Intense competition for jobs 'could fuel graduate entrepreneurship'

With competition for graduate vacancies reaching record levels, one analyst has claimed more university leavers could be tempted to start their own business rather than work for someone else.

Saif Bonar, manager of Freelancer.co.uk, made the comments after the Association of Graduate Recruiter said that on average 83 applications are currently being received for each graduate position.

He noted that in some professions, such as investment banking, there can be as many as 232 candidates for every job.

"These findings are not just a problem for the individuals concerned; it is also a major concern for UK PLC, with high-calibre graduates falling into underemployment and not contributing to the economy," Bonar said.

"Young people need not be too depressed about these figures, however. Talented graduates should seriously consider setting up their own business to get out of the rut that traditional employment seems to have sunk into.

"You can build a business from your bedroom - all you need is a computer and a small amount of cash."

According to figures from the Higher Education Statistics Authority, graduates launched 2,357 new start-ups in 2009-10, up from 2,079 in 2008-09.

In total, there were 6,690 active university spin-off companies and businesses launched by graduates or higher education staff last year, which between them employed around 28,000 people and had a combined turnover of £2bn.