The 2024 UK Startup Awards provided valuable insights into the motivations behind starting a business, aligning closely with the well-established distinction between “opportunity” entrepreneurship and “necessity” entrepreneurship, as identified by the Global Entrepreneurship Monitor (GEM).
The data reveals that 81% of founders started their businesses to capitalise on a promising business opportunity, reinforcing previous findings that most entrepreneurship is opportunity-driven. This type of entrepreneurship is typically linked to higher growth potential, better access to resources, and more favourable business outcomes compared to necessity-driven ventures. Entrepreneurs in this category often possess the financial stability, networks, and strategic foresight to pursue market gaps and innovative ideas.
However, 13% of start-up founders were driven by necessity, starting their businesses due to a lack of viable employment options. These individuals often engage in entrepreneurship to earn an income during economic downturns, industry disruptions, or personal circumstances that limit traditional employment opportunities. Necessity-driven entrepreneurs may face unique challenges, such as restricted access to funding, limited business support networks, and higher pressure to achieve immediate financial stability.
Additionally, 6% of entrepreneurs cited both opportunity and necessity as their motivation for starting their businesses, indicating a blend of ambition and external pressures in their entrepreneurial journey.
While opportunity-driven entrepreneurship is dominant across all demographics, notable differences emerge among specific groups. Women, non-tech entrepreneurs, individuals from economically disadvantaged regions, and older founders are more likely to pursue entrepreneurship out of necessity. In contrast, tech entrepreneurs and men are overwhelmingly motivated by good business opportunities, reflecting other studies that have shown that high-risk sectors, such as technology, and more privileged demographics (including men and those from wealthier areas) are better positioned to pursue entrepreneurship based on market opportunities rather than necessity.
Understanding these motivations is crucial for policymakers and business support organisations in designing targeted initiatives that address the specific needs of different entrepreneurial groups. For instance, tailored financial support, mentorship programmes, and regional development initiatives could provide necessity-driven entrepreneurs with the resources they need to build sustainable businesses.
As the entrepreneurial landscape continues to evolve in the UK, recognising the diverse motivations behind business creation will be essential in fostering an inclusive and thriving start-up ecosystem. Whether driven by opportunity or necessity, all entrepreneurs contribute to innovation, economic growth, and job creation and every business has its own unique set of challenges and opportunities.
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Every year, we celebrate the UK’s most ambitious and inspiring businesses through our award programmes:
🏆 The Great British Entrepreneur Awards – Recognising the game-changing entrepreneurs shaping the future.
🚀 The UK StartUp Awards – Celebrating the UK’s most exciting early-stage businesses.
📈 The UK Fast Growth Index – Showcasing the fastest-growing businesses across the country.
🏭 The Great British Industry Awards – Honouring the UK’s most innovative and high-performing industry leaders.