A NEW generation of entrepreneurs will lift the UK out of its devastating economic recession, according to a report out this morning by a leading educational society.
The proportion of surveyed twenty-somethings who want to start their own business rocketed from 17 per cent in 1998 to 29 per cent in 2010, the research shows.
Dubbing this new wave of aspirational young adults Generation Enterprise, the Royal Society for the encouragement of Arts, Manufactures and Commerce (RSA) says the “boom in business spirit” is partly due to technological advances.
“It will be their insight and entrepreneurial spirit which will finally lift us out of the dire economic crisis,” the RSA’s Adam Lent said.
“Over the coming years we will see younger generations produce new products and services that will generate a big leap in living standards.”
The proportion of people actively expecting to start their own business has also jumped, according to the National Centre for Social Research, which helped compile the data.
In 1998, just four per cent of 20-29 year olds planned to start a business in the 12 months after being asked the question. Yet by 2010, around seven per cent of respondents in their 20s said they would start a business in the coming year.
The expectation to start a business in the near future was highest among people living on their own, with one in 10 making such plans.
The figures only include people already in employment, or self-employment, the RSA said. Unsurprisingly, among respondents with a desire to have their own business, half were already self-employed.
A rising proportion of young people are already in the early stages of establishing their own business, the report also said, citing figures from the Royal Bank of Scotland.
A separate report, named the Global Entrepreneurship Monitor, shows a sharp spike in the proportion of 18-29 year olds who are becoming entrepreneurs – up from around five per cent in 2010, to over seven per cent in 2011.
Alice Barnard, chief executive of the Peter Jones Foundation, which runs the nationwide network of Peter Jones Enterprise Academies, said: “There has been a fantastic surge in the number of young people starting up their own businesses over the past year. This is in part due to the advance in technology, making it easier for people to run businesses remotely or from their home, with potentially very low start-up costs.
“However, enterprise education also plays a crucial part. Young people are increasingly turning to alternative forms of education, as the traditional system does not necessarily prepare them for the 21st-century workplace.
“Enterprise education teaches young people practical skills and offers real-life business experience, equipping them with the skills, confidence and ambition to start up on their own.”
The report admits that “economic uncertainty and job insecurity encourages people to think about self-employment”, but says the results are not solely due to the downturn.
Recessionary conditions – which lead to lower credit availability and consumer demand – damaged entrepreneurial drive after 2008 in the US, France and Germany, the report says. “although, interestingly, not in the UK”.