Young entrepreneurs are on the rise nationwide.
We analysed Companies House data to reveal unprecedented growth in under 25s launching their own businesses across the country. In 2020, companies started by people under 25 increased by 151%. Last year, this pioneering demographic grew by another 111%, launching 24,330 businesses in the UK.
It’s perhaps unsurprising that we witnessed such a dramatic spike in innovation during the pandemic. The experience caused many people to reconsider their careers and take the bold step of pursuing a path of their own. Now, young business owners are making their presence felt across various industries, injecting new energy into the economy.
Notably, the growth rate of young entrepreneurial businesses outranks other age brackets. Compared to under 25s, the pace of new companies created by 26-30-year-olds is 62% slower in the same period. For 31-40-year-olds, the comparison is starker at 86%.
The data suggests that younger people find the opportunity to start a business of their own particularly attractive compared to other generations.
Which UK city has the biggest concentration of young entrepreneurs?
City | Number of entrepreneurs under 25 |
London | 6,386 |
Birmingham | 588 |
Manchester | 501 |
Leicester | 288 |
Cardiff | 249 |
Leeds | 225 |
Wolverhampton | 216 |
Nottingham | 215 |
Liverpool | 211 |
Sheffield | 207 |
Sheffield and Wolverhampton lead the charge
Unsurprisingly, London is home to the highest number of young entrepreneurs in the country, but pockets of innovation are growing rapidly throughout the UK. Of the UK’s major cities, Sheffield and Wolverhampton saw the most significant year-on-year growth in entrepreneurs under 25. Wolverhampton saw a staggering 484% growth in 2021, and Sheffield‘s young entrepreneur pool increased by 368%.
Ecommerce is the most popular sector for under 25s
Confirmed by our analysis, ecommerce is a firm favourite for under 25’s looking to run their own companies. Last year, 2,492 ecom businesses were launched, more than double the next most popular vocation of freight transport and logistics.
With the rapidly increasing digitisation of shopping enforced by Covid restrictions, thousands of savvy young entrepreneurs took advantage and set up their own operations. London is an excellent example of this trend: 17% of young entrepreneurs in the capital last year operated in eCommerce, more than double the number of London’s next most popular sector for young pioneers, hairstyling.
Which sector attracts the youngest CEOs
- Ecommerce – 2,492 entrepreneurs
- Freight transport – 1,147 entrepreneurs
- Real estate – 552 entrepreneurs
- Packaging activities – 574 entrepreneurs
- Clothing – 562 entrepreneurs
- Hairdressing -528 entrepreneurs
London, Birmingham and Manchester all saw a solid lean towards ecommerce in their young entrepreneur population. However, the story is quite different when we look at some smaller cities.
Young entrepreneurs in some cities have bucked the trend toward digital companies. In Wolverhampton and Nottingham, freight transport has proved the most popular type of new business. At 28% and 13% respectively, the growth of freight companies started by entrepreneurs in these midlands cities interestingly mirrors the overall trend across all age groups. This suggests that young entrepreneurs are not universally seeking to create entirely new modes of business.
Young women lead the way in critical industries
While men still make up the majority of young entrepreneurs in the UK (71%), young female business owners are leading the field in several critical areas, including:
Sector | % of female entrepreneurs under 25 |
Business support services | 73% |
Cosmetics | 56% |
Warehousing and storage operations | 55% |
Packaging activities | 54% |
Hairdressing | 54% |
Despite notable improvements in the numbers of female entrepreneurs in the above sectors, there are still plenty of traditionally male-dominated areas which continue to see only a small amount of female entrepreneurship. Most notably, tech and tradespeople continue to be overwhelmingly male. The five sectors which saw the largest proportion of under-25 male entrepreneurs were:
Sector | % of male entrepreneurs under 25 |
Electrical installation | 96% |
Engineering | 90% |
Software publishing | 89% |
Used car sales | 88% |
Maintenance or repair of motor vehicles | 87% |
Young starters in 2022: Rise of the Under 25s
The tide of young entrepreneurs is only gaining more momentum in 2022. In the first three months of 2022, 16,303 businesses have been started by people under 25. This is a 253% growth in the first three months of 2021.
Once again, ecommerce is the primary driver of growth, with 1,821 businesses already being started by young entrepreneurs since the new year.
How flexible office space supports young entrepreneurs
Entrepreneurs embracing technology and new styles of working increasingly turn to coworking and flexible office solutions to support them as they grow. Here’s why young entrepreneurs can thrive in a coworking office:
- No capital needed
Business owners can rent a coworking space with a flexible lease. There is no need for capital investment, and the spaces can expand as needed. - Ideal for networking
Coworking space is all about community, and this is the ideal innovative environment for entrepreneurs to thrive, network and meet like-minded people. - Access new talent
Working in a flexible office environment enables more collaboration and access to talent who can work from virtually anywhere.
All data sourced from our Companies House dashboard, comparing 2021 to 2019 data.
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