Not since the early 1980s has a generation of graduates emerged from university to such a barren job market.
And at least in previous recessions students’ passage through higher education was financed by the state, whereas today’s hapless university leavers are burdened with record debts thanks to the introduction of top-up fees. It’s a sad fact of any recession that young people are caught in the catch-22 situation of being unable to get jobs commensurate with their qualifications for want of experience, but unable to amass such experience without first getting a decent job.
Risky choices
A survey of the top 100 graduate employers by the Higher Education Statistics Agency recently revealed that vacancies have been cut by more than a quarter (28%) this year, while roughly one in five (19%) graduates who have found work in the three and a half years subsequent to leaving university aren’t in graduate-level jobs.
Perhaps those hitherto intent on a safe, structured career progression might surmise that in a post-bust world, where few are free of worry about jobs, assets and finances, starting a business is only one of many risky career choices
Debt-ridden and with vacancies at top firms in their field at a premium, perhaps university leavers might be more inclined to consider starting a business instead – if you can’t join them, beat them. Perhaps those hitherto intent on a safe, structured career progression might surmise that in a post-bust world, where few are free of worry about their jobs, assets and finances, starting a business is only one of many risky career choices.
And contrary to what many might reasonably assume, starting an enterprise in a recession isn’t the equivalent of holidaying in war-torn countries. Rather, it can be more like coming on as a substitute in a football match: as poorly-run companies fold, leaving market gaps, you can be the “fresh pair of legs” to capitalise when the market recovers.
Property purchase or rental costs are lower during downturns, while the pool of talent to recruit from is broader and deeper due to high unemployment. And consumers don’t stop buying in recessions, they just buy smarter.
Entrepreneurs that offer value in tough economic times can thrive. Some sectors are even recession-proof, usually those selling non-discretionary goods, although evidence abounds that affordable luxuries sell well too.
Reluctant banks
But if finding work is more difficult, so too, surely, is generating the business financing to kick-start a venture. Just as employers, drawing on a larger pool of talent, are reluctant to take a chance on the inexperienced, banks withhold credit from all but the surest of sure things – and that means, depressingly, entrepreneurs with a track record of success in what some refer to condescendingly as the ‘real world’.
What chance does a graduate with scant work experience – let alone a background of running businesses – and huge debts have of getting credit?
Well, one development is helping young entrepreneurs bridge the finance and experience gap with older business people: the internet.
Dotcom entrepreneurs often emerge from university. If anything, a fifty-something setting up a social network would seem unusual and less credible than a 20-year-old student.
Gavin Edley, an Open University graduate who funded his copywriting business, Midas Copy, proceeds from the sale of a website he founded while doing his A-levels, believes using the internet “helps level the playing field with people with more experience” in other areas. “It gives you a bit more credibility as a young person.”
