UK youth want to be entrepreneurs

The largest annual survey of entrepreneurial activity in the United Kingdom shows more people between 18 and 24 expect to be running their own business over the next three years than any other age group.

London Business School’s 2005 Global Entrepreneurship Monitor United Kingdom (GEM UK), surveyed 32 500 adults across the nation in 2005 on their perceptions about entrepreneurship and whether they were engaged in any such activity. It is the single largest study of entrepreneurial activity anywhere in the world.

As well as expecting to be their own boss within three years (13.4% for 18-24 age group compared to 9.3% for 35-44 age group), GEM UK found 18-24 year olds were the most positive in their attitudes towards entrepreneurs, with 69.7% regarding it as a good career choice. Entrepreneurs were also given the highest status among the young.

For the first time GEM UK examined the impact of enterprise training on levels of entrepreneurial activity – one of the pillars of UK government policy regarding the fostering of a more entrepreneurial society. In most cases, across age and gender groups, enterprise training more than doubles the likelihood of setting up a business.

For example, women who have undergone some enterprise training are twice as likely to be engaged in an entrepreneurial activity (6.9 % compared to 3.3%). In 2005, 6.2 % of the UK adult working population was involved in some form of entrepreneurial activity. This level is the third highest rate of the G7 economies behind the US (12.4%) and Canada (9.3%).

The gap between the US and UK has widened slightly in the past 12 months, due largely to an increase in activity in the US. Levels of total entrepreneurial activity (TEA) for the UK remained very similar to the 2004 level of 6.3 %. Male TEA has gone down slightly, from 8.5% of the UK population to 8.2%, while female entrepreneurship levels have remained the same at 3.9%. A fear of failure has increased slightly from 33% of the total population to 34%.

Across the country, 2005 saw the regional gap in TEA widening slightly, due largely to an increase in entrepreneurial activity in London (up from 7.5% to 8.3%) and a reduction in the North-East (from 4.5% to 3.8%). Rural areas have higher levels of entrepreneurship than urban ones (8.2% and 6% respectively). Ethnic minority groups are, as in previous years, much more entrepreneurial than their white counterparts. Non-White ethnic minority groups are 40% more likely to be entrepreneurs than white people.

The most entrepreneurial group is Black Africans who are more than three times more likely to be entrepreneurs than their White British counterparts. Indian and Pakistani people are twice as likely as white British people to be entrepreneurs.

Rebecca Harding, GEM Global chief executive, London Business School, said a cultural change is evident in the UK. "Since 2002, there does appear to be a step change in attitudes towards entrepreneurship especially among the young. Fear of failure, however, remains a challenge since, over the period as a whole, there has been little change in this attitudinal indicator. If the Government is to close the gap between the UK and the USA in entrepreneurial activity, then this is a key feature which should be addressed with some urgency."