A report from The Entrepreneurs Network and Octopus Group finds 14-25 year olds are entrepreneurially ambitious, though fear of failure and lack of role models present significant barriers
- A survey of 1,549 young people found that 51% have thought about starting (or have already started) a business. A further 35% are open to the idea and just 15% rule it out altogether.
- The main barriers to starting a business were “not knowing where to start” (70%) and fear of failure (68%). Women (71%) were more likely to cite fear of failure as a barrier than men (63%).
- 57% of British people aged 14-25 cannot name an entrepreneur who inspires them.
- Of those who were able to name an entrepreneur, just 15% named a female entrepreneur.
- Alan Sugar and Richard Branson topped the list, while the most popular female entrepreneurs were Kylie Jenner and Grace Beverley (an Instagram influencer with a fashion line).
- The report finds that university education clearly influences entrepreneurial ambition: 65% of young people attending university have thought about starting (or have already started) a business, compared to just 53% of 18-25 year olds who didn’t go to university.
- A desire to “be your own boss” (86%) and the “freedom to do what I want” (84%) were the top motivations for 14-25 year olds who have thought about starting companies. Wanting to be famous was the least popular motivation (40%).
- Exposure to entrepreneurship is a key driver of entrepreneurial intention. 68% of young people who have a family member or friend who is a business owner say this has made them more likely to consider starting a business.
The report, Future Founders: Understanding the Next Generation of Entrepreneurs, has revealed that 51% of British young people aged 14-25 have thought about starting (or have already started) a business. A further third (35%) are open to the idea and just 15% rule it out altogether.
Though young people today show greater aspirations to become entrepreneurs than previous generations, this doesn’t always translate into the creation of new businesses. To support and nurture the next generation of entrepreneurs, policymakers need to grasp their motivations, ambitions and fears. The Entrepreneurs Network and Octopus Group commissioned ComRes to poll over 1,500 young people (aged 14-25) to better understand what they think about entrepreneurship and how different aspects of the education system affect entrepreneurial intentions.
Barriers to Entrepreneurship
The main barrier to starting a business was “not knowing where to start” (70%). Just two in five (38%) 14-25 year olds say that their education has given them the skills they need to start a business, compared to a quarter (26%) who say it has not. Half of respondents currently studying at university (51%) or currently studying business (55%) say that their education has given them the skills they need to start up – significantly more likely than non-university graduates, or those studying other subjects. However, this falls to 39% when students graduate, suggesting that some knowledge isn’t transferring from the classroom to the real world.
Women make up just a fifth of UK entrepreneurs, and the survey suggests a lack of role models could also present a significant barrier. 57% of young people could not name an entrepreneur who inspires them. Of those that could, 7.9% named Lord Sugar, 6.5% said Richard Branson, and 2.6% named Elon Musk. Kylie Jenner was the most commonly named female entrepreneur (just 1.1%). Further – half of young men could name an entrepreneur who inspires them, but only a third (35%) of women could do the same. Of the entrepreneurs who were named, 85% were male.
Past research shows that role models have a greater impact when they are relatable. Closing the gender gap and drawing on a wider range of entrepreneurial talent will require us to champion a more diverse range of entrepreneurs.
But we may also need to change attitudes towards failure if young women – and men – are to create the firms of the future. According to our report, 71% of women and 63% of men cite fear of failure as a barrier to starting up a business.
The findings of Future Founders will feed into the government review, led by The Prince’s Trust, examining how best to tackle the barriers facing the UK’s aspiring young entrepreneurs. We have raised a number of issues for policymakers to consider:
- Britain’s youth are more likely to be motivated by the desire to be independent or to work on something they are passionate about, than by a desire to get rich quick. This should inform the way educators talk about entrepreneurship. Teachers could, for example, discuss with pupils how entrepreneurship can be used to solve pressing social problems.
- Exposure to entrepreneurship is a key driver of entrepreneurial intention. 68% of young people who have a family member or friend who is a business owner say this has made them more likely to consider entrepreneurship as a career. Policymakers should therefore champion the work of organisations that aim to bring founders into schools, such as Founders4Schools, Girls in Charge Initiative, and Young Enterprise.
- In addition, creating a safe space for young people to experiment with starting a business might help build confidence and knowledge, while reducing the fear of failure.
- The government should champion schemes such as the Peter Jones Foundation’s Tycoon Enterprise Competition, where students are lent money to build businesses, but only have to pay it back if they breakeven, allowing them to try entrepreneurship in “a safe and controlled environment”.
Sam Dumitriu, Research Director at The Entrepreneurs Network and author of Future Founders, says:
“Over half of under 25s see entrepreneurship as a real option, but entrepreneurial intentions often don’t lead to the creation of real businesses. Understanding the motivations, intentions, and barriers faced by young people is vital to widening the pool of entrepreneurial talent. In particular, the polling highlights the potential for closing the gender gap in entrepreneurship by raising the profile of female founders as role models.”
Simon Rogerson, CEO and co-founder of Octopus Group, says:
“It’s in everyone’s interest to break down barriers to entrepreneurship. Entrepreneurs drive economic growth, create jobs and solve many of society’s problems – but to do this we need a diverse pool of talent and ideas. That’s why it’s critical to ensure that we give the next generation of innovators every opportunity to realise their ambitions.
“Starting a business is as much about your mindset as it is about the idea – and it can seem like a big leap of faith. That’s why it’s so important for young people to have access to mentors and relatable role models. They can make the impossible seem possible and help overcome that fear of failure.”
The report features a number of case studies of young people who have already set up inspiring, innovative businesses.
Ryan Robinson, Co-Founder, AEROPOWDER
AEROPOWDER is the startup behind the world’s first feather-based thermal packaging material. It started as a student project in 2015: “Studying to doctorate level gave me experience researching new ideas, making out future plans, and public speaking.” It has won the Mayor of London’s Low Carbon Entrepreneur Competition and gained access to the Climate-KC accelerator programme. “I like problem-solving and one chance, no second try situations. Failure happens, and I know I can bounce back stronger.”
Jack Cornes, Founder, HausBots
HausBots is behind the innovative free-climbing, wall-painting robot. Jack Cornes has always been entrepreneurial: at 8 he sold vegetables, at 14 he founded a successful online clothes retailer, and by 15 he was trading at markets and festivals up and down the country. At school, he met Vita Coco founder Giles Brook, who made him “more determined to become a successful entrepreneur”. HausBots has won F Factor (along with £10,000 funding) and secured pre-seed funding (£210,000) from the British Robotic Seed Fund. “I worry there is too much pressure on academia. I want to see more role models and entrepreneurs in schools showing what’s possible and presenting different career paths.”
Olga Kravchenko and Kaitlin Fritz, Co-Founders, Musemio
Kravchenko and Fritz founded virtual reality edtech startup Musemio because of their own personal experiences and goal of “democratising cultural education through technology”. Highlighting the importance of role models they state “as two non-traditional, immigrant founders starting a business in Britain, we are grateful for the female founders and community that have come before us.” They don’t see edtech as the most “glamorous” tech startup sector compared to the “more profitably robust fintech and healthtech”, but they derive huge satisfaction from solving a “pressing” problem in making the arts “more accessible – and fun” for children.
Yvonne Kemi, Founder, Hermain Hair
Hermain was founded in 2014 by Kemi, who was passionate about luxury unprocessed hair extensions and natural-looking wigs. “I love seeing the business grow, and understanding what works. I love planning ahead: right now I’m in a studio making wigs, but who’s to say I couldn’t be teaching a masterclass in the US in two years’ time?” But Kemi admits it isn’t always easy. “Yesterday I was in tears, because I’m getting sales, but not as many as I want. But I stay motivated and I don’t limit my mindset.”
Johnny McKenzie, Founder, Studio 246
“I started my business from my bedroom, and had to move the bed out,” says Studio 246 founder Johnny McKenzie. Beforehand, he had worked on building and construction sites. “The hardest part of running a business? Building the foundations. But in the next three years I see Studio 246 in a bigger warehouse, with different components involved in the music industry.”
Evelyn Okwabi, Founder, Kuxkouture
Fashion business Kuxkouture was founded last year by Evelyn Okwabi. “My interest in fashion started at a young age, but I didn’t realise it was a passion until I began secondary school, where I studied art and design”. Okwabi enjoys the flexibility of being an entrepreneur, as well as “being my own boss, networking, and meeting new creative minds.”
ComRes interviewed 1,549 British people aged 14-25 online between 19th and 28th June 2019. Data were not weighted. ComRes interviewed an additional 544 British people who have children aged 18 or under online between 1st and 3rd of July. Data were weighted to be representative by age, gender, region and social grade.
For journalists in their professional capacity only. Issued by Octopus Group August 2019.