A little on the side gets popular as economic insecurity bites

Economic uncertainty has seen a sharp spike in businesses started on the side, with part-time enterprise numbers hitting a decade-long high and full-time ventures taking a dip, according to a new report.

The Bankwest Business Trends Report revealed that the number of part-time business owners has increased by 19.1% over the last five years and by 27% over the past 10 years.

By contrast, people running their own business full-time dipped by 5.3% in the last 12 months across Australia.

Alan Langford, chief economist at Bankwest, says people are taking on part-time jobs as a supplement to their existing jobs due to the bad economy.

“It really comes down to the euro debt crises we’re seeing at the moment. People are cautious and yet have a mixed attitude about the future,” he says.

He also attributes the rise to increasingly flexible work practices and the advancement of technology, which makes business much easier to create and maintain.

Ian Corfield, business chief executive of Bankwest, said the rise might have come from people seeking security in being employed rather than being the employer, even if it is just part-time.

The Bankwest report also states that people are staying longer in the workforce, with the number of business owners over the age of 65 rising by 50.5% over the past decade.

“There is a trend for people to stay in the workforce for longer, as the older generations are more reluctant to give up work altogether due to continuous economic uncertainty and other lifestyle factors,” says Corfield.

The number of part-time business owners in the 15-19 age group has increased steadily, with 23% more young part-time owners compared to five years ago.

The majority of part-time owners work in education, repair and maintenance industries, and as nannies and caretakers.

Corfield says TV programs promoting young successful entrepreneurs are motivating younger people to start-up.

The report also notes that gender differences are narrowing with male business owners falling by 3.8% to 12.7% of all male workers and women workers increasing 12.8% to 8.5% of all women workers, over a 10-year period.

The strongest growth comes from women running their own businesses, as reported last year, although there are still more men who own their own business than women.

Female-dominated industries include administrative and support service industry, health care, social services and education.

All sectors experienced significant growth, with education and training soaring by 97.9%.

The mining industry has the strongest growth in people running their own business, with an 83.3% increase.

The largest drop was manufacturing, which fell by 18.1%, a reflection of the strong Australian dollar and the oft-mentioned two-speed economy.

The number of small businesses in electricity, gas, water and waste service industries has surged by 308.3% over the last 10 years, fuelled by the mining boom.

This article first appeared on StartupSmart.