The missing link in youth employment – why we must invest in young entrepreneurs

8 June 2025, 12:17

Young people are desperate to start their own businesses, but barriers to education, funding and support are preventing them from contributing their full potential to the UK economy.

Nearly one million 16 to 24 year olds are not in education, employment, or training, according to the British Chambers of Commerce.

And with vacancies at a four-year low, young people are finding it increasingly difficult to enter employment and start their careers.

As the UK grapples with unemployment and productivity challenges, small business ownership offers an alternative for our next generation, and a potential boost for our economy.

Accounting for 60% of private sector jobs, and contributing £2.8 trillion in turnover, small businesses are disproportionately important to our collective prosperity.

We know that 58% of young people are interested in running their own business – but only 16% succeed in doing so.

This gap between ambition and reality is made clear in a joint report into young entrepreneurship by Simply Business and the Federation of Small Businesses.

At Simply Business we’re proud to insure more than half a million small businesses, and over the last 20 years have been championing their success.

From speaking to 2,000 people aged 18 to 34 across the UK, we understand the barriers that young people face – and how we can empower them to follow their business dreams.

Business ownership is a valid career choice

Being a business owner is a valid alternative to the traditional career path – but it isn’t spoken about enough.

We should be encouraging our young people to feel capable of making an impact on society and the economy by starting their own business.

Thousands of students are preparing to graduate from UK universities this summer, and an uncertain job market awaits them.

While many will browse job boards looking for vacancies that just aren’t there, the entrepreneurial among them will be thinking about how they can make money on their own.

It would be negligent to suggest that the road to self-employment is easy.

From managing finances and finding customers, to navigating the often complex world of tax – running a small business is hard.

Let’s be clear: the UK’s 5.5 million SMEs are operating in a landscape fraught with challenges. But with courage, innovation and aspiration in equal measure, business owners can achieve self-fulfilment. Going it alone creates flexibility, independence, and resilience.

And the skills entrepreneurship fosters will only set the next generation up for success, making our communities even richer.

But this message is struggling to reach young people during career conversations and in the classroom.

Research shows that only 35% of young people receive enterprise education in secondary schools in England, and even fewer girls have been given these tools.

There’s a growing need for traditional career paths to be redefined and we should be committed to opening young people’s eyes to the real possibility of being an entrepreneur.

Recognising this potential could be instrumental to the future of our economy, and a joined up effort from educators, businesses, policymakers, and local communities is essential.

Our education system should reflect the needs of today, teaching young people about entrepreneurship and giving them the knowledge and support to run a successful business.

Startup funding models aren’t fit for purpose

Funding is another barrier to many who wish to turn an idea into a business. While young people typically need £501 to £2,000 capital to get started, banks often have significant requirements even for smaller loans. 

If we are to encourage our young people to just go for it, our funding models should reflect the needs of small business ventures.

A broader look at society is imperative if we are to reduce regional disparities too.

A young person in London is nearly four times more likely to start a business than someone in the East Midlands.

We need to level the playing field.

Supporting young people’s entrepreneurial ambitions across the country will not only give them purpose but it will create a dynamic and resilient economy.

While many young people run a side hustle alongside other employment, there’s an ambition to grow beyond a hobby.

Research shows 17% of young business owners intend to hire staff within five years and 10% plan to engage in international sales – this could have a huge impact on the UK economy from an employment and global trade perspective.

Investing in the next generation

Ambition is a flame that should be fuelled. This enterprising mentality and drive to earn money on their own terms is inspiring and there is a part we can all play to create a system that encourages it.

We need to invest in the next generation and give them the support they need to put their creativity and innovation into real world business ventures. This is untapped potential in economic terms.

And a disservice to our young people if we don’t act now. Our economy, communities, and future prosperity will only feel the benefit.

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Julie Fisher is CEO of Simply Business UK.

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