Look to universities to nurture entrepreneurship in our regions
There has been mixed coverage of British entrepreneurship in recent months. There are many reasons to celebrate – 2017 saw record VC investment, Atomico ranked the UK top in Europe for tech, and Forbes named us the best country in the world for business. But concerns linger – new business formations are down, business confidence is faltering, and, until a deal is struck, uncertainty around access to European talent and investment post-Brexit remains.
A welcome boost in optimism was found in NatWest’s conference centre last week, where university incubator managers convened from across the UK for the Centre for Entrepreneurs’ inaugural conference of the Incubator and Accelerator Network – a community to help increase the scale and impact of business incubation programmes.
Chief Secretary to the Treasury Liz Truss endorsed the network, and, in a speech to attendees, praised the “exciting” work they are doing to utilise Britain’s world-class universities to the benefit of the economy. She also affirmed the government’s commitment to EIS, SEIS and British Business Bank schemes that have done so much to boost entrepreneurship.
The network was launched by the Centre for Entrepreneurs in late-2017 following the publication of ‘Putting the uni in unicorn: the role of universities in supporting high-growth graduate startups’. In the report, we suggested universities can boost graduate retention, job creation and economic growth in their regions by providing business incubation to graduate entrepreneurs.
This is not a new concept, as our founding members prove. The Hive at Nottingham Trent University has supported over 400 startups since its launch in 2001. Meanwhile, Manchester Met’s Innospace, and the University of Plymouth’s Formation Zone both recently celebrated a decade of operation, incubating over 600 startups between them.
Institutions may compete for students, but there is a spirit of collaboration among them when it comes to business incubation. BSEEN – a partnership between Birmingham’s four universities – has simplified business support for local students and graduates, helping over 230 entrepreneurs get started since 2012. Further south, SETsquared – a partnership between the universities of Bath, Bristol, Exeter, Southampton and Surrey – has helped over 1,000 startups, and in 2015 was named the best university incubator in the world by UBI Global.
Universities are also investing in bigger and better incubation spaces. Last year, the Duke of York opened Imperial College’s new 18,000sq ft incubator at its White City campus, while Cambridge opened its third ideaSpace incubator in the city. The Royal College of Art’s new £108m building announced last month will double the space of its incubator, InnovationRCA when it opens in 2020.
And incubator managers see potential impact far beyond their campus. Many serve as the hub for the local startup ecosystem, hosting events and convening the local community. Teesside University’s Steve Dougan speaks passionately about Launchpad’s role in graduate retention and economic growth in the North East – a major strategic goal for the university. Meanwhile, the London College of Fashion’s Centre for Fashion Enterprise will drive regeneration in Stratford when it moves into the Olympic Park’s cultural quarter, alongside the V&A and Sadler’s Wells.
There is evidence universities’ investments in incubation are paying off. SETsquared’s startup portfolio has created over 9,000 jobs, and its Bristol-based companies alone have raised £130m investment. Alumni entrepreneurs are also increasingly donating to their alma mater to help the next generation of founders. Leeds alumni fund 16 £3,000 enterprise fellowships for student entrepreneurs, while the University of Buckingham recently received £1.8m from an entrepreneurial alumna to create an Innovation and Enterprise Centre.
There is of course more to do.
Talent remains an issue. Angel investors and VCs who addressed the conference made clear they almost exclusively back companies with two founders, not one. Universities and incubators can do more to match technical and business graduates to form founding teams. They can also help encourage graduates from all faculties to join startups as founding employees and help them scale.
Incubators outside major cities also raised challenges with the vibrancy of local angel networks, and efforts to attract London-based investors to visit their startups. Our research paper ‘Nation of Angels’ with UKBAA in 2015 suggested 58% of angels now invest outside their home region, so initiatives to connect investors and promising startups could help tackle this.
But overall, Britain’s universities provide a source of pride and inspiration – as centres of academic excellence, and, increasingly, as centres of entrepreneurial excellence.