Bob Bennett 

It is often assumed that industrial Britain, with its large factories and mines employing thousands of people, left little space for individuals running their own businesses. But not everyone was employed as a worker for others. Some exercised a level of agency operating on their own as business proprietors, even if they were also often very constrained.

Over most of the second half of the 19th century as industrialisation accelerated, the self-employed remained a significant proportion of the population – about 15 percent of the total economically active. It was only in the mid-20th century that the proportion plummeted to around eight percent.  

It is important to understand self-employment numbers in order to interpret the dynamics of many business sectors, and also to understand how different people responded to the changing demands and opportunities of a rapidly industrialising economy. The censuses from 1851 up to the present allow us to investigate these questions. 

Self-employed butcher Mr Carson [centre] with his employees in white aprons, and family.

Self-employed people are those who operate their own enterprises. They can be doing this alone (with only their own labour), in partnership with others, or as directors of a company. If using a company format, this can be with listed shares, or as a private company with shares owned by a few people. All these types of self-employed people can be employers of other people, though many employ no-one except themselves. 

The majority of the self-employed are single-person operations, but partnerships are also numerous. There were very small numbers of companies until the general law of incorporation was widened in 1856 and 1861, after which numbers grew rapidly. They grew even more rapidly in number after sole-person limited companies were permitted in July 1992.  

The 19th century has been called the ‘age of entrepreneurship’ as it had the highest number of self-employed people as a proportion of the economically active for the whole period from 1851 up to the 2020s.  

Source: BBCE and census reports. The Age of Entrepreneurship Fig 4.9.

Not all self-employed people ran small enterprises. Single-person businesses were the most numerous, and they formed the bulk of the smallest business; over 60 percent. The 19th century census refers to these as operating ‘on own account’. However, many sole traders employed others, and a few were operating some of the largest business in the past, especially in construction, shipping and manufactures.

Henry Lovatt, a sole-trader builder in Wolverhampton, was the sixth largest construction business of the 1880s, recorded in the 1881 as ‘employing 1,000 to 4,000 according to circumstances’. Lovatt’s projects included building London’s Limehouse Dock, many factories, and many railways. Thomas Andrew Walker, the second largest construction business of the 1880s, had 8,000 employees. He was builder of the Metropolitan Railway, Swansea Docks, the Severn Tunnel and more, and acted as a sole proprietor for years after his brother and partner died. 

Construction of the Metropolitan Railway close to King’s Cross station in 1861.

Partnerships were often small with no personnel beyond the partners, but some became major businesses employing thousands of other people, as in banking, some manufactures, and in modern times in law and accountancy. Companies were often established from the outset to be large businesses, by giving access to large capital resources through share issues or other forms of finance. In modern times, companies are the most numerous of the largest employers. 

Why did people become self-employed? 

It is entertaining to think of all self-employed people setting up their businesses to become the next Thomas Edison or Henry Ford. This fits the model of the ‘entrepreneur’ looking to make a fortune. To achieve this they needed a good idea, technical means to implement it, access to capital and marketing, and usually a lot of luck. These are the innovators and entrepreneurs popularised in the media and many modern business schools. In the 19th century, it was a prospect held out by writers like Samuel Smiles, whose first book on Self-Help (1859) became a best seller. He argued anyone could ‘elevate themselves to business success through hard work, determination and temperance’.  

But few setting out on self-employment in the past had such a motivation. We have virtually no records of their life-stories; Payne called them the ‘regiments of the anonymous’. However, from those records we do have, it is clear that most started out of necessity, and many were unemployed and had few other options.  

The move into self-employment was often more frequent if the family or community already had high levels of self-employment. This might be from a freeholder farm where the family knew how to make their way in markets, especially where younger children had to break away because the farm or capital went to the eldest son. However, many self-employed people found their way into business as assistants to their parents, working their way up to partnership, and eventually inheriting the business. This was common for many retailers and craftsmen as well as farmers.  

Self-employment was also more common in some migrating communities, like Italians, people coming to the UK from Britain’s colonies, and for many Jews escaping East European pogroms. In comparison, most Irish people who migrated into England in the 19th century went into labouring or other worker roles. 

Self-employment of migrants. Note the data available differ before and after 1891, and 1871 is not given. Source BBCE and Smith et al (2020).

Local opportunity was also an important factor. The 19th century saw many places suddenly opened up to new jobs and scope for businesses by the railways, or new and expanding ports – just as the canals and turnpikes had done in earlier decades. Common business start-ups linked to new railways were carriers, hotels and lodgings, retailing, and new farming opportunities, especially in milk and meat production. 

Self-employed carters with loads at Liverpool Landing Stage.

Self-employment as part of a portfolio 

Running your own business was not always an ‘either or’; it could be something ‘on the side’ whilst employed in a job. It could also be part of a wider portfolio of several smaller businesses, shared between family members, or between spouses as ‘co-preneurs’. This made it easier to get started, explore options, build experience, and lower risks, especially if it could done from home. It might be how parents secured succession for their business or tried to keep errant children motivated.

The census was not good at picking up complex portfolios since it focused on ‘main’ or ‘regular’ employment. But for those in business it did ask for secondary activities, showing that around 10 percent of the self-employed had multiple businesses in the 19th century.  

There were also some estate owners and those with landed wealth who diversified from sitting in passive estates to building businesses. Most frequent were building and land developments in the cities, minerals exploitation from their land, transport investments, and projects overseas. 

Did women’s and men’s self-employment differ? 

The traditional roles of men and women influenced their self-employment. For men, 19th century self-employment was highest in farming, craft trades where makers also sold (such as shoes, clothes, furniture), construction, food shops, and the professions such as doctors and lawyers.  

Many self-employed women operated from home, most commonly as dressmakers, tailors, shirtmakers, and laundresses. Some of these were contracted by larger firms, but many operated as sole-proprietor businesses or in partnerships of groups of women. Others ran inns, lodging houses or shops. Increasing numbers were school proprietors. A few women had firms employing others in small manufactures and retail, and a very few were proprietors of large factories.  

Richard Redgrave, ‘Song of the Shirt’, c.1845. V&A collections E.49-1889.

Women were constrained by responsibilities in the home and family, and faced barriers to entering the labour market. This tended to depress their access to many sectors of waged work. In contrast, self-employment could often be fitted with other responsibilities. Some found being tied to children was compatible with running their home business.

Hence, although the 19th century saw an all-time peak in all self-employment, in many ways it was particularly the ‘age for women’s businesses’. They operated 40 percent of own account businesses, and 30 percent of all businesses, far higher than their waged employment levels. This was particularly high for married women. Notably, over a quarter of their businesses were as employers.  

An extraordinary change occurred after 1901-11, when women’s self-employment dropped very rapidly. This resulted from various factors, but mostly derived from the rapid expansion of women’s access to waged employment. From the 1970s this decline reversed, and women’s self-employment has slowly increased. The main driver of this change was an increase in women as employers. This now equals or exceeds their numbers as own account self-employed.

However, even in the 21st century women have still achieved only half of the rate of self-employment they had over 1861-91. Though of course then, as now, the records for women’s activities are often unreliable, so we have to treat all generalisations with care.  

Calculated from BBCE data.

Why does the level of self-employment matter? 

The self-employed are decision makers, who draw together resources to produce goods or services. To succeed they must see and manage opportunities, meet or anticipate demand, and organise supply. They are the assemblers, who then market their outputs. There are controversies about the relative merits and balance between sole proprietors, small firms, and large firms, but without the self-employed there would be no private sector economic activity.   

The self-employed meet our market needs; they are significant sources of innovation and new products and services; they underpin economic growth and national income. Being self-employed offers opportunities for personal independence and initiative; it offers alternatives to waged employment and unemployment; for some it is a path towards self-fulfilment; for a very few it is a path to riches. Some argue that without the ‘heterogeneity and volatility’ provided by the self-employed and their predominantly small firms ‘the economy would eventually stagnate or even collapse’: what Schumpeter called their force of ‘creative destruction’.  

Further reading 

Open access:

• The British Business Census of Entrepreneurs maps self-employed women and men as own account and employers 1851-1911 and gives access to the full data by area. https://www.bbce.uk/
• Bennett, R. J., Montebruno, P., van Lieshout, C., and Smith, H., ‘Business entry and exit: Career changes of proprietors in England and Wales 1851-81 using record-linkage’. Social Science History (2022). https://www.doi.org/10.1017/ssh.2021.48 
• van Lieshout C., Bennett, R. J., Smith, H. J., ‘Beyond the Elite: Corporate Directors and Their Networks in Britain, ca. 1880s–1910s’. Enterprise & Society (2024). doi:10.1017/eso.2024.24 
• van Lieshout, C., Smith, H., Montebruno, P., and Bennett, R. J., ‘Female Entrepreneurship: Business, Marriage and Motherhood in England and Wales, 1851-1911′. Social History 44:4 (2019). http://doi.org/10.1080/03071022.2019.1656929 

Paywall: 

• Bennett, R. J., Smith, H., van Lieshout, C., Montebruno, P., Newton, G., The Age of Entrepreneurship: Business proprietors, self-employment and corporations since 1851 (Routledge, 2019). https://doi.org/10.4324/9781315160375 
• Payne, P. L., British Entrepreneurship in the Nineteenth Century, second edition (London: Macmillan, 1988).  
• Smith, H., Bennett, R. J., and van Lieshout, C., ‘Immigrant Business Proprietors in England and Wales (1851-1911)’. Continuity and Change 34:2 (2019), 253-76. https://doi:10.1017/S0268416019000171 
•  Smith, H., Bennett, R.J., van Lieshout, C., and Montebruno, P., ‘Households and entrepreneurship in England and Wales, 1851–1911’. The History of the Family (2020). https://doi.org/10.1080/1081602X.2020.1796750 
•  Samuel, R., Village Life and Labour (London, 1975).  

Tags: economic history, entrepreneurs, industrial revolution, self-employment, women's employment, women's work, work

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