For a growing number of Gen Z workers, financial security no longer starts with landing a corporate job and steadily climbing the career ladder.
Instead, some are building businesses, freelancing, taking on side hustles and creating multiple income streams as they navigate a tougher early-career job market, high living costs and uncertainty over how AI will affect entry-level work.
Applications by Gen Z adults to start new businesses rose about 66% over a recent 12-month period compared with the previous year, according to data cited by Bloomberg. The trend comes as young workers face fewer entry-level opportunities and increasingly see entrepreneurship as a way to gain more control over their income and careers.
The attraction is straightforward: a business can potentially create an income stream that is not tied directly to a salary, employer or promotion cycle, but that does not mean entrepreneurship is an easy substitute for employment. Starting a business transfers risk from an employer to the individual, and young founders can face unstable revenue, limited savings and high personal financial exposure.
The Corporate Ladder Looks Less Certain
The appeal of entrepreneurship is growing as AI shrinks available entry points into traditional employment. In fact, a report from ZipRecruiter found that nearly 37.5% of recent and soon-to-be college graduates were considering starting their own business. Another 32.5% were considering gig work and 28% were exploring freelance work.
That interest comes as young workers face growing uncertainty about where they fit into an economy increasingly influenced by AI. Following the introduction of ChatGPT, hiring of workers ages 22 to 25 declined 19% in industries with higher exposure to AI.
But Gen Z is not necessarily abandoning traditional employment because AI has already eliminated most jobs. For many young workers, the concern is that the first rung of the career ladder is becoming harder to reach.
That is helping make entrepreneurship more attractive, particularly when technology lowers the cost of getting started.
Entrepreneurship Becomes a Second Route In
Gusto recently reported that Gen Z entrepreneurs started more businesses than Baby Boomers in 2025 for the first time in its data. Its analysis of more than 500,000 small businesses also found that Gen Z founders are particularly likely to use AI when building their companies, although many of their businesses remain concentrated in hands-on, in-person industries.
69% of Gen Z adults consider business ownership part of the American Dream. Among Gen Z respondents who want to own a business, 80% said entrepreneurship would give them greater control over their destiny.
That desire for autonomy is showing up among young people who are building businesses alongside other work rather than immediately trying to replace a traditional job.
The U.S. Bank’s 2026 survey of small-business owners found that Gen Z owners were more likely than older generations to have started their businesses as passion projects or side hustles. Nearly three-quarters of Gen Z owners surveyed reported business growth during the previous year, although the group also reported significant financial pressure.
AI Is Both the Threat and the Tool
AI adds another dimension to the trend. For young workers, AI can make entry-level employment feel more uncertain while simultaneously making it easier to launch a small business. Generative AI can help entrepreneurs handle tasks that once required specialized employees or outside contractors, from producing marketing materials to building basic websites and handling customer communications.
A recent KPMG survey found that Gen Z interns expect roughly one-third of their future jobs to be automated or enhanced by AI. At the same time, 78% said they felt at least somewhat prepared to work alongside the technology, and nearly 30% said their current assignments already involved AI assistance.
That creates an unusual dynamic for young workers: the technology they worry could reduce opportunities is also giving them tools to create opportunities of their own.
What It Means For The Workplace
The rise of Gen Z entrepreneurship could make traditional career progression less central to how young workers think about their working lives.
A young employee may hold a full-time position while running an online business, freelancing or building another source of income. Another may choose contract work specifically because it leaves time to pursue a separate venture.
That could make flexibility more valuable. Employers competing for Gen Z talent may increasingly need to think about autonomy, schedule control and opportunities to build skills rather than relying solely on the promise of a conventional promotion path.
But the trend should not be mistaken for a wholesale rejection of employment; most young workers still need stable income, benefits and predictable work. The growing interest in entrepreneurship may instead reflect a desire to avoid putting all of their financial security in one place.
For Gen Z, the traditional career ladder may still be worth climbing…but they’re building their own, just in case.
