterprises will continue to grow as an element of the economy and society and therefore need attention and nurturing, whatever the absolute limit might be at any time on the proportion of the workforce for which such modes are most appropriate.

"An" Information Society or many "Information Societies"?

Throughout this Guideline the phrases "the Information Society" and "and Information Society" are used. This is for convenience only. The use of the singular suggests to some people the concept of a coherent and homogeneous Information Society but this is of course very misleading. The meaning of an Information Society for a Professor of Modern Poetry at Oxbridge is very different from its meaning for a housebuilder on a Mediterranean island and different again for a full time politician in the European Parliament or the sous-Chef in a one star restaurant. The idea of "many information societies" that emerged at the People First colloquium (Dublin, October 1996) is in many ways more helpful to understanding, but is not yet in wide enough use to be appropriate as a phrase in the present iteration of the Guideline.

Attachments

State of the Art

Supporting References

GAT Chain - approach to development of Guidelines

Template 1 - http://www.eto.org.uk/gat/guides/templ1.htm

For a "bottom up" approach, staring from a discussion of the requirements and focusing in on a Guideline through comment and discussion;

Template 2 - http://www.eto.org.uk/gat/guides/templ1.htm

For a "top down" approach, staring from a draft Guideline and refining this through challenge and discussion, which will also elicit rationale and supporting materials.

General note on terminology

"telework"

Any activity where information and communications technologies (ICTs) are applied to affect the geography of work

"teletrade"

The use of online or networking methods to reach customers, whether for marketing, sales, delivery or support activities

"telecooperation"

The use of online or networking methods to enhance human communications, whether one-to-one, one-to-many or many-to-many