Universities, Economies & Entrepreneurs: How Higher Learning Institutions Can Affect the Business Landscape

There are a great many things which can affect the viability of any given location for businesses both established and newly-launched. From transport links to local amenities to talent pools, there are countless factors to consider. Playing into the latter to some extent is the presence of higher learning institutions, which given their very nature you would expect to have a hand to play in cultivating entrepreneurship and general business savvy among the local population.

Such was the subject of a new report from Localis, published in partnership with University College London (UCL) and the University of Huddersfield (UoH), which aimed to explore what more can be done to encourage university entrepreneurial activity and its role in local economies.

The report asserts that while universities do indeed contribute to one in every hundred new business births in the UK, 35% of universities failed to contribute to the production of a single graduate start-up last year. This seemingly indicates that although there are isolated areas of success in regards to universities and their role in entrepreneurship, far too many institutions are lacking in their efforts.

Liam Booth-Smith, co-author of the report and chief executive of Localis, said concerning the report, “The unfortunate truth is that too many UK universities simply do not act in this space. With the risks, challenges and opportunities that Brexit presents, promoting enterprise and entrepreneurship in our universities should be an important part of the government’s national policy agenda and central to the development of local industrial strategy.”

Report author, Localis visiting fellow, David Godfrey, also commented, “Our comparison between universities in London and Yorkshire reinforces this disparity in external investment, with start-ups at London institutions attracting £35.5m in 2015/16 against just £1.3m for start-ups at Yorkshire universities, or a factor of almost eight times as much on average per institution. Through local industrial strategies, there is a major opportunity to bring good ideas together with London investment by successfully packaging spin-out schemes to investors, as Manchester has successfully done.”

Not simply a vessel to voice criticism however, the report goes on to make a series of recommendations relating to how the issue may potentially be resolved. Specific recommendations made within the report read as follows:

Make Enterprise & Entrepreneurship a Strategic Priority

Recommendation One: Every student should have the opportunity to develop enterprise and entrepreneurship skills and learning, both within the university curriculum and outside it. Universities must find ways to identify and nurture entrepreneurs across all disciplines and at all stages.

Recommendation Two: Enterprise and entrepreneurship must have a mandate. Through strong corporate leadership within universities, the university offer to student and graduate entrepreneurs must be strategic and co-ordinated.

Recommendation Three: Universities should review their ‘cut off points’ for enterprise and entrepreneurship support in order to play a more active role in scaling up of businesses not just the pre start-up and start-up phase.

Recommendation Four: Incubation units and workspace should be opened up to local entrepreneurs. This will support local SMEs, potentially increase revenue for enterprise units, encourage throughput and provide student entrepreneurs with an immediate and potentially valuable peer network.

Influence the Local Economy

Recommendation Five: Universities’ position as anchors in their local economies should be explicitly recognised in the Government’s Common Framework for devolution and a clear link made to university enterprise and entrepreneurship in the Government’s Review of LEPs. It should be promoted in local economic strategies.

Recommendation Six: Universities should provide a “swing door into the local economy” with clear account management of services across the university and alignment with external enterprise and entrepreneurship support through their local Growth Hubs.

Recommendation Seven: Government should create conditions that diversify the current capital model to increase independent investment outside of London, retaining existing tax reliefs but incentivising regional and scale-up investment and promoting alumni funding. Vice Chancellors should work with their LEPs, City and County Councils and Mayors to package regional opportunities to pitch to investors.

Recommendation Eight: New financial support and incentives should be developed to replace funding for enterprise and entrepreneurship currently available through Local Growth Fund and European funding streams.

Measure & Reward Impact

Recommendation Nine: Local economic impact should be assessed and rewarded through the new Knowledge Exchange Framework and in the allocation of HEIF or related Government growth funding. Universities should first be required to provide commentary illustrating programme impact, with specific impact metrics agreed and introduced to an agreed timetable. National data should be robust and consistent

Recommendation Ten: Universities should be incentivised to produce “impact start-ups” and entrepreneurs, demonstrating they are growing local and national economies, with funding increasingly reflecting their success in delivering local economic growth. New longitudinal measures should be developed to measure longer-term impact and encourage the retention of links with student and graduate start-ups to support their ongoing development.

Sam Bonson

Sam is an aspiring novelist with a passion for fantasy and crime thrillers. He is currently working as a content writer, journalist & editor as he continues to expand his horizons.