As unemployment rises, more students turn to start-ups

As New Zealand’s job market has tightened, university students are looking beyond traditional employment pathways.

Some students have decided to launch their own start-ups, testing the waters of entrepreneurship.

“The job market is tough, and starting something can be a way of earning income when traditional employment isn’t available,” says AUT business lecturer Sandra Barnett.

Barnett says one of the main reasons students are turning to entrepreneurship is because they “like the idea of being in control of their own work and lifestyle”.

“’Some students are genuinely passionate and want to work for themselves. Others feel pushed into it because they need to find a way to earn money.”

AUT student Will South, who is the co-founder of two businesses, Scale up Media and Forge football academy, says: “I think university is the cheapest your life’s gonna be . . . I can take risks.”

South says while the tight job market is “definitely a factor . . . I’d rather just work for myself.”

In the March 2026 quarter, youth unemployment rate was 14.4 per cent, up from 13.3 per cent in the December 2025 quarter.

Economists are also warning the unemployment rate is likely to get worse in the coming months, as reported by RNZ.

Because of this outlook, the idea of start-ups has become more tempting for young students.

“Start-ups can work…but in general they are a risky path. That said, I can understand why more students are choosing to do it now,” Barnett says.

“Students mostly see the success stories. You don’t hear as much about the failures, even though there are many.”

AUT ventures representative Cindy Luo says only a small per cent of student ideas become real businesses.

“Depending on how you define success, it might be around 1-2 per cent. Out of maybe 10 or 20 ideas, only one might still be operating after a few years or generating revenue.”

“There’s also the risk factor. Starting a business takes time, energy, and resilience, with no guaranteed outcome.

“Undergraduate students are often entrepreneurial, they’re more willing to take risks… they have the time and energy to try something like that.”

New Zealand has  more than 37,000 startups, according to Tracxn.

South says there are a  lot more resources available now.

“There are so many ways to make money online.

“It's becoming easier to run a business and actually run a successful one.”

-----

Our journalists sometimes use AI tools which are checked by humans for accuracy. 

AI was used to transcribe audio from the interview.