Following the great economic crash of 2008, the landscape for employment in the developed economies has undergone some profound changes. Employment prospects young people are bleaker than ever before and are unlikely to improve for some time. But an option that increasing numbers of young adults are taking is entrepreneurship – setting up their own small enterprises.
Many universities are encouraging this move, with numerous university entrepreneurship clubs popping up across the length and breadth of the country. The National Consortium of Universities Entrepreneurs was set up in 2008 and now has over 70 different student enterprise societies under its auspices. The UK government has recently released figures showing that the number of graduates leaving university on a self-employment route has soared by 46 per cent over the last six years.
These figures are borne out by the recent findings of a major Insurance company (Hiscox), which reveal that 40 per cent of London undergraduates were setting up their own companies while still attending university; some were even already managing their own businesses. The Hiscox survey uncovered similar undergraduate interest in other parts of the country – 22 per cent of undergraduates in Cardiff, along with 32 per cent in Glasgow and 36 per cent in Hull. And it’s not just undergraduates: over half of the nation’s 14-19 year olds want to be their own boss, according to research released last month by Enterprise UK.
The recession may have closed the door on more traditional career paths for young people, but it has also appealed to their inventiveness and resourcefulness, encouraging them to carve out new pathways for themselves instead of relying on employment. Recessions, it would seem, close some doors but open others, and young people are doing a lot of opening currently. With 2.5 million new graduates unemployed and youth joblessness running at 20 per cent, many young people are reconsidering their options. Going to university and building up big debts is looking less attractive to many, especially as there is no certainty of a worthwhile job at the end of it; launching a new idea in the form of a small business is galvanising increasing numbers of them to take the entrepreneurial route forward instead.
A major advantage that most young people have over the preceding generation is their almost organic familiarity with the internet and with technology more generally. For instance, they really know how to use social media to great effect, and exploiting it for entrepreneurial purposes simply comes naturally to them. Advertising a new venture on your Facebook page can generate hundreds and hundreds of potential clients before the company has even been launched. A laptop and a resourceful, agile mind is what it takes to set up a new business today, and many, many young people have both.
One fast route into the world of self-employment is provided in the form of a good umbrella company. A graduate with first rate IT skills, for instance, can find placements in a range of different organisations through an umbrella company, working on a short-term contract basis and moving from firm to firm – accumulating a lot of valuable experience along the way. And the rewards are simplified – all tax and NIC calculations are processed by the umbrella company and deducted on a PAYE basis.
The global economy has taken a battering in the last few years in the aftermath of the colossal banking crisis; but a new generation of entrepreneurs may well start breathing new life and new resilience into it.
