Prisoners to entrepreneurs: Business holds the key to reducing re-offending

The Centre for Entrepreneurs explains the rationale behind turning prisoners into business owners...

Despite obvious differences, entrepreneurs and offenders share certain traits.

One is a willingness to disregard convention. Another is an appetite for risk. Indeed, it’s even possible to argue that prisoners are entrepreneurs born under different (i.e. the wrong) circumstances. Given this, maximising their entrepreneurial traits in the right way and with the right guidance could help them start successful businesses, in turn reducing re-offending rates.

That is the case we make in our latest report, “From Inmates to Entrepreneurs”, which reveals that turning prisoners into entrepreneurs could reduce the repeat offender rate from 46% to 14% nationally.

We acknowledge that reducing re-offending among ex-prisoners requires giving them the means to support themselves. Yet, although traditional employment has long been seen as the answer, ex-prisoners often struggle to find work because of employer-reluctance to hire those with criminal records.

Fortunately, unlike traditional employment, entrepreneurship does not directly discriminate against those with criminal records. What’s more, we believe that entrepreneurship programmes in prisons would benefit the economy and wider society, adding almost 11,000 businesses each year.

  • CFE believes the best way of turning motivated prisoners into entrepreneurs is through prison entrepreneurship programmes
  • A programme offered to all pre-release prisoners could save taxpayers up to £1.4bn annually by reducing reoffending
  • 70% of survey respondents said they had the skills to start their own business or to be self-employed

Personality traits

Importantly, there is strong appetite for prison entrepreneurship schemes among offenders. CFE conducted surveys in four prisons and found that 79% of prisoners were interested in starting a business (far higher than the national average) while 59% would be keen to take an entrepreneurship course in prison.

This appetite exists because many prisoners already possess entrepreneurial traits. Indeed, academic studies, as well as our own research, show that the personality traits of prisoners are in many ways akin to those of entrepreneurs.

For instance, Duane Jackson, a successful ex-prisoner entrepreneur who founded and sold a technology business for £20m, strongly believes that many prisoners are suited to entrepreneurship:

“Calculated risks, buying in volume and selling in smaller quantities at a higher price, dealing with competition, paying workers, strategic alliances. The list of parallels goes on and on.”

Indeed, recent studies show that prisoners and entrepreneurs score similarly on traits associated with entrepreneurship such as the need for self-achievement, aspiration for personal innovation, desire to plan for the future and desire for independence.

Support

We’ve shown that many prisoners are likely to make competent entrepreneurs. Yet, like other entrepreneurs, they need support.

Entrepreneurship comes with its own difficulties, including limited interaction with colleagues and unpredictability of income – particularly when starting out.

But ex-prisoners face additional challenges, such as accessing insurance and credit, and addressing issues such as welfare and debt. Clearly, support – including tailored mentoring, training, and access to finance – is required both in prison and post-release.

  • Over 80% of ex-prisoners surveyed said having a criminal record makes it harder to start a business
  • Almost 90% believe their criminal record makes obtaining business insurance harder or more costly
  • Over 60% wouldn’t know where to get support for their business

Michael Corrigan, an ex-offender who was convicted for “fraud by abuse of position of power”, received financial support from Andrew Dixon, a former banker and angel investor with an interest in ex-offender employment and self-employment opportunities. Once released, Corrigan and his business partner Steve Newell (a fellow inmate) were able to establish Prosper4; an umbrella entity comprised of social enterprises committed to helping ex-offenders find work and start businesses.

Ex-prisoners can certainly encounter problems when starting a business. Corrigan points to the importance of being prepared for the unexpected, as both him and Newell became gravely ill while setting up Prosper4: “You might think that having a business partner gives you insurance against sickness, but what if both of you fall ill? I always bring up illness now when preparing people to start a business.”

While being bedridden was “not ideal”, it taught both partners the importance of collaboration, something they had not previously emphasised: “We had to delegate more responsibility to other staff and partner with other organisations, both of which have become key features of Prosper4.”

Proven success

Where they do exist, prison entrepreneurship schemes have been highly successful, reporting recidivism rates that greatly outperform national statistics.

The most well-known of these, the “Texas Prison Entrepreneurship Program”, reports a three year recidivism rate of under 7% compared to a US national average of almost 60%. Likewise, “Startup” – a successful UK-based programme that helps female prisoners set up businesses – reports a reoffending rate among business owners of below 1%.

What’s more, these businesses are not only getting off the ground, they are surviving. An independent evaluation of The Prince’s Trust Enterprise Programme indicated a two year business survival rate of 78% among the ex-offenders it works with, far higher than the national average.

An additional benefit is that ex-prisoner entrepreneurs understand the challenges of finding work with a criminal record, and are therefore more likely than others to hire and help other ex-prisoners. For example, Gina Moffatt – who was convicted for importing drugs – now employs several ex-offender employees at her award-winning Blooming Scent Café in Tottenham, North London.

There is clearly a strong case for supporting ex-prisoners into entrepreneurship in the UK. Ensuring that those interested and capable of running a business get the support they need is a sure-proof way of reducing reoffending rates, saving taxpayer money and creating further employment opportunities.

Maximilian Yoshioka is lead researcher at the Centre for Entrepreneurs (CFE).

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