Supporting Young Entrepreneurs

Economy young woman on laptop
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ViewsJune 30th, 2022

It is time to offer the self-employed a new deal. Dr Mark Lang, consultant at the Bevan Foundation offers solutions to problems facing young entrepreneurs.

The Welsh Government has recently announced £5 million of funding over the next three years to support young people into self-employment. This is part of a wider package of £20.9m per year it has set aside to extend Business Wales beyond the current EU funding, which is due to end in 2023.

The Welsh Government has said that the £5 million funding will continue to support Big Ideas Wales, which is currently operated by Business Wales, and provides learning for young people through workshops for those considering starting their own business. In addition, a Young Person’s Start Up Grant of up to £2,000 will be available for young people that are unemployed, have left education or training, and are in the early stage becoming self-employed. Pre and post one year start-up support, including one-to-one business advisory support, entrepreneur mentoring, business planning, and financial management will also be available.

A wider package of support is needed

Support for young people to pursue their entrepreneurial ambitions is, of course, very welcome. As the Bevan Foundation’s research into low-income self-employment demonstrates, however, supporting the self-employed through traditional business support mechanisms like Business Wales is just part of the overall package of support that is needed by young and/or newly self-employed people need if they are to avoid precarious patterns of low-income self-employment.

There has been a significant increase in the number of people in Wales who are self-employed over the last couple of decades, but this has been the case particularly since 2008. Whereas many people have benefited from the numerous advantages of being self-employed, others have found themselves in precarious patterns of low-income work, and experience poor financial resilience as a result.

In my research for the Bevan Foundation, I have argued that although business support can, and should, help self-employed people achieve rewarding, sustainable, and productive work opportunities, it is also necessary to provide support for low-income self-employed people who, for whatever reason, are finding it a struggle. Public policy must, therefore, see the whole person and their households, not just their current or potential business activities.

Recognising the limitations of self-employment

For me, we also need to recognise that self-employment may not be suited to everyone. In the rush to support and encourage people into self-employment, programme participants must be made aware not only of the opportunities of being self-employed, but also the potential downsides. Business support programmes, like other policy interventions, are often evaluated against certain key performance
indicators. It is important that such indicators extend deeper into the working life of a new business, and to evaluate whether people end up running businesses that provide them and their families with a decent standard of living.

In my report for the Bevan Foundation, I have argued that it is time to offer the self-employed a new deal. This requires not just helping them to do business better, but also by providing more comprehensive access to protections when times are hard, and by removing any unfair barriers that may exist that impact the self-employed to a greater extent that the wider population. Although continued support for new entrepreneurs with sustainable business potential is therefore welcome, it is just part of the overall mix of intervention that is required.

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