Early-stage entrepreneurial activity in Wales reached 11.1% in 2025, compared with 16.8% across the UK, according to the latest Global Entrepreneurship Monitor (GEM) report.
This means the proportion of people starting or running young businesses in Wales was approximately a third lower than the UK average.
Wider gap among young adults
Among 18 to 24-year-olds, the difference was even more pronounced, with entrepreneurial activity standing at 11.3% in Wales compared with 19.6% across the UK.
These figures do not indicate whether the businesses being created are innovative, productive or capable of rapid growth, nor do they establish that government policy is directly responsible for the differences. Nevertheless, they provide a measure of entrepreneurial participation and reveal a gap that should concern anyone interested in the long-term prosperity of the Welsh economy.
Welsh Government can reasonably argue that entrepreneurial activity remains high by historical Welsh standards. However, the more important question is whether Wales is creating opportunities to establish businesses comparable to those available elsewhere in Britain. On the evidence presented by GEM, Wales remains some considerable distance from achieving that ambition.
Confidence gap among young people
Perhaps the most worrying findings concern the next generation of entrepreneurs. According to GEM, only 31.2% of young Welsh non-entrepreneurs believed they possessed the skills necessary to start a business, compared with 47% across the UK.
This substantial difference raises fundamental questions about how effectively the education system and business support infrastructure are preparing young people to pursue enterprise as a realistic career choice.
For too long, much of the debate about entrepreneurship education has focused on raising awareness, celebrating successful founders and encouraging positive attitudes towards business creation. Such activities have their place, but inspiration alone cannot develop the practical confidence required to establish a business.
That confidence comes from experience, and young people need opportunities to identify customers, test demand, understand pricing and discover whether an idea can become commercially viable. Schools, colleges and universities should therefore have a clearer responsibility for developing entrepreneurial capability through practical enterprise experiences across different subjects and disciplines.
The objective should not be to persuade everyone to become self-employed but to ensure that those with the ambition to establish businesses possess the knowledge, confidence and opportunities to do so.
Role of universities and finance
Universities have a particularly important role as they bring together talent, specialist facilities and commercial relationships that could support new ventures across many sectors. Yet too much attention is directed towards research commercialisation and spinouts rather than the broader potential of students and graduates to create businesses in professional services, creative industries and the application of existing technologies.
Every student or graduate with a credible commercial idea should have access to mentors, appropriate facilities and modest early-stage funding to test that proposition, with support continuing beyond graduation. Universities should also be assessed on the businesses they help establish, their subsequent development and their continuing economic connection with Wales.
Finance requires similar scrutiny. Although GEM does not demonstrate that funding explains the participation gap, Welsh Government should examine whether existing financial products meet the needs of prospective founders.
For many, the immediate requirement is not a substantial loan or equity investment but relatively modest support for customer research, product development or initial trials. Small, targeted grants could help individuals establish commercial viability before making larger commitments, with successful ventures progressing towards repayable finance or equity as their requirements develop.
Access to customers and strategy
Access to customers must also be central to this approach. Business advice and mentoring are valuable, but neither can substitute for securing paying customers and demonstrating that a product or service meets their requirements. Public bodies could create appropriately-sized paid trials through transparent competition and proportionate procurement processes, while larger private companies should be encouraged to develop supplier partnerships that provide emerging Welsh businesses with genuine commercial opportunities.
However, individual initiatives will achieve relatively little without a coherent national approach and clear accountability. Welsh Government should publish an entrepreneurship strategy setting out how it intends to close the participation gap with the UK, particularly among younger people, supported by measurable ambitions for entrepreneurial activity, practical capability and the development of viable new businesses.
Crucially, success should be judged by outcomes rather than activity. The number of people attending workshops, receiving advice or participating in awareness campaigns tells us relatively little about economic effectiveness. What matters is whether those interventions result in more businesses being established, surviving, securing customers and subsequently growing. Independent evaluation should identify which programmes make a demonstrable difference, with resources redirected from those producing little lasting impact.
None of this means that Welsh entrepreneurship policy has necessarily failed. Indeed, the improvement in entrepreneurial activity over recent years suggests that Wales has a stronger foundation on which to build. But there is a considerable difference between recognising progress and accepting it as sufficient, particularly when the rest of the UK is performing considerably better.
The danger is that Wales becomes accustomed to measuring success against its own past rather than the achievements of its competitors. That would be a serious mistake for an economy already facing longstanding challenges in productivity, business investment and the creation of higher-value employment.
The question for Welsh Government is therefore no longer whether entrepreneurial activity has improved, but why Wales remains so far behind the rest of the UK and what ministers intend to do about it.
If closing that gap is genuinely a national economic priority, ministers must set out the practical changes, resources and responsibilities required and, above all, allow their policies to be judged not by the programmes they announce or the money they spend, but by the businesses that are actually created and the economic opportunities those businesses generate.
