If no jobs are available, young people are going to create their own by becoming entrepreneurs. Lucky then, says Will Bentinck, that organisations like StartUp Loans, Entrepreneur First and Enternships.com are helping
IT IS EASIER now to start a business than it ever has been. Finding and securing employment, however, gets ever more difficult. The world of work is changing faster and faster; and the next generation, Generation Y, will need to learn agility, resilience and creativity to survive in that accelerating flux. An entrepreneurial attitude will become more useful than the repetition of specialism that led the industrial age.
At the UN’s Youth Employment Forum in May, more than a hundred young people from around the world, brought together by the International Labour Organisation, discussed solutions to the international youth employment crises. Our conclusions, after three days of deliberation, included a strong emphasis on encouraging youth-led enterprise: not only addressing the high levels of unemployment, but also developing a more empowered workforce.
This recommendation comes at a time when more young people, especially in the UK, are considering starting their own business as an alternative to more traditional routes in to employment. In response to demand, but also to HM Government’s call for an enterprise-led recovery, there has been a surge in the number of organisations offering support to budding entrepreneurs, whether finance, education, consultancy or more.
A week after the Youth Employment Forum, the launch of StartUp Loans, offering £82.5m of small loans to 18-24 year olds, marked a great stride forward for youth enterprise. The launch coincided with Lord Young’s report Make Business Your Business, the first report on start-ups and SMEs since the Bolton Report on Small Firms of 1971. Lord Young finds a dramatic increase in the number of small businesses, with SME employment rising from 31 per cent of the market to 60 per cent. SMEs now make up 99.9 per cent of all businesses in the UK and 95.4 per cent are micro-businesses, employing fewer than ten people.
Lord Young identifies the Internet as a contributing factor to this increase, but that the trend actually started in the 1980s. Today, it is the ease and low cost with which a business can be started: you don’t need much more than a smartphone to sell, organise, market and develop a new idea; especially with the ubiquity and growing adoption of social media and the reach and speed the Internet has given to local and international trade. That’s before you realise how much support there now is for people wanting to start or grow their business: it’s clear that it has never been easier to venture a little capital in enterprise.
STARTUP LOANS WAS launched by StartUp Britain, a campaign ‘by entrepreneurs for entrepreneurs’ to promote and support entrepreneurship. Launched by the Prime Minister last year, but funded entirely by private sector sponsors, the campaign was founded by eight British entrepreneurs, is a celebration of the benefits of enterprise to the economy, a national campaign with local reach, a representative voice of small business to government and a powerful support network, showcasing the vast and growing array of offers, services and products available to budding entrepreneurs.
Beyond the StartUp Loans, recent changes to tax incentives for investors are good news for young ventures. The Seed Enterprise Investment Scheme (SEIS) was started this year, offering 50 per cent tax relief on up to £100,000 invested in small, young companies, with a potential further 28 per cent from an exemption of capital gains tax.
As the Chancellor makes it easier to nurture a young business, start-up accelerators and entrepreneurial education programmes nurture ideas and people. Springboard, Oxygen, Ignite 100 and Telefónica’s Wayra programme are some of the growing number of start-up accelerators in the UK. Unlike other forms of investment or business incubation, accelerators concentrate on cohorts of small-team start-ups, rather than individual founders or companies; they provide pre-seed funding, intensive mentoring, a set programme of events and usually house all the start-ups in the same building. UK accelerators are predominantly based on the American model, pioneered by Y Combinator and TechStars, who have accelerated organisations such as Reddit, Airbnb, Dropbox and games producer OMGPOP.
Organisations like Entrepreneur First and the New Entrepreneurs Foundation (NEF) concentrate on incubating talent rather than ideas. Entrepreneur First is the enterprise equivalent of Teach First, selecting the most enterprising recent graduates and giving them two years of support to start and grow their own business. Their approach is to build several incredible small teams out of each year’s cohort, taking Steve Blank’s advice that the right team is more important than the right idea. Operating as a non-profit, however, they take no stake in any of the businesses started through their programme.
NEF take a different approach, putting young people right in to year-long placements with some of the UK’s leading entrepreneurs. The hands-on experience of working in a start-up or with a serial entrepreneur is in high demand and there is strong competition for places. Not only is this kind of experience a valuable education, the high frequency of hires from internships that occurs in large corporates is now becoming an accepted route in to employment in smaller companies and start-ups.
THAT’S THE AIM of Enternships.com (founded by Rajeeb Dey, a co-founder of StartUp Britain and where I now work), which connects enterprising young people to internships in start-ups and small businesses. While young people get the opportunity to learn how to start and grow a business, the start-ups, who usually have little to no budget for or experience of recruitment, get a relatively risk-free method of accessing UK graduate talent, creating jobs in the process. Enternships has recently partnered with Santander to connect students from Santander’s university partners to more than 500 internships within the bank’s SME clients.
Aspiring entrepreneurs can apply for support from Entrepreneur First, do a placement with NEF or find internships on Enternships.com, but it is becoming increasingly important that every young person learns to be more entrepreneurial. While government and industry are encouraging the creation of new business, existing small businesses and educational institutes should be encouraging a more entrepreneurial approach to job seeking in an unprecedented employment market.
The worlds of work and business are changing at an increasing rate and Generation Y is already pioneering new ways to start and develop a career, both as employee and employer. This acceleration of change means that agility, resilience, creativity and the ability to quickly learn new skills will become essential to a young person’s career survival. These entrepreneurial qualities are vital for a generation that has been predicted to have an average of ten career changes in their lifetime; a generation that thrives on change.
The Gazelle Group calls for a T-shaped person: depth of knowledge with a breadth of creativity. Gazelle is a group of further education colleges committed to bringing creativity back in to the classroom, in response to Sir Ken Robinson’s 2006 and 2010 TED talks damming the existing education system for suppressing it. They believe “it is vital to foster a new generation of social and commercial entrepreneurs; entrepreneurs who can add value to communities, bring innovation to existing businesses and who can create their own employment with confidence and ambition.”
Bill Drayton, founder of Ashoka, a fellowship of over 3,000 of the world’s most innovative social entrepreneurs where I was previously an intern, believes everyone can be a ‘Changemaker’ as long as we teach empathy to every child. The future of corporate culture, he says, will be less about towers of specialism and more about teams of teams; in a working world with increasing varieties of personal relationships, empathy is the key to success.
THIS CHANGE IN enterprise education is beginning to happen in universities and colleges across the UK. The students too are becoming more active, with the number of enterprise and business societies ballooning. Entrepreneurship is slowly becoming an active career choice and, in many cases, an active life choice. Ironically, this desire for a nimble, passionate and innovative lifestyle and career comes from a deep-seated conservatism, says Penelope Trunk, founder of Brazen Careerist and commentator on Generation Y. Having seen the concept of a Job For Life disintegrate in their short lifetimes, the sense of control from being one’s own boss begins to outweigh the increased risk involved.
Youth-led enterprise is on the rise, both as a response to a difficult employment market and due to the ease with which a new business can be started. There is an ocean of support available to budding entrepreneurs, whether financial, legal, strategic, training, mentorship, office space or everything in one package. With tax incentives to encourage seed funding and the beginnings of an institutional shift toward enterprise education, ‘Generation Flux’ will find the barriers to enterprise dissolving around them.