What is the state of entrepreneurship within our universities?
The Higher Education Business and Community Interaction Survey (HE-BCI) is the main vehicle for measuring the volume and direction of interactions between 海角视频 higher education providers and business and the wider community.
It collects data on student start-ups, which includes all new businesses started by students currently registered at the reporting university or who have left within the last two years. However, these businesses are only counted where there has been formal business or enterprise support from the university.
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The latest data released earlier this month shows that 4,908 student start-ups were created in 海角视频 universities in 2022-23, an increase of 3.5% on the previous year. The leading institutions in student start-ups were the University of the Arts, London (567), Kingston University (214), the Royal College of Art (200), the University of East London (177), and Falmouth University (155).
There are currently 18,807 active student start-ups (define as those that have survived at least three years plus those which have been active for between one and three years). These employ 57,520 employees, have a collective turnover of £4.9bn, and have generated £1.35bn of external investment.
And what is the situation for Welsh universities?
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In Wales, 397 student start-ups were created in 2022-23, an increase of 10% on the previous year. Whilst the University of South Wales has the highest number of student start-ups, it has experienced a significant decline of 22% as compared to the previous year following several years of growth since 2017.
The biggest increase was by the University of Wales Trinity St David’s which grew its student start-up population by 65%, whilst Wales’ largest university – Cardiff University – only produced 41 student start-ups out of a student population of over 34,000. Aberystwyth University generated only two student start-ups in 2023, the lowest number in Wales.
Whilst Wales has 14% of active firms across the 海角视频, their relative performance is exceptionally poor compared to those across the 海角视频. For example, whilst the average turnover of all 海角视频 student start-ups is £262,000, it is only £19,292 in Wales and the average number of employees per firm is also lower (3.1 海角视频 versus 1.3 Wales). Worst of all, the average investment raised per start-up is only £138 compared to £72,000 for the 海角视频, which equates to a paltry 0.03% of all investment raised by 海角视频 students in 2022-23.
It also means that only 0.3% of the 150,000 students studying at Welsh universities are starting a business and if that could only be increased to only 1%, that would mean an additional 1200 new businesses being created every year.
To be blunt, this performance simply isn’t good enough. Yes, it will be argued that Welsh universities are producing proportionally higher numbers of student start-ups than expected, but more needs to be done to ensure they make a difference to the Welsh economy in terms of wealth creation, new jobs, and attracting investment.
We have some incredibly talented young people with great ideas emerging from our universities, and they need proper support to build their business. There is certainly a role for a graduate enterprise programme – like the ones run by the Welsh Government twenty years ago - that could provide funding for the best start-ups emerging out of our university.
And given its relatively poor record on supporting new businesses, there is also no reason why the Development Bank of Wales couldn’t create a new funding package to support student start-ups which could include a mentor provided by Business Wales.
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And given how our city and growth deals across Wales are constantly highlighting the importance of universities in driving forward innovation within their respective regions, greater support for accelerating ideas outside the narrow confines of a few sectors is long overdue.
Indeed, if those Welsh universities that are struggling financially to support entrepreneurship within institutions do not consider this to be a priority, then the creation of a national graduate and student entrepreneurship programme could be the solution to improving this with incubators located in every university town and city in Wales.
The good news is that Jeremy Miles – the new economy minister - did promise, during the recent Wales Labour leadership campaign, to introduce a range of innovative proposals to explore new financial incentives for graduates to set up businesses and ensure that Welsh universities and colleges, the investor community, businesses, entrepreneurs, and the Welsh Government are closely aligned on national economic priorities.
Certainly, such a commitment to developing a more entrepreneurial Wales is to be welcomed and would represent an investment not only in the future of our young people but also in the future of the Welsh economy.”