Expansion and job creation strategies in different solo self-employment segments

Abstract The number of solo self-employed (those without employees) in Europe, and particularly the number of high-skilled solo self-employed (or independent professionals), has increased rapidly in the last two decades. Earlier research has found a low propensity among high-skilled solo self-employed to hire employees, even though many of them have growth ambitions. This low hiring propensity is worrying as it may hamper the number of newly created wage jobs in contemporary knowledge-based economies. The purpose of this paper is to shed light on the growth ambitions of different segments of solo self-employed by analyzing their varying expansion strategies. From estimating a multinomial logistic regression model on a large sample of solo self-employed workers, our main finding is that high-skilled solo self-employed with a proven track record (by operating solo for at least five years) do not plan to hire employees. Instead, insofar as they have expansion plans, they prefer to work together with other self-employed individuals in a network or outsource tasks to subcontractors. Our study highlights the crucial role of collaborative networks, particularly among high-skilled professionals operating solo. Joining such networks helps avoiding certain drawbacks of solo operations while also allowing to realize expansion ambitions by engaging in larger projects that are impossible to execute independently. An implication of our study is that high-skilled professionals need to consider collaborative networks already at the planning stage of their business operations.