By Daniel Hunter
Running a business at school almost doubles your chances of self-employment later in life, according to independent research by Kingston University Business School for Young Enterprise.
Teenagers who get the chance to set up and run a profit-making enterprise in the classroom were almost twice as likely (42%) to become company owners than those who have not (26%), according to the new report Impact: 50 Years of Young Enterprise.
This powerful finding comes as a separate survey by Opinium Market Research for the charity shows more than two-thirds (69%) of 17 year olds are “worried” or even “terrified” that they are heading straight for the dole queue when they leave school.
The huge impact that hands-on experience of running a business has on young people’s later careers is revealed by a detailed nine-month study conducted by Dr Rosemary Athayde of Kingston University Business School’s Small Business Research Centre to mark the charity’s 50th Anniversary.
To assess the impact of Young Enterprise since its foundation in 1962, Dr Rosemary Athayde conducted three separate surveys along with face-to-face and telephone interviews with 371 ‘alumni’ who attended Young Enterprise programmes and a control group of 202 people who had never been on a Young Enterprise programme.
Her results showed that young people who get that crucial early experience go on in later life to create firms that have a larger turnover, are more likely to employ people, are more innovative and are better at surviving a recession than those set up by people who did not do enterprise at school. The report’s key findings are:
- Young Enterprise alumni are more likely to end up running their own businesses: 42% of the alumni surveyed set up firms compared to 26% in the control group of non-alumni.
- Have a larger turnover: 12% of the alumni firms are turning over £500,000 a year compared 3% of the control group's firms. In fact some 3% of alumni firms turn over more than £1 million, compared to none among the non-alumni.
- Employ more people: 11% have 51-99 employees compared 9% of the control group. Two per cent of the alumni have 100-249 employees compared to none in the control group.
- Are more innovative: 21.2% of alumni firms were digital and ‘cloud’-based firms compared to 3% in control group.
- Are more diverse: Alumni firms ranged from internet sales to advanced engineering, corrosion control and ‘retro’ tourism. Control group firms were concentrated in fewer sectors, particularly health care and education.
- Are more likely to be limited companies: suggesting a healthier understanding of the need to protect themselves against risk than those in the control group.
- Are more likely to be serial entrepreneurs: They appear less deterred by the prospect of failing than the control group.
- Alumni firms are more likely to be resilient: 49.6% of alumni firms said boosting sales was top priority in the downturn while only 5% opted for internal cuts.
Meanwhile, in a separate survey, market research company Opinium conducted online interviews with 1,051 14-18 year olds. It found that some 69% of 17 year olds agreed with the statement “I am worried about getting a job in the future.”
Only 13% of this age group said they were “unconcerned” about the mounting scale of youth unemployment. Young people in the East Midlands (62%) most concerned about their prospects followed by the North West and Yorks & Humber (61%). Even in areas where anxiety is at its lowest level the numbers are still high, with Wales on 43% and London 50%.
Michael Mercieca, Young Enterprise Chief Executive said: ‘At a time when youth unemployment remains unacceptably this research proves that exposing young people to enterprise education in school, colleges and universities gives Britain far more entrepreneurs than it would otherwise have had. It proves Young Enterprise has, for 50 years, been an enormous engine nurturing the crucial entrepreneurial talent that Britain desperately needs to propel its economy into the next half century.’
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