The Business World: The new business world belongs to the young

SUMMER IS drawing to a close, schools and universities are going back, and the world of work looms. But the world of work nowadays looms not just for people already in jobs. It looms, too, for students in a way that would have been relatively unusual even five years ago.

Several things have happened which together have transformed the relationship between education and work. There are at least five such changes:

First, the gradual squeezing of state support for students (and the introduction of tuition fees) has meant that more and more of them take part-time jobs to help pay their way through college. Second, this has become possible because of the increased availability of part-time jobs, itself a function of the long boom and a function of the structural changes in the labour market.

Third, the idea of a career in business (as opposed to public service or the professions) seems to have become more fashionable among the young. At a university level there has been a shift in demand for courses with a large vocational element at the expense of non-vocational courses: business studies as opposed to economics.

Fourth, there seems to be much more evidence of entrepreneurial activity among the very young. This does not just include the people in their late twenties and their thirties who are setting up the high-tech businesses discussed here, though they constitute an extremely important group. The really remarkable feature is the entrepreneurship of the 16- to 25-year-olds. Many more university students (and some sixth-formers)seem to be using their spare time to try out some business opportunity. These ventures often spring from existing university activity: for example, setting up a theatre company which will enable the student drama society to put on a show at the Edinburgh Fringe. Others are classic service businesses, taking advantage of the extraordinary boom in demand for personal services created in the long period of solid growth: a lot of these are in the entertainment/leisure areas. Others are hi-tech, built round the twin facts that while many 18-year-olds already have computer skills that command a high price in the marketplace, wise 18-year-olds also know they have to remain in education if they are to acquire skills which will command an even higher price in a few years. So earning a little through part- time consultancy has become almost a norm for technically-adept university students.

Finally, the development of the personal computer has meant there has almost certainly been a fall in the entry cost of starting a small business. The business does not need to be in computers or in high-technology: the function of the PC is to enable small businesses to manage themselves with a competence that would previously have been impossible, by performing the billing, accounting and other practical tasks that used to be done with professional help.

It is not easy to start a business. But it is easier than it was 10 years ago. If this is right - and clearly something is happening in attitudes towards business among the young - then there are profound implications for the business community. There is, for a start, an important opportunity. Any large corporation wishing to sell services to small start-up businesses must recognise their key clients may be very, very young. Thus while banks have long tried to attract student accounts on the correct grounds that these customers are likely to stick with them for many years, they think of them as retail accounts. They find it difficult to accept the idea that young people may be potentially prime business account holders too.

Next, businesses employing students will have to recognise that every time they take on an 18-year-old for a short contract they are being judged. Companies put a lot of effort into identifying suitable future staff when they interview students on the "milk round". But the more experience students have of working in a company, the more the companies' reputations will be determined by the way they treat their temporary staff and the less by what they say about themselves on graduate employment programmes. The word gets round swiftly that company X is a good employer and company Y is a bad one.

Beyond that, there are opportunities for companies (and universities) to capture and develop the business zeal among the young. For example, many companies are already working closely with educational establishments to harness the brains there. There are lots of joint projects, lots of instances where companies back research and where a development in a university lab is taken up by a company and the proceeds split. But these ventures are almost invariably hi-tech and research-driven. The professors set up the ventures.

There is nothing wrong with this. In fact, the university/company joint venture is almost certainly going to become a much more important aspect of commercial life and there will be big prizes for companies, educational establishments and, indeed, countries that get this right. But there is a further opportunity, if the students are becoming more entrepreneurial.

That opportunity lies not just for joint ventures between companies and the professors with their research labs, but between companies and the students who want to start something. This is not charity, backing young entrepreneurs because that benefits society, though society ought to benefit.

Good companies ought to be able to make money out of the fact that young people have become more interested in making money. The problem is how to create a structure which enables a company to place a few small bets on bright young people without incurring a great administrative burden: to create a nursery for talent, which might, just might, enable it to generate new revenue streams five or 10 years down the line.

That, from the point of view of established large companies, is the biggest issue. How do you keep transforming large companies into something new, so they do not slither into decay and decline? The answer is, surely, by backing the bright young people.