Britain is on the cusp of an entrepreneurship surge that could reshape the workforce and inject billions into the economy, according to new research revealing that one in ten adults plans to start a business within the next year, the equivalent of more than 5 million people.
The findings, published in the Entrepreneurship Revolution report from Block and Public First, paint a picture of a UK increasingly powered by independent enterprise, side-hustles and digital-first microbusinesses. The report warns, however, that outdated financial systems and a lack of modern tools risk throttling the country’s entrepreneurial potential.
The report suggests the country’s startup culture is being fuelled overwhelmingly by younger adults. Two-thirds (67%) of 18–34-year-olds say they are considering, or actively interested in, starting a business, compared with the national average of 40%. Nearly two in five (38%) young adults have already launched a small business or side-hustle.
Side-hustles are fast becoming a pillar of the UK economy with 15% of Brits already running one and 13% doing additional work, such as tutoring or childcare, to supplement their income.
Ethnic minorities are playing an outsized role in the shift, with 25% currently running a side-hustle and 23% planning to start a business within 12 months.
But a gender divide remains. While nearly a third of young women (29%) have already started a business or side-hustle, this rises to 42% among young men.
Only one in five side-hustlers say they have no interest in turning their idea into a full-time job – a signal that a new generation of job-creating startups could be waiting in the wings.
But access to funding remains the biggest barrier with 37% say better access to finance would help them grow, followed by improved tools and technology (30%) and support with marketing (30%).
The report also highlights a £4bn economic failure in the lending market: more than 50,000 viable SMEs are rejected for loans every year, despite low default rates. Meeting this demand, the report argues, could unlock £7.4bn in additional economic output.
John O’Beirne, CEO of Squareup International, said the findings expose a system still biased in favour of large incumbents: “The ambition to start and grow businesses is there, but many entrepreneurs still find the financial system stacked against them. Fairer, more flexible funding frees founders to scale, manage cash flow and invest in growth.”
The research shows early success for non-traditional finance models such as sales-linked funding. More than half of Square sellers surveyed said accessing finance through Square was easier than with banks.
Meanwhile, modern payment solutions are proving transformative.
Buy Now, Pay Later tools helped generate £6.6bn in additional sales in 2024, according to the report.
Rich Bayer, CEO at Clearpay, says even a marginal uplift in productivity could make a seismic difference: “If just 1% more SMEs grew revenue faster than headcount, it would add £24.6bn to the UK economy each year. That is a huge untapped opportunity.”
‘I started as a hobby baker — now it’s my full-time business’
Among those powering the boom is founder Gaya Vara of Gaya Bakery, who turned a lockdown passion into a thriving boutique patisserie.
“Baking began as a creative outlet while I worked in finance — but demand grew quickly,” she said.
“Our online store has been instrumental in that growth. But running a shop has its own magic. Customers walking in, smelling freshly baked pastries — that human connection can’t be replicated online.”
As the appetite for entrepreneurship strengthens, the research makes one thing clear: the UK stands at a crossroads. Get finance and digital tools right, and Britain could unleash a new era of growth powered by small, creative, resilient businesses. Get it wrong, and a generation of talent risks slipping through the cracks.
Read more:
Young Brits drive UK’s entrepreneurship boom as two-thirds plan to work for themselves
