Ask the average person in the street to guess the economic value of the UK’s higher education sector and other than a confused look, you’ll likely get a massive underestimation.
£500 million? £1 billion? £10 billion?
Actually, the sector is worth a staggering £116 billion to the UK economy; a figure that rises to £130 billion when you include the spending of international students. To add some perspective, that’s only slightly less than the financial services sector (£173.6 billion) and more than double the contribution of media and entertainment to the UK economy (£43 billion).
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Against this backdrop, the sector’s distinctiveness is grounded in how it supports and cultivates start-up companies. Over the next five years, it’s estimated that more than 20,000 of them will emerge from colleges and universities across the UK. It’s a high number, a figure that academics – regardless of discipline – should not ignore. Here, we examine why.
The higher education sector helps start-ups survive – and thrive
We know that start-ups with links to universities are much more likely to survive than comparable businesses. Graduate start-ups and university spin-outs generate billions in turnover every year across the UK. University collaboration assists budding entrepreneurs in translating innovative ideas into novel products and services, helping start-ups compete internationally. It’s about the education we provide and the expertise we can contribute. All of it melds together to help an individual go from thinking their idea is a good one, to knowing, based on evidence.
Academics play a catalytic role in the start-up ecosystem
Entrepreneurship is now embedded right across the UK. We can see this in the high-growth start-up development and business survival rate figures. Academics are ideally placed to foster entrepreneurship among their students. They play a nurturing role and can help build solid foundations of knowledge with their wealth of expertise. For potential entrepreneurs who wish to translate their ideas into viable and sustainable business ventures, this help can be invaluable.
Educators of any discipline must be aware of the support available to assist start-ups at their institution. Something said during a lecture or tutorial could be the spark a student needs to take their ambitions forward.
Academics also make the effort to create opportunities on their own, providing extracurricular support and encouragement through things such as start-up competitions, summer schools, entrepreneurs in residence and mentorship programmes. These may not form part of the academic qualification, but they are important when it comes to developing awareness, interest and inspiration.
An example of a typical student journey that we see in our institution is a student who comes to us with an idea but doesn’t know where to go next. The first step is usually to undertake an enterprise module which helps them to develop their entrepreneurial knowledge and mindset. From this, they apply what they have learned and enter one of our internal business competitions which, with mentoring support, allows them to develop their idea and their entrepreneurial skills. They then apply for seed funding and expert support from the university and, at this point, may also enter external enterprise competitions which provide additional help. At the appropriate time, the student will be introduced to relevant business support agencies which will provide additional assistance as they move towards starting the business.
It’s not only about understanding business
We need to educate students about entrepreneurship, but it’s also worth noting that a key reason for the success of university-linked start-ups is related to our unique position and mission. University courses emphasise research, innovation and development – crucial skills for entrepreneurs in today’s marketplace. Idea generation, innovation, understanding of societal context and trends and even market-testing are all encountered in various formats. This contributes to the logical development process for start-ups, and ties in once again to the suggestion that all academics should be alert to the role they could play in the formation of one.
The landscape is changing – and new solutions are required
Our careers, experience and wider research have all emphasised the importance of enterprising cultures within higher education. Embedding entrepreneurship and business-related start-up programmes into the curriculum typically leads to significant expansion of start-ups. Universities must continue to make steady progress, evolving the support they provide.
The reality is that we live in a rapidly changing business landscape right now, with obvious, yet unresolved challenges. How will AI impact the average business? What about climate change? In times of economic turmoil, how can a start-up adapt and thrive? Answers to these questions will inevitably be formulated at universities – making the role we play concerning businesses even more important.
Looking to the future, universities have a key role to play in developing entrepreneurial graduates who, as entrepreneurs, will add value to the businesses they start or, as intrapreneurs, will bring about change in the organisations that employ them. The challenge for the university is to ensure that the support they provide both inside and outside the classroom remains relevant and meaningful and is aligned with the realities of the world of business.
Alan Murray is a reader in enterprise; Robert Crammond is a senior lecturer in enterprise and Kingsley Omeihe is a senior lecturer, all at the University of the West of Scotland.
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