Nearly one in five 18- to 24-year-olds in the UK will start or run a business by 2025, the highest rate on record, according to a Global Entrepreneurship Monitor (GEM) UK report, as employers reduce graduate and entry-level recruitment.
The GEM UK 2025/26 report, Beyond Unicorns: Everyday Ambition, Uneven Support, was published on 27 October. A summary of findings by the All-Party Parliamentary Group for Entrepreneurship put the youth rate at 19.6 percent.
Among all adults, early-stage entrepreneurial activity rose from 12.0 percent to 16.8 percent in 2025, the highest since GEM records began in 1999, with young men and women driving the increase, according to Warwick Business School. The share of new entrepreneurs with growth ambitions more than doubled in three years to a record 35 percent.
The same research found the UK’s global ranking for the entrepreneurial ecosystem dropped from 29 to 37.
Professor Mark Hart of Warwick Business School, UK lead for GEM and co-director of the Center for Enterprise Research, presented the findings to MPs as part of a Commons committee inquiry into entrepreneurship and business. “Our research shows entrepreneurial ambitions are growing, but there are clear weaknesses in the support ecosystem,” he said.
The rise in youth starts comes as the number of graduate roles advertised continues to fall. Job site Adzuna listed 7,826 graduate vacancies in September, down 43 percent from 13,754 a year earlier. Andrew Hunter, co-founder of Adzuna, said: “The balance of power in the hiring market has moved more towards the employer.”
A survey of 1,001 senior UK business leaders by the Survation for the Work Foundation at Lancaster University, published in August, found 36 per cent of employers had cut entry-level jobs for 16 to 24-year-olds in the previous 12 months. The figure is 48 percent among medium-sized employers, 46 percent among large employers and 24 percent among small companies.
Some 43 percent of employers say that investment in AI or automation has reduced the number of entry-level roles available, rising to 60 percent among large employers. Dr Divya Jyoti from Lancaster University’s School of Management said: “These findings highlight the worrying double pressures on young people looking for work.”
The Employment Foundation said more than one million 16- to 24-year-olds were not in education, employment or training, the highest number since 2013, adding to the rise in young people not in work or education recorded earlier this year. The findings follow a longer slide in entry-level hiring since the launch of ChatGPT.
Demand for state-backed start-up finance among young people is also on the rise. The number of loans taken out by Gen Z founders through the government-backed Start-Up Loan program will increase from 830 in 2020 to 1,929 in 2025, a 132 percent increase, according to the British Business Bank. The program’s share of loans rose from 7.7 per cent to 17 per cent over the same period, and annual loan values rose from £7.2m to £21.2m.
Louise McCoy, managing director of Start Up Loans products at British Business Bank, said: “The younger generation are very entrepreneurial and should not be underestimated.”
A similar pattern emerged in the US. At least 23 percent of Americans ages 18 to 34 have opened their own business or venture, up from 19 percent in 2021, according to Babson College’s annual survey of entrepreneurial activity. Payroll provider Gusto found that more than 70 percent of Gen Z entrepreneurs starting a business by 2025 will use AI to create.
Jai Bhatia, 21, founded Turnstone, an app that opens AI friends, before graduating from the University of California, Berkeley. He and co-founder Aryan Vij, 24, turned down job offers and received $500,000 from accelerator Y Combinator.
“It’s like, hey, I don’t want to be replaced by AI in three years,” Bhatia said.
Donna Kelley, professor of entrepreneurship at Babson, says: “The logic that you get work experience to gain a little credibility before starting a business is starting to change.”