Falling number of self-employed

March 2023: about 146.000 discontinued activities, more than the last two years combined

How many self-employed workers in RC: 2014 to 2022

A self-employed worker is defined as a self-employed person who carries out his activity alone, without the help of collaborators or other craftsmen, and undertakes to perform a work or a service, managing it at his own risk and without being subordinate to the person who entrusted him with the work. This category includes entrepreneurs, craftsmen, freelancers, cooperative members, commercial agents and representatives and all those who organise and perform their work independently. In the Czech Republic, self-employed entrepreneurs have always had a great influence on the economy and the data show that the trend has always been positive, showing continuous and constant growth in the number of self-employed workers from year to year. As of 30 June 2022, the data indeed seems to confirm the continuous increase showing the highest number of self-employed workers since 2014, about 1,100,038 as shown in the table below. However, taking the whole year into consideration, a decrease can be seen, thus showing that there is a decrease of entrepreneurs in the Czech Republic after a long time.

The table below shows the trend in the number of self-employed workers from the year 2014 to the year 2022.

How the number of self-employed workers has changed

Towards the end of last year, there was a drop in the number of self-employed workers. In fact, although 77,016 people started a new business, there were 78,357 who decided to close it, 36,000 more than in 2021. Despite the fact that the increase in the number of closed businesses had already started in September (4.5 thousand), the month that most affected workers was December, when 16,715 entrepreneurs decided to liquidate their businesses, i.e. four times more than in the same month in 2021, and taking into account also new workers, i.e. those who opened a business instead, self-employed workers in the Czech Republic in December decreased by 12 thousand. The reduction of entrepreneurs occurred especially in the trade sector, but also in the catering, hospitality, production and distribution of electricity, gas and heat, and real estate sectors. In this respect, the number of women who decided to leave their business grew by 120% year-on-year compared to 69% for men, and in addition, while previously women entrepreneurs increased more in number than men, in 2022 the growth was the same. In 2023 the situation got even worse, in fact, as of mid-March, there were about 146,000 business closures by entrepreneurs, which is almost double the number of the previous year and more than the last two years combined.

What is the cause of the decrease

Experts believe that one of the possible reasons for the sudden increase in terminated activities in the Czech Republic is the new obligation for self-employed persons to use certified e-mail to communicate with public offices. The so-called ‘data box’ in fact allows letters to be sent electronically to Czech authorities, making communication more efficient, faster, reliable and free of charge, limiting the sending of physical paper documents as much as possible. Nevertheless, to use the data box, one needs a computer or smartphone, making the process more complicated for all those who are not familiar with electronic devices or for older people. The data show that it is in fact mainly the latter, i.e. self-employed older people, who decide to cease their activity and thus renounce the živnostenský list, and many of them had often already suspended their permit to practice. Consequently, it is necessary to consider and dwell on this aspect in order to have a more correct general idea about the sudden decrease in the number of self-employed persons.

Sources: https://www.idnes.cz/; https://www.ceskenoviny.cz/;https://www.businessinfo.cz/

sources of images: https://pixabay.com/

graphic source: https://storyset.com/