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Contractors underpin resilient economies, reveals EFIP report on I-Pros

Contractors, or independent professionals (I-Pros), underpin economic resilience in the European Union countries with the largest populations of flexible workers. And the flexible workforce continues to grow throughout the EU, despite employment numbers falling or stagnating.

Commissioned by the European Forum of Independent Professionals (EFIP) and PCG, European I-Pros: A Study by freelance economist Stéphane Rapelli shows that the number of contractors and freelancers across the EU has increased by 82.1% since 2000, reaching 8.56m in 2011.

“The fact that there is growth in freelancing despite tough economic conditions is encouraging for both the sector and for the European economy as a whole,” notes MEP Anthea McIntyre, who is hosting a launch of the report at the European Parliament.

“The report not only provides evidence of growth, it also presents policy makers with crucial insight into the makeup of the sector.”

Contractors deliver economic resilience

According to PCG, those nations that experienced the most growth in contracting and freelancing are “also those generally accepted to be dealing better with the economic crisis”.

Germany (+16%), France (+36%), Poland (+24%) and the UK (+25%) showed the largest increase in I-Pros, while in contrast, numbers in Spain (-9%) and Italy (-1%) decreased over the same time period.

Having access to freelancers in an economy provides flexibility, value and minimises risk to businesses

John Brazier, PCG

“Having access to freelancers in an economy provides flexibility, value and minimises risk to businesses,” explains EFIP president and PCG managing director John Brazier. “This is important when times are good; but when times are bad, these factors become the difference between success and failure.

“[The] report proves that freelancing is not only on the increase as a mode of working, it is [also] serving a valuable purpose in economies across the continent,” he adds.

UK contracting sector second largest in EU

The report’s author Rapelli defines I-Pros as:

Independent workers without employees engaging in a service activity and/or intellectual service not in the farming, craft or retail sectors.

Out of a working population across the EU of 216.6m, Rapelli estimates that there are 8.56m I-Pros meeting this definition, representing 4% of the working population. There are a further 23.2m self-employed workers, which includes those in the farming, craft and retail sectors.

Italy has the greatest number of I-Pros, with 1.689m in 2011. This has fallen from 1.7m in 2008. The UK is in close second place with 1.625m I-Pros. Germany and France are in third and fourth places, with 1.53m and 743, 210 I-Pros respectively.

Spain lies in fifth place and, like Italy, has experienced falling I-Pro numbers. There are now 9% fewer I-Pros in Spain: 553,490 in 2011 compared to 608,780 in 2008. Poland, the Czech Republic, Greece, Belgium and Sweden have all seen double digit growth between 2008 and 2011.

Professional, scientific and technical sectors dominate the EU I-Pro scene

Just over 30% of all I-Pros in the EU undertake professional, scientific and technical activities, the single largest sector. This includes regulated professions, such as engineering contractors and construction professionals, but excludes many IT contractors, as the report includes a separate classification for information and communication.

In second place are the human health and social work sectors, with ‘other service activities’ in third place, and information and communication in fourth.

However, Rapelli notes that variations in each EU member state’s data-gathering processes mean that there are inconsistencies in classification. For example, he highlights that ‘other service activities’ includes computer and communication equipment repair, and that in France computer maintenance is classified as a craft activity.

Over half of European I-Pros have a ‘high’ skill level

When analysing the level of skills and training of Europe’s I-Pro community, Rapelli applies an index created by UNESCO – the international standard classification of education (ISCED). This categorises I-Pros into low, medium and high levels. High refers to a level of training equivalent to a higher education qualification.

Over half, or 53%, of European I-Pros fall into the high category, and this increases significantly in certain sectors:

  • Professional, scientific and technical: 69.3% classified as high
  • Health and social work: 71.7% classified as high
  • Education: 62.35% classified as high.

According to Rapelli “this configuration seems natural, because engaging in an activity in these sectors requires university level training, which is generally laid down by law for regulated activities [such as] law and medicine.”

Information and communication, the category that includes many IT contractors, is in fourth place after education.

Unfortunately, the report does not include data that allows the comparison of the skill levels between different member states.

I-Pros are poorly understood because of poor data gathering

Rapelli claims in his conclusion that his report is the “first ever to be carried out concerning European I-Pros”. However, he acknowledges that there are still knowledge gaps due to three key factors:

  • It is difficult to capture data about self-employed workers, so there are often gaps
  • National statistics-gathering organisations mainly focus on employed workers
  • The multiple legal entities that I-Pros can trade via lead to classification problems.

Rapelli’s view is that this report is a baseline from which further research can be conducted. And despite the missing data, it is clear that the European I-Pro community is a fast-growing and dynamic sector of the economy.

“This work represents a first approach, which has a measuring value” he notes. “It begs to be extended in order to identify and measure the factors governing the remarkable trends which have been observed.

“Through this first descriptive study, the PCG is shedding light on a whole field of multidisciplinary scientific research, and opening up the way for reflecting on economic policy and employment.”

Published: Thursday, 18 October 2012

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