Number of UK millennial directors increases by over a third to 56,000 in a year

•    ‘Generation start-up’ helped by lower costs of entry – including rise of shared workspace and cloud computing

The number of millennial* directors of SMEs in the UK has increased by 37% to 56,000 in 2017/18, up from 41,000 in the previous year.

This rise in entrepreneurship amongst millennials has been given a helping hand by the difficult post-credit crunch job market that many graduates faced upon leaving university. This incentivised many to launch their own businesses. In particular, the challenges facing the banking sector in 2007-2008 led to many individuals spinning off and setting up their own fintech businesses. For example, two of the UK’s leading fintech entrepreneurs are both alumni of Lehman Brothers:

•    Nikolay Storonsky, who founded digital banking start-up ‘Revolut’
•    Anil Stocker, who co-founded ‘MarketInvoice’, the online marketplace for selling outstanding invoices

The rise of the ‘gig economy’ has also given more young university and schools leavers a taste of managing their own workload.

Many of the entry barriers to starting a business, including initial launch costs, are now much lower than in previous years. The growth in cloud computing and ‘software as a service’, for example, continues to cut the up-front cost of IT needed for a small business.

The increased availability of shared and flexible workplaces, such as Central Working and WeWork has also helped make it easier for a start-up to launch and scale up. In 2017, flexible workplaces represented 4.5% of total stock of central London office space, up from approximately 1.7% in 2007.** Many shared workplace providers now offer short-term leases that can be a more affordable solution for recent start-ups.

Ross Northall, Partner, says: “The dream of launching a start-up has become increasingly attainable to many.

“The rise of the gig economy and the tough market for graduate jobs has obvious downsides but these may have acted as a catalyst for young entrepreneurs to strike out on their own.

“The start-up boom of the last generation of entrepreneurs saw the success of technology companies, such as King Digital, Net a Porter and ASOS, that has served as an inspiration for the current generation. Millennials are now taking what they have learned from that earlier wave of businesses and are building on that.”

*Directors born 1981-1996 of companies with a turnover of less than £25 million per annum
**Cushman & Wakefield Research & Insight

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