Unlocking £10 billion: how backing young entrepreneurs can power UK growth

A new report by Urban Foresight has revealed that closing the productivity gap between UK and US youth-led enterprises could inject over £10 billion into the UK economy, presenting a major untapped opportunity for growth and innovation.

Commissioned by the UK Innovation Districts Group (UK IDG) and Connected Places Catapult, and funded by Innovate UK, the study responds to a worrying trend: a decline in the UK’s Total Early-stage Entrepreneurial Activity (TEA) compared to other leading economies. TEA is a measure of the proportion of young adults launching or running new businesses. This dropped from 13% in 2021 to 12% in 2022 for 18-24 year olds in the UK, whilst other nations experienced growth.

Supporting the UK’s most entrepreneurial generation

Urban Foresight’s report highlights the potential for long-term inclusive economic growth by supporting young people with the skills, networks, and resources to turn entrepreneurial ambition into business success.
More than 50% of young people in the UK are interested in starting a business, yet only 4% manage to establish sustainable enterprises on their first try.

Key barriers include:
• limited access to role models and networks.
• limited availability of entrepreneurial education.
• difficulty accessing finance.
• a pervasive confidence gap, with 61% of young people citing fear of failure as a major deterrent.

Addressing these challenges with tailored support presents a timely opportunity to innovate, boost productivity, and strengthen local economies.

A framework for advancing youth enterprise

The report sets out a universal two-phase framework to guide local leaders in designing impactful youth entrepreneurship initiatives. This structured model is designed to tackle regional disparities and empower more young people to turn their ideas into thriving businesses.

Crucially, the research identifies the development and testing of targeted interventions as the next vital step. By using this framework, local areas have a valuable opportunity to design, pilot, and scale inclusive enterprise programmes that are tailored to their unique economic and social contexts.

“This report provides a clear path for harnessing the UK’s immense youth entrepreneurial talent.” – said Eamon Banerjee, Consultant at Urban Foresight. “It shows that by strategically investing in skills development and embracing a more inclusive, place-based approach, we can secure a more prosperous future for young people across the UK.”

You can read the full report here.

This work is the latest in Urban Foresight’s projects advising on skills – from forecasting the skills landscape in the UK to designing a business support programme for start-ups in North East England.

If you’d like to explore how to develop tailored programmes using this framework, contact us at hello@urbanforesight.com.