We need to help young people create their own opportunities, not just find jobs
Providing young people with financial confidence to set up their own businesses will be essential for the growth of the wider economy, writes Kate Hayward
From Alan Milburn's warning of a "lost generation" to Keir Starmer's recent comments about developing the skills Britain needs for growth, the conversation around young people's economic prospects is becoming increasingly urgent.
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But while the debate tends to focus on helping young people find jobs, we should also be asking whether we're doing enough to help them create jobs of their own.
That question matters because entrepreneurship is an appealing prospect to many young people. Our research found that 72% of 16 to 21-year-olds like the idea of running a business. Yet more than a third (37%) say they lack the financial skills needed to start one, while almost seven in ten (67%) say entrepreneurship feels too risky in the current economic climate.
In other words, ambition is there. The confidence often isn't.
That's a problem not just for young people, but for the wider economy. Small businesses make up 99.2% of the UK's business population and have long been a source of innovation, employment, and growth. If we want more businesses in the future, we need more young people to believe that starting one is within their reach.
Too often, it doesn't feel that way. Six in ten young people in our research believe entrepreneurship is a path reserved for those with money or connections. When financial uncertainty meets a lack of practical knowledge, starting a business can quickly begin to feel like something that's "not for people like me".
That perception is hard to overcome when many young people aren't learning the basics of business finance in education. Understanding cash flow, budgeting, tax, borrowing, or how to assess risk are practical life skills that can help people make informed decisions, whether they go on to start a business or not.
In the absence of formal support, young people are increasingly looking elsewhere. More than a quarter (28%) say they would turn to TikTok for business finance advice, while 23% would use AI-powered searches to help.
While using these platforms can be helpful in getting quick answers or relatable tips, having that foundational financial knowledge is essential to making the right decisions when starting or running a business. Without that grounding, it can be difficult to separate good advice from bad advice, or to understand the caveats that come with any financial decision.
This isn't an argument that every young person should become an entrepreneur. Nor is it a suggestion that we should stop focusing on youth employment. Far from it.
But we do need to broaden our definition of opportunity. For some young people, success will mean securing a great first job. For others, it may mean turning a passion into a side hustle, freelancing, or launching their own business.
If we are serious about unlocking the next generation's potential, financial confidence cannot be treated as a nice-to-have. It is what gives young people the confidence to turn ideas into businesses. The next generation of entrepreneurs is already out there. We must give them the confidence to begin.
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Kate Hayward is the UK managing director of Xero.
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