Report outlines the impact of universities on regional economies and entrepreneurship

Although universities contribute to one in every hundred new business births in the UK, but 35 percent of universities did not contribute to the production of a single graduate start-up last year, according to a new report from Localis. It claims that while there are pockets of excellence in the way universities support enterprise and entrepreneurship across the country, too many of them are doing too little. Published in partnership with University College London (UCL) and the University of Huddersfield (UoH), the report explores what more can be done to encourage university entrepreneurial activity and its role in local economies.

In a series of recommendations, the report argues that universities should make entrepreneurialism a strategic priority, drawing on best practice to provide every student the opportunity to develop enterprise skills, identifying and nurturing entrepreneurship across all disciplines and enabling access to support as businesses grow. With the risks, challenges and opportunities Brexit presents, it calls for new financial support and incentives to replace European Union and UK local growth funding and for independent investment in start-ups outside of London to increase by incentivising greater regional and scale-up funding and increased alumni investment. And through the new Knowledge Exchange Framework process, it calls for local economic impact to be assessed and rewarded in the allocation of Higher Education Innovation Fund (HEIF) and related Government growth funding.

Co-author of the report and chief executive of Localis, Liam Booth-Smith, said: “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, said: “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.”

Recommendations to vice-chancellors:

MAKE ENTERPRISE AND 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 AND 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.

Image: Keele University which has a growing Science and Innovation Park