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Youth unemployment pushes graduates to start up own businesses Youth unemployment pushes graduates to start up own businesses
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Amie Samba picked a bad time to graduate. It was 2009 and Britain was mired in recession, with youth unemployment on its way to a record of more than a million.Amie Samba picked a bad time to graduate. It was 2009 and Britain was mired in recession, with youth unemployment on its way to a record of more than a million.
Like many of her peers, the sports science and psychology graduate found she could get short-term contracts and volunteer work, but a full-time job seemed out of reach.Like many of her peers, the sports science and psychology graduate found she could get short-term contracts and volunteer work, but a full-time job seemed out of reach.
"Around 2008, 2009, with the financial crash and the way the economy was, I wondered what my options were … A lot of people were quite sceptical and scared. It was so competitive," Samba recalls. "Around 2008, 2009, with the financial crash and the way the economy was, I wondered what my options were … A lot of people were quite sceptical and scared. It was so competitive," recalls Samba.
Five years on, the 27-year-old Londoner is glad the downturn pushed her to set up her own business and become part of a generation of young entrepreneurs. It is a trend that labour market experts say illustrates the fast-changing world of work, but unions have cautioned that it is creating an insecure and less well-rewarded workforce. Five years on, the 27-year-old Londoner is glad the downturn pushed her to set up her own business and become part of a generation of young entrepreneurs. Labour market experts say the trend shows how fast-changing the world of work is, but unions have cautioned that it is creating an insecure and less well-rewarded workforce.
Official figures on Wednesday are expected to show Britain's unemployment rate falling further to 6.8%. Self-employment has risen rapidly, helping to drive athe improvement in the overall figure, but the jobless rate for the young is still predicted to be several times higher. Official figures published on Wednesday are expected to show Britain's unemployment rate falling further to 6.8%. Self-employment has risen rapidly, helping to drive the improvement in the overall figure, but the jobless rate for the young is still predicted to be several times higher than average.
After running sports sessions for children and adults, Samba found people were coming to her for tailor-made courses. Within a year of leaving university she had set up her own company, Run Fun Starz.After running sports sessions for children and adults, Samba found people were coming to her for tailor-made courses. Within a year of leaving university she had set up her own company, Run Fun Starz.
"If someone had offered me my dream job, I probably would have turned it down because I was young. I wanted to see if I could make this work and I wouldn't have much to lose," she says."If someone had offered me my dream job, I probably would have turned it down because I was young. I wanted to see if I could make this work and I wouldn't have much to lose," she says.
Her business, which goes into small companies to set up fitness programmes for owners and staff, broke even last year. Samba has moved out of her parents' home and is expecting to hire her first employee soon. Her business, which goes into small companies to set up fitness programmes for owners and staff , broke even last year. Samba has moved out of her parents' home and is expecting to hire her first employee soon.
In a report last month, the TUC noted that pensioners, part-time workers and "odd-jobbers" were the fastest growing groups among Britain's new self-employed workforce. It found that the number of people actually starting their own businesses has fallen in recent years, and that the rise in self-employment was down to an increase in insecure employment such as subcontracting. In a report last month, the TUC noted that pensioners, part-time workers and "odd-jobbers" were the fastest-growing groups among the new self-employed workforce. It found that the number of people starting their own businesses had fallen in recent years, and that the rise in self-employment was due to an increase in insecure employment such as subcontracting.
Richard Exell, the TUC's senior labour market officer, points out that self-employment is often associated with lower levels of investment, low productivity and lower pay.Richard Exell, the TUC's senior labour market officer, points out that self-employment is often associated with lower levels of investment, low productivity and lower pay.
"If someone is voluntarily choosing that and it's their dream or it's the slow, hard start of something that is going to make a difference in the long run, then it may well be worth paying that price. But that's not usually the case," he says. "If someone is voluntarily choosing that and it's their dream or it's the slow, hard start of something that is going to make a difference in the long run, then it may well be worth paying that price," he says. "But that's not usually the case."
There is also anecdotal evidence that the rising cost of a degree is prompting school-leavers to try to set up on their own, but a significant number of young people are choosing self-employment to fill what they see as specific gaps in the market, according to a new report from the Chartered Institute of Personnel and Development. There is also anecdotal evidence that the rising cost of a degree is prompting school-leavers to try to set up on their own. But a significant number of young people are choosing self-employment to fill what they see as specific gaps in the market, according to a new report from the Chartered Institute of Personnel and Development.
"You could say that's because of the crisis and that they didn't have other options, but one way to see it is that many young people have become disillusioned … and want to take things into their own hands and be in control," says the CIPD's research adviser, Claire McCartney, who authored the report."You could say that's because of the crisis and that they didn't have other options, but one way to see it is that many young people have become disillusioned … and want to take things into their own hands and be in control," says the CIPD's research adviser, Claire McCartney, who authored the report.
Produced in partnership with the education charity Young Enterprise, it concludes that the school system has failed to keep up with the changing world of work. It highlights a "big gap between those who aspire to start up their own businesses and those who actually do" and calls for enterprise education to be made a mandatory part of the curriculum. Produced in partnership with the education charity Young Enterprise, it concludes that the school system has failed to keep up with changes in the world of work. It highlights a "big gap between those who aspire to start up their own businesses and those who actually do" and calls for enterprise education to be made a mandatory part of the curriculum.
Young Enterprise says that against the backdrop of rising youth unemployment it has seen growing demand for the start-up programme it runs in universities. The programme helps students set up and run their own company for an academic year while still studying. Young Enterprise says that against the backdrop of rising youth unemployment it has seen growing demand for the start-up programme it runs in universities. This helps students set up and run their own company for an academic year while still studying.
The charity's chief executive, Michael Mercieca, believes the rise in young entrepreneurship can help improve social mobility and dimisses the perception that a large amount of money is need to start up any business. The charity's chief executive, Michael Mercieca, believes the rise in young entrepreneurship can help improve social mobility and dismisses the perception that a large amount of money is needed to start up any business.
"What we have found through students participating in our programmes is that it's possible to start making a profit from just a small amount of money. However it can certainly take a while before a decent income can be earned from the business, meaning low pay in the initial stages is a concern," he says. "What we have found through students participating in our programmes is that it's possible to start making a profit from just a small amount of money," he says. "However, it can certainly take a while before a decent income can be earned from the business, meaning low pay in the initial stages is a concern."
That has been the experience of 24-year-old Jason Gibbs, who launched the website Comparetheuni.com with a fellow law graduate in 2012. Gibbs took other jobs to pay his bills while working on the site, despite raising £20,000 from angel investors. The venture is taking off, with revenues from advertisers and from universities who pay to add premium content, but Gibbs says he still works more hours than most graduates.That has been the experience of 24-year-old Jason Gibbs, who launched the website Comparetheuni.com with a fellow law graduate in 2012. Gibbs took other jobs to pay his bills while working on the site, despite raising £20,000 from angel investors. The venture is taking off, with revenues from advertisers and from universities who pay to add premium content, but Gibbs says he still works more hours than most graduates.
"When you have got your own business, even if it's late at night and the business needs work, you do it. Like if a baby wakes up and needs milk, you're going to feed it," he says."When you have got your own business, even if it's late at night and the business needs work, you do it. Like if a baby wakes up and needs milk, you're going to feed it," he says.
He is confident and says other young entrepreneurs should be too. But he is confident and says other young entrepreneurs should be too.
"We have grown up with technology and we can be the change makers. A lot of people used to go into business, the corporate world, make some money and then come out and start a business. Now people start businesses young," he says. "We have grown up with technology and we can be the change-makers. A lot of people used to go into business, the corporate world, make some money and then come out and start a business. Now people start businesses young," he says.
"We have the knowledge and skills when it comes to technology. As a young person you have got nothing to lose.""We have the knowledge and skills when it comes to technology. As a young person you have got nothing to lose."
Case studyCase study
When Cicely Elliott-Berry was still at school she decided a degree was not for her, and that her future lay in distilling gin. When Cicely Elliott-Berry was still at school she decided a degree was not for her – her future lay in distilling gin.
Teachers and friends pushed her to apply to university, but she wanted to run her own business. Her two brothers and sister felt the same way, and now they have set up a distillery and are looking to launch Sibling Gin soon. Teachers and friends were pushing her to apply to university, but she wanted to run her own business. Her two brothers and sister felt the same way and now they have set up a distillery and are looking to launch Sibling Gin soon.
"We all opted out of university really. It wasn't for us. For some people it's an obvious choice but not for us. We were surrounded by business and pretty much raring to go as soon as we finished school," says the 18-year-old."We all opted out of university really. It wasn't for us. For some people it's an obvious choice but not for us. We were surrounded by business and pretty much raring to go as soon as we finished school," says the 18-year-old.
Her parents run a brewery in Cheltenham and the siblings have rented a corner. The two eldest, Felix and Clarice, are still in full-time jobs, while Digby, at 15, is at school but helps out and will probably join the business when he leaves school, says Cicely. She is working on Sibling Gin full-time but also has a bar job at weekends to top up her income. Her parents run a brewery in Cheltenham and so the siblings are renting a corner. The two eldest, Felix and Clarice, are still in full-time jobs, while Digby, just 15, helps out and will probably join the business when he leaves school, says Cicely. She is working on Sibling Gin full-time but also has a bar job at weekends to top up her income.
. According to one report, there was a 29% rise in firms started by 18 to 25-year-olds during the four years after the recession took hold in 2008. The Simply Business Start-up Index showed the rise to be in contrast with a wider decline of 8.7% for all start-ups over the same period. They are part of the growing number of young people who have turned to self-employment as the labour market has changed. According to one report, there was a 29% rise in firms started by 18- to 25-year-olds during the four years after the recession took hold in 2008.
Cicely says her decision was more down to her upbringing than the downturn. The Simply Business Start-up Index showed the rising number of new businesses set up by young people was in contrast to a wider decline of 8.7% for all start-ups over the same period.
"My parents have run the brewery since I was seven," she says. "When we were growing up, we all said what we wanted to do and it was not 'I want to be a hairdresser but I want to own a hairdressers' … If you want a job, you make a job." Cicely says her decision was more down to her upbringing than the downturn. "My parents have run the brewery since I was seven," she says. "When we were growing up, we all said what we wanted to do and it was not 'I want to be a hairdresser' but 'I want to own a hairdressers'... If you want a job, you make a job."
She recommends that other young people with a business idea give it a go. She recommends other young people with a business idea give it a go. "We were lucky that we have the support of our parents so that we can do something so capital-intensive. But you can set up an online company. You don't have to have a huge amount of money to put into it."
"We were lucky that we have the support of our parents so that we can do something so capital-intensive, but you can set up an online company. You don't have to have a huge amount of money to put into it," she says.