Gen Z Is Starting Businesses. But Is That Because the Jobs Aren’t There?
Something interesting is happening among the youngest generation entering the workforce. They’re starting businesses, and they’re doing it in increasing numbers.
New figures reported by Newspage show that 10.6% of company directors registered through Your Company Formations between January and August this year were under 25. Before the pandemic, that figure was 8.4%. For the first time, under-25s are now starting companies at roughly the same rate as their share of the adult population.
On the surface, it looks like an entrepreneurship boom. And perhaps it is. But there might be another story hiding underneath those numbers: what if young people aren't just choosing entrepreneurship, but are increasingly being pushed towards it by a changing jobs market?
The traditional route is becoming less certain
For decades, the path into working life was relatively predictable. Get an education, find an entry-level job, learn your trade and gradually progress. It didn't work perfectly for everyone, of course, but it was a route that millions of people followed.
That route hasn't disappeared, but for many young people it is becoming harder to access. Entry-level jobs are under pressure, businesses are looking for greater efficiency and some work is moving offshore. Increasingly, AI can also perform tasks that would once have been given to graduates or junior employees as they learned their profession.
That creates a strange contradiction. We're telling young people that technology is creating incredible opportunities while, at the same time, some of the jobs that traditionally gave them their first opportunity are becoming harder to find. Perhaps we shouldn't be surprised that some are responding by trying to create their own.
Starting a business has changed too
There is another side to this story. While getting into the traditional jobs market may be becoming more difficult, getting into entrepreneurship has become dramatically easier. The cost, knowledge and infrastructure needed to test a business idea have all fallen.
Think about what starting even a very small business once required. You might need someone to build a website, someone to design a logo, an accountant, marketing expertise, sales materials and market research. Very often, you also needed a reasonable amount of money before you'd earned your first pound.
Today, one person with a laptop can do an extraordinary amount themselves. AI can help research a market, develop an idea, write content, create imagery, analyse competitors and prepare sales material. Social media provides access to potential customers, while e-commerce and cloud platforms provide infrastructure that would once have been available only to much larger organisations.
The barriers haven't disappeared, and building a successful business remains difficult. But the cost of trying has fallen significantly. Gen Z also happens to be the generation entering the workforce having grown up with many of the technologies that are removing those barriers.
The 11pm entrepreneur
One of the most interesting details in the new figures is when young people are starting their businesses. According to the data, under-25s are almost twice as likely as over-65s to register a company between 10pm and 6am. They're also more likely to do it at the weekend.
That paints a very different picture of entrepreneurship from the traditional image of somebody walking into a bank with a 40-page business plan and asking for £50,000. It could be someone sitting at home at 11pm researching an idea they've been thinking about for months. They might already have a job, be looking for one, be at university or simply have spotted an opportunity they think is worth pursuing.
That's important because entrepreneurship doesn't have to begin with somebody making a dramatic decision to become an entrepreneur. It can begin with trying to earn the first £50 yourself, then £500 and eventually £5,000. Somewhere along the way, you discover that creating your own income is actually possible.
Most won't become the next big startup
We shouldn't romanticise what is happening. Registering a company is easy; building a successful business isn't. Some of these new companies will never really trade, some will remain small side hustles and plenty will eventually fail.
But failure isn't necessarily the only useful measure. Imagine two 23-year-olds: one spends six months submitting hundreds of job applications and receiving rejection after rejection, while another spends those six months trying to build a small business that ultimately doesn't succeed. Neither may have achieved what they originally wanted, but their experiences have been very different.
The second person may have learned about customers, pricing, sales, marketing, cash flow and technology. They may have learned what people will pay for and, just as importantly, what they won't. Even if the business disappears, much of that experience stays with them.
Perhaps we're asking the wrong question
The obvious debate around these figures is whether we're seeing an entrepreneurship boom or simply a symptom of a struggling jobs market. The answer may well be both. But focusing entirely on that question risks missing a bigger change in how people think about work.
For previous generations, employment and entrepreneurship were generally seen as two very different paths. You got a job or you started a business. Increasingly, that distinction doesn't make as much sense.
Someone might be employed while running a small business in the evenings. They might freelance between jobs, build a side project that eventually becomes their main income, or close a business and return to employment. Five years later, they might start another one.
In that world, entrepreneurship isn't necessarily an alternative career. It's a skill that people carry with them throughout their working lives. The ability to create your own income could become almost as important as the ability to find a job.
AI makes that even more significant
There is plenty of debate about what AI will ultimately do to employment. Some jobs will disappear, many will change and completely new ones will undoubtedly be created. Nobody knows exactly where that balance will eventually land.
But there is another side of AI that receives less attention. The same technology that may disrupt traditional employment is giving individuals capabilities that previously belonged to entire teams. One person can now research faster, create faster, market faster and experiment at a fraction of the previous cost.
That doesn't mean everybody can build a successful company using AI. They can't. Customers still need to want what you're selling, and judgement, persistence, relationships and execution still matter enormously.
What AI does change is the economics of trying. An idea that might once have required tens of thousands of pounds and several people to test can increasingly be explored by one person in their spare time. That potentially opens entrepreneurship to a much larger group of people.
The most interesting statistic might come later
The really interesting number won't be how many under-25s registered companies in 2026. It will be what happens to them next. How many get their first customer, how many are still trading in three years, and how many eventually become someone's main source of income?
It will also be interesting to see how many of these founders eventually employ somebody else, and how many take what they learned back into employment. Some will undoubtedly discover that running a business isn't for them. Others may discover a completely different way of thinking about their careers.
Perhaps the biggest change isn't that Gen Z is suddenly becoming a generation of entrepreneurs. It may be that entrepreneurship itself is becoming a normal part of working life, whether as a side hustle, a temporary source of income, an experiment or a full-time business.
For a generation entering one of the most uncertain jobs markets in decades, that's potentially important. If the job you want isn't there, creating something for yourself is increasingly a realistic alternative.
And for the first time, much of the technology needed to help you try is available to almost everyone.
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*Source: Newspage, “Gen Z business formation boom may be a symptom of a jobs bust”, 9 September 2026. Company formation data supplied by Your Company Formations.*