Over the last few years, universities have evolved to provide an ideal breeding ground for entrepreneurship due to their rich reservoirs of knowledge, diverse talent pool, and innovative culture. Not only do they offer access to cutting-edge research, intellectual property, and resources that can be leveraged to create new products and services, but universities can also facilitate a collaborative environment where aspiring entrepreneurs can network with peers, mentors, and industry professionals.
Universities: Fostering Entrepreneurial Ecosystems
An increasing number of institutions also provide support through business incubators, entrepreneurship curricula, and funding opportunities for graduate start-ups. This supportive ecosystem not only encourages students and faculty to pursue entrepreneurial ventures but also nurtures the skills and mindset needed to thrive in the competitive business world.
The Ambitious UK Start-Ups Report, sponsored by Starling Bank, draws from data gathered from 1,219 applicants for the 2023 UK StartUp Awards which recognise the best new firms across the UK. Whilst the study shows that founders of new businesses can come from a range of diverse backgrounds, there is a notable trend regarding the influence of university education in fostering entrepreneurship.
Educational Influence on Startup Founders
According to Universities UK which represents all higher education institutions, it is estimated that nearly 20,000 businesses and charities will be formed from universities in the next five years and that in 2019-20 alone, enterprises that had emerged from the sector employed over 70,000 people and turned over nearly £8 billion.
Whereas the latest census showed that only a third of the UK population had degree level qualifications or higher, the Ambitious UK Start-Ups Report shows that 75% of start-ups are led by founders who have a graduate degree or higher suggesting a strong relationship between graduate education and entrepreneurial activity.
Not surprisingly, the highest proportion of graduate founders are found in those that have launched businesses in new industries with 66% of all entrepreneurs qualified to a doctoral level running such firms. There is also a higher level of graduate education (81%) amongst female founders compared to male founders (69%).
Diverse University Backgrounds Fueling Innovation
Examining the educational background of start-up founders, our study shows a strong representation from post-1992 institutions with 36% of the start-up founders educated at those new or modern universities that are increasingly fostering environments that encourage innovation and enterprise amongst their students and staff. This is not surprising given that their role as business-facing institutions producing graduates in vocational disciplines and applied research. This finding is supported by the Higher Education Business and Community Interaction Survey (HEBCIS) which has reported similar results which highlights the significance of these newer institutions in creating graduate enterprises.
Russell Group universities, known more for their research intensity than entrepreneurial focus, are making a significant contribution to graduate enterprise. These institutions (which include some of the world’s top universities such as Oxford, Cambridge, and Imperial College London) have produced 31% of the start-up founders in this study. This not an unexpected finding with evidence that UK universities are world leaders in commercialising their technology – in 2020/21 alone, businesses spinning out of the twenty-four Russell Group universities created 33,000 jobs and brought in £4.9 billion of investment to towns and cities across the country.
Therefore, the report underscores the pivotal role that universities can play in fostering entrepreneurship. With three quarters of start-up founders holding graduate degrees or higher, and a strong representation from both post-1992 institutions and Russell Group universities, it’s evident that higher education is a significant catalyst for entrepreneurial activity and with a growing focus on innovation, universities should not only be centres of learning but vital engines of economic growth, job creation, and societal advancement.
