UK Set for Youth Business Boom Due to Disillusioned Job Market Entrants

National and Regional UK Business Boom by Young Entrepreneurs

The UK is standing on the brink of a youth business boom, according to a report by The Prince’s Trust. The report reveals that the UK could be on the brink of a youth business boom as 30 percent of young people between 16 and 30, believe they will be self-employed in the future. This is mainly due to a combination of disillusioned job market entrants and young people trying their hand at freelance working.

The research by The Prince’s Trust and The Royal Bank of Scotland Group also discovered that despite just 5% of young people in the UK being self-employed, more than 25 percent of unemployed young people would rather try to set up their own business than continue to job-seek in today’s competitive market.

• Official figures from the Office for National Statistics show the number of self-employed young people has already risen by 71,000 since the start of the economic crisis.
• 43 percent of young people have already made money from entrepreneurial activity such as selling a product they have made or working on a freelance basis, and more than half hope to do so in the future.
• Many young entrepreneurs believe in leveraging the internet to turn their ideas into commercial reality.

Martina Milburn, chief executive of The Prince’s Trust, said, “This research reveals an increasingly entrepreneurial mood among young people. Five years on from the start of the recession, youth unemployment remains high and many are seeing self-employment as a way to break the cycle of joblessness.”

“Setting up in business can be tough but at The Prince’s Trust we have a 30-year track record of helping disadvantaged young people succeed in work and self-employment, no matter what their background. It is critical we nurture young people’s passion for business and invest in the next generation.”

Professor Michael Hay, Professor of Management Practice in Strategy and Entrepreneurship at London Business School, said, “Traditionally Britain has lagged behind other countries in terms of the number of young entrepreneurs, but today’s report suggests that young people’s attitudes to self-employment are changing.”

“It is important that the next generation of young entrepreneurs get the support they need from organisations like The Prince’s Trust. In the current climate, helping young people to beat unemployment and set up businesses that employ other people can only be a good thing for the UK economy.”

Andrew Devenport, Chief Executive of The Prince’s Youth Business International (YBI), said, “Around the world too many young people still struggle to access the means to start a business, and we need to do more to understand how to unleash their potential. In September YBI will publish the first global study of young people’s attitudes, aspirations and activities in enterprise in partnership with the Global Entrepreneurship Monitor”.

While 42 percent of young people have considered setting up in business, many are being held back due to worries about funding or not having enough support. More than 69 percent of young people say that not having enough money would prevent them from setting up in business, while a 30 percent claim that having a mentor would make them more likely to consider self-employment.

Chris Sullivan, Chief Executive of RBS’s Corporate Banking Division said, “RBS has, for over a decade, actively supported efforts targeted towards young, unemployed people with a commercial idea, and the drive and ambition to start-up their own business.”

He continued, “It is of particular importance in these tough economic times, to provide support for some of the most disadvantaged young people in the country. Through our ongoing partnership with The Prince’s Trust we’ve seen first-hand the life-changing results.”

The research also shows how 44 percent of self-employed young people feel more confident about their business than this time last year, while 40 percent expect to see business improve in the near future.

Youth Business Boom in Newcastle

Newcastle is also experiencing a youth business boom, as the economic climate drives more young people to consider becoming their own boss. Almost 31 percent of young people in the region have already made money from entrepreneurial activities and many more hope to do so in the future.

Newcastle entrepreneur, Emma Reilly, is among those who have benefited from The Prince’s Trust. Emma enrolled on its Enterprise programme, a scheme supported by the European Regional Development Fund (ERDF) in Newcastle, for young people interested in self-employment. The course gave Emma an understanding of business, a £1,500 loan and help from a mentor to get her company, “The League of Pixels” [http://leagueofpixels.co.uk/], which specialises in the design and production of printed T-shirts, stationery and websites, off the ground.

Other regional entrepreneurs include Rachel McCabe, of Gateshead, who set up an online home delivery business with help from the Prince’s Trust, “Desserts On Wheels” [www.dessertsonwheels.com/?], after being made redundant from her job at South Tyneside Council.

Rachel said: “I originally studied criminology at Northumbria University, but was unable to find work in this area, then I became quite depressed after my job fell through. I just thought, ‘It’s now or never’ and I began researching how I could get funding for my new venture on the internet.”

She embarked on a four-day Prince’s Trust enterprise course in Sunderland where she got to grips with marketing, business models and bookkeeping.

She said: “I learned so much on the course. It was great and during the week I devised my business plan. Following the course I was invited to discuss it with the Prince’s Trust representatives. They loved my idea and said they’d never heard of it before. They were really intrigued with the products and said my location was strong. I felt on top of the world.”

Rachel received a £1,000 grant and £4,000 loan to set up her business unit in Gateshead.

Jonathan Townsend, Prince’s Trust North East regional director, said, “The research reveals an increasingly entrepreneurial mood among young people in Newcastle. Five years on from the start of the recession, youth unemployment remains high and many are seeing self-employment as a way to break the cycle of joblessness.”

You can download the full Start-up Generation report here (PDF).

UK Set for Youth Business Boom Summary

Unfortunately, more than half of young people say that not having enough money would prevent them from setting up in business, while a third claim that having a mentor would make them more likely to consider self-employment. We all know that setting up a business is tough going, but give a thought to the younger generation. It’s critical we nurture their passion for business and entrepreneurship. It’s all to easy to knock an idea. Don’t! Give your support and positive suggestions. May I suggest, if you cannot say something positive, say nothing at all.