Self employment grows in recession-hit Spain

12 February, 2013

Spain is suffering from a severe joblessness due to a severe economic slowdown. Today, Spain's unemployment rate stands at more than 26 per cent. The increasing rate of joblessness has, however, forced people to start their own ventures like cafes and boutiques etc.

However, due to the non-availability of financial assistance from the government, entrepreneurs are finding it very difficult to survive and most of them are not able to continue their ventures for more than three years.

Ana Lui, a resident of Valladolid in Spain was health and safety consultant till two years back when crisis hit and she lost her regular job. She didn't get discouraged and after much thinking decided to open a clothing store. Opened barely four months ago with an investment of 30,000 euros ($40,000), today she is enjoying her job, which is totally different from the earlier profession. The investment came from her savings and other unemployment benefits.

“I had the choice of either staying at home bored, risking depression or deciding that I have to move ahead. I decided to move ahead,” Luis told AFP. The crisis sparked by the collapse of Spain's building boom had wiped out a lot of self-employed entrepreneurs: 625,000 between 2008 and 2011, says Lorenzo Amor, president of the small entrepreneurs' association ATA.

“The only sector which created jobs in Spain in last year was self employment sector. But unfortunately 50 % of it could not continue beyond three years,” said Lorenzo Amor, president of the small entrepreneurs' association ATA.

During the year 2012 the unemployment rate went too high and with this the rate of self-employment increased by fifty-three thousand as per the registration records of the government. These entrepreneurs created 72,000 jobs.

Among its various emergency reforms to encourage self employment, the conservative government is working on a law to cut the red tape for people launching their own businesses.