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