Britain is on the cusp of an entrepreneurial boom that could transform the workforce and pour billions into the economy. This is according to a new study which shows that one in 10 adults plan to start a business within the next year, which equates to more than 5 million people.
The findings, published in Block and Public First’s Entrepreneurship Revolution report, paint a picture of a UK increasingly dominated by independent businesses, part-time businesses and digital-first micro-enterprises. However, the report warns that outdated financial systems and a lack of modern tools could throttle the country’s entrepreneurial potential.
The report suggests that the country’s startup culture is predominantly driven by younger adults. Two-thirds (67%) of 18-34 year olds say they are thinking about or are actively interested in starting a business, compared to the national average of 40%. Nearly two in five (38%) young adults have started a small business or a side hustle.
Part-time work is quickly becoming a mainstay of the UK economy, with 15% of Brits already doing such work and 13% doing additional work such as tutoring or childcare to supplement their income.
Ethnic minorities play a prominent role in this change: 25% currently have a part-time job and 23% plan to start a business within 12 months.
However, a gender gap remains. While almost a third of young women (29%) have already started a business or a part-time job, the figure is 42% of young men.
Only one in five part-time workers say they have no interest in turning their idea into a full-time job – a sign that a new generation of job-creating startups could be waiting in the wings.
However, access to finance remains the biggest barrier: 37% say better access to finance would help them grow, followed by improved tools and technology (30%) and marketing support (30%).
The report also highlights a £4 billion economic failure in the credit market: more than 50,000 viable SMEs are excluded from loans every year despite low default rates. Meeting this demand, the report argues, could unlock £7.4 billion of additional economic output.
John O’Beirne, CEO of Squareup International, said the findings reveal a system that is still biased in favor of large, established companies: “The ambition to start and grow businesses is there, but many entrepreneurs still feel like the financial system is standing in their way. Fairer, more flexible funding gives founders the freedom to scale, manage cash flow and invest for growth.”
Research shows early successes in non-traditional financing models such as distribution-linked financing. More than half of Square sellers surveyed said accessing financing through Square was easier than with banks.
Meanwhile, modern payment solutions are proving transformative.
According to the report, buy now pay later tools helped generate £6.6 billion in additional sales in 2024.
Rich Bayer, CEO at Clearpay, says even a small increase in productivity could make a huge difference: “If just 1% more SMEs increased revenue faster than headcount, it would add £24.6 billion to the UK economy every year. That’s a huge untapped opportunity.”
“I started as a hobby baker – now it’s my full-time business”
One of those driving the boom is founder Gaya Vara of Gaya Bakery, who turned a lockdown passion into a thriving boutique pastry shop.
“Baking started as a creative outlet while I was working in finance – but the demand quickly grew,” she said.
“Our online store has been instrumental in this growth. But running a store has its own magic. Customers coming in and smelling freshly baked pastries – that human connection can’t be replicated online.”
As the appetite for entrepreneurship grows, the research makes one thing clear: the UK is at a crossroads. If you get finance and digital tools right, the UK could usher in a new era of growth driven by small, creative and resilient businesses. Get it wrong and you risk letting a generation of talent fall through the cracks.
