Economic crisis driving more young people to become entrepreneurs

Problems finding work has led to an increasingly "entrepreneurial mood" among young people, the Prince's Trust said.

The charity's study of more than 1,600 people aged 16 to 30 found nearly a third (30%) believed they would be self-employed in the future.

One in four (25%) said they expected to be their own boss within the next five years.

Despite just 5% of 16 to 30-year-olds in the UK currently being self-employed, more than a quarter (27%) of those surveyed claimed they were "increasingly" thinking of setting up in business.

Meanwhile, more than one in four unemployed young people (27%) said they would rather try to set up their own business than continue to seek work in today's competitive job market, according to the study with the Royal Bank of Scotland (RBS).

Martina Milburn, chief executive of The Prince's Trust, said: "This research reveals an increasingly entrepreneurial mood among young people.

"Five years on from the start of the recession, youth unemployment remains high and many are seeing self-employment as a way to break the cycle of joblessness.

"It is critical we nurture young people's passion for business and invest in the next generation."

Figures from the Office for National Statistics (ONS) show there were 842,000 self-employed 18 to 34-year-olds from April to June last year, compared to 771,000 in April to June 2008 - a 9% increase.

The YouGov poll found 43% of young people had already made money from entrepreneurial activity such as selling their own product or working on a freelance basis.

Professor Michael Hay, from London Business School, said: "Traditionally Britain has lagged behind other countries in terms of the number of young entrepreneurs, but today's report suggests that young people's attitudes to self-employment are changing.

"It is important that the next generation of young entrepreneurs get the support they need from organisations like The Prince's Trust.

"In the current climate, helping young people to beat unemployment and set up businesses that employ other people can only be a good thing for the UK economy."

The poll also found that although 42% of young people have considered setting up in business, many are being held back due to worries about funding.

More than half (59%) said that a lack of cash would prevent them from setting up in business, while a third (33%) claimed that having a mentor would make them more likely to consider self-employment.

Chris Sullivan, chief executive of RBS's corporate banking division, said: "It is of particular importance in these tough economic times, to provide support for some of the most disadvantaged young people in the country.

"Through our ongoing partnership with The Prince's Trust we've seen first-hand the life-changing results."

The research also found 44% of self-employed young people feel more confident about their business than this time last year, while 40% expect to see business improve in the next six months.

The poll included 278 self-employed young people and 271 who were not in education, employment or training (NEET).

For more information about the Prince's Trust's Enterprise programme, visit www.princes-trust.org.uk/30enterprise.