Over the past thirty years, there has been a steady rise in welfare spending in the UK. However, the global financial crisis of 2008 and subsequent public spending cuts have left vulnerable people in the UK in a precarious position, with changes made to their welfare entitlements and uncertainty about whether, and how, these will continue.
It is in this climate that Dr Eva Kašperová, Research Fellow at the Centre for Research in Ethnic Minority Entrepreneurship (CREME) at Aston Business School, set out to explore the relationship between welfare support and entrepreneurial behaviour among disabled people.
It is an area that to date has been relatively unexplored, but which poses important questions and policy implications to enable individuals to achieve economic independence and self-actualization.
Prior research suggests that welfare support could act as a disincentive to entrepreneurs, who may fear the loss of regular benefits payments (known as the ‘benefits trap’). On the other hand, welfare states can be viewed as a social investment which enable disabled people, who face more barriers than most to enter the workforce, to do so in a way that works for them. Could solid welfare support enable more individuals to overcome the barriers to entrepreneurship?
During the webinar, Dr Kašperová shared the findings from her pilot study, where she interviewed seven disabled entrepreneurs about their businesses and how changes to welfare support have impacted them. During these interviews, participants made clear that changes to benefits such as Access to Work, Personal Independence Payment and Universal Credit were negatively impacting their ability to start and maintain a successful business.
Among Dr Kašperová’s key findings were:
- Disabled entrepreneurs are a highly diverse group and the level of support that individuals need varies considerably.
- Welfare initiatives provide vital support for entrepreneurs, such as topping up income, covering additional costs that disabled workers face and financing in-work support.
- Among interviewees, there was a perceived injustice surrounding changes to welfare support, which caused a reduction or interruption to the support they had previously received.
- Changes to welfare support had a significant impact on individuals’ businesses and their wellbeing, causing increased anxiety about sustaining income and in some cases leading to the closure of the business.
Despite the small sample size of this pilot study, the results strongly suggest that welfare support is vital for some entrepreneurs to build a sustainable business. Dr Kašperová also suggested that, in reducing the in-work disability support available, the government contradicts its objective to reduce the disabled employment gap. It would be useful for further research to explore the scale of the impact that welfare reforms have on disabled entrepreneurs and the complex relationship between disability, self-employment and welfare support.
The presentation was followed by a lively discussion led by James Brook, entrepreneur, leadership consultant and organizational psychologist. Brook began by noting that pressure on the government to further reduce public spending would likely increase during this difficult economic period. He also questioned whether the UK could learn from Scandinavian countries with progressive welfare systems, and to what extent the handling and communications of welfare reforms, rather than the reforms themselves, were to blame for the upset and difficulties they caused entrepreneurs.
Contributions from a highly engaged audience included questioning whether further support could be offered to disabled entrepreneurs beyond welfare, such as entrepreneurship training, and how young disabled people entering the welfare system could be equipped to manage its challenges.
To view the event recording, please follow this link.
CIMR acknowledges the support of the Regional Studies Association for this event, which forms part of the study ‘Addressing regional inequalities in innovation opportunities for BAME and disabled groups’. In turn this builds on an InnovateUK study, ‘Supporting Diversity and Inclusion in Innovation’ undertaken by the Innovation Caucus https://www.gov.uk/government/publications/supporting-diversity-and-inclusion-in-innovation-study