The tycoons of tomorrow?

It's like a scene from The Apprentice. One group has started a car washing business and is busy deciding on the rates it will charge. A second is preparing home-made buns and biscuits. A third has had the bright idea of setting up a shoe shine service.

The object of the exercise is to see who makes the most money from their business by the end of the week. At the end of the first day, the car washers are having to revise their strategy, just like some of Sir Alan Sugar's protégés. They thought the group that charged the most for its services would win but then found that their high-priced car washes put clients off and that the biscuit makers were ahead in the profit stakes.

This is Rawmarsh Ashwood junior school in Rotherham, south Yorkshire, a borough that has launched a pioneering strategy aimed at teaching "enterprise awareness" to youngsters from the ages of four to 19.

The exercise at Rawmarsh raised £230 from the various companies. It was the shoe cleaners who learned the harshest lesson of all: do your market research before starting out. Most children no longer wear lace-ups or slip-ons that can be cleaned by a shoe-shine girl or boy. All wear trainers, which meant that it was only the teachers who could take advantage of the shoe cleaning service.

Behind the exercise lies the desire to change a British culture that has been hostile for a century or more to the notion that it is acceptable to be an entrepreneur and make a profit. The hope is that the next generation will become more entrepreneurial like their American counterparts. The idea seems to be catching on.

Andrew Turner, at Herringthorpe Junior School, another school pioneering the initiative, says: "The idea is for the kids to come up with a good idea and then sell their product or service to both someone they know and then someone they don't know."

His headteacher, Jane Fearnley, adds: "It doesn't matter if they fail. There are lessons to be learned from failure that can be put to good use in the future."

What Rotherham is doing today could become a blueprint for the education system of the future. It is an open secret that, if Gordon Brown succeeds Tony Blair as Prime Minister, he will emphasise the importance of teaching enterprise education and entrepreneurship in schools.

Senior Treasury officials were visiting schools in the project this week to see what lessons they could learn before rolling out an ambitious programme nationwide. A report is being prepared in the Treasury about what schools should be doing to put more emphasis on enterprise education. John Healey is the Labour member for Wentworth and one of Brown's Treasury ministers. It is no coincidence that he is right behind the scheme. "The driving forces of the modern economy are innovation, competition, skills and enterprise," he says. "If we are to create a culture of enterprise for all, we must start with our schools, across the full range from primary to late secondary and college years.

"While virtually all young people now do work experience at some stage in their school years, few gain any experience of enterprise and it is those in less affluent areas who are missing out most often."

His words ring true in Rotherham, a town that relied for many years on sons following their fathers into the steel industry or down the pits. Both sources of income have now dried up, with the result that more and more young people are having to become more imaginative in their search for employment.

Businessman Andy Pickles runs The Music Machine, a firm which supplies DJs for functions. He's a strong supporter of the programme and agrees that lessons in entrepreneurship are sorely needed. "We need to get the message across that there are all those opportunities out there - if the kids can just grasp them," he says.

But there is another reason for grasping the opportunity to teach enterprise in the classroom. According to a report from the Institute for Public Policy Research (IPPR), lessons on personal finance and budgeting in schools could make children richer by £32,000 a year between the ages of 35 and 49. The findings are based on a survey in the United States of how financial education had led to improved job prospects.

"It pays to get clued up," says Miranda Lewis, senior research fellow at the IPPR. "Lessons that teach young people the basics of personal finance, like how to calculate interest, household budgeting and understanding mortgages, can help them make the right decisions later in life and avoid debt problems."

So, the initiative being pioneered in Rotherham could help to make people richer as individuals and the country richer as a whole. Already 100 schools and colleges are offering certificates in personal finance - and the Institute of Financial Services is negotiating with civil servants with a view to offering a stand-alone GCSE in the subject. In addition, ministers have said that personal finance will become a compulsory part of the national curriculum in 2008.

The good thing about Rotherham is that all the 11-year-olds in the project appear to be having fun, which is more than can be said of some would-be apprentices being supervised by Sir Alan. According to Ms Fearnley, the school is building on things that it already did - and taking them that little bit further. In one lesson, children were being taught about souvenirs. They were asked: why do you have souvenirs and what do you want from them? The following week they took part in a residential course in Northumberland - visiting castles - with a view to making and selling souvenirs of the visit.

"It should show them they want memories of what they have seen and that the souvenir should be attractive," one teacher says. "It should help them be more selective in future - rather than just buying everything that's there."

Lynda Saunders, the deputy head of Rawmarsh Ashwood School, says that the mini companies exercise has been a great hit. "They couldn't wait to do it again," she says of the children. In fact, when the pupils were told their week-long residential trip to Scarborough was threatened because the school could not afford to send a full-time teacher to look after them, they set about fund-raising themselves. They wrote to local firms, organised a bring-and-buy sale at the school and within a few weeks had raised £876. Problem sorted. "The teacher could probably have stayed in a five-star hotel," says Joanna Duffin, another teacher at the school.

As the project progresses, "Rotherham Ready" - as it is called - will establish a "young person's chamber" in every primary and secondary school to be run along the lines of a Chamber of Commerce to talk about business. Every school will also appoint an "enterprise champion" from among the staff to ensure the project is fully implemented. And, what about four-year-olds? How do you interest them in enterprise? One school used the theme of a wedding, explains Mike Garnock-Jones, the programme director. They asked the children to choose a vicar for the service. Six were selected as potential candidates and interviewed. "It taught them all about recruitment techniques and how to conduct an interview," he explained.

Remember, what Rotherham is doing today, a Labour government led by Gordon Brown could be introducing to every school in the country tomorrow.

Teaching the profit motive

From this month, schools will teach personal finance as part of personal, social and health education and citizenship. According to the Qualifications and Curriculum Authority, the exams watchdog, this means that:

five to seven-year-olds will be taught that money comes from different sources and can be used for different purposes;

seven to 11-year-olds will be taught how to look after their money and realise that future wants and needs can be met through saving;

11 to 14-year-olds will be taught what influences how we spend or save money and how to become competent at managing personal finance;

14 to 16-year-olds will learn to use a range of financial tools and services, including budgeting and saving. Citizenship classes will teach the rights and responsibilities of consumers, employers and employees. RG