Why universities are the best places to start a business

The ConversationArticle originally published on The Conversation.

Creative ideas and how we turn them into successful business ventures and social enterprises are vital to the UK’s global competitiveness. But how do we best support this?

Of course there are many different ways to start a business. But I strongly challenge those who say point blank that a university experience is a waste of time for future entrepreneurs, or that a degree is just a piece of paper. Yes, it is true that students only grow into “experts” when they also learn in a practical environment, but the idea that they don’t do this at university is not one I recognise. Students don’t simply learn from a text book within the walls of the classroom.

Modern ways of learning

Programmes are often co-designed with employers and students can engage in exciting real world projects, such as the Bloodhound SSC collaboration project to break the land speed record.

Image courtesy of jisc_infonet

Image courtesy of jisc_infonet

Students also learn from simulation activities, which have real time employer engagement and live projects on site such as the development of buildings or ground-breaking research projects. They also have opportunities for placements and internships with industry leaders and innovative small businesses or workshops with practitioners at the cutting edge of their industry sectors.

Universities are now a hotbed for successful enterprise. The facts speak for themselves. In the 2012-13 academic year, universities and higher education institutions supported the creation of more than 3,500 start-ups by their recent graduates. This brought the total of active graduate companies created in the last 13 years to 8,127, employing 15,588 staff, receiving investments totalling £28.5m and having a combined turnover in 2012-13 of £376m.

Bricks and ideas

In my view there are three elements that make many of our universities the best place to start a business.

First are the connections and networks they provide. Universities are often at the heart of local economies. They are often uniquely placed to bring together users and experts to identify issues, generate solutions, and bring new services to market. They often act as the anchor that pulls people together – providing a focal point for interaction – as highlighted in the recent Witty Report on encouraging a British invention revolution.

Universities often run innovation networks, work closely with Local Enterprise Partnerships in support of local economic growth, and provide a link for small businesses to other business support networks, such as the Growth Accelerator, UK Trade and Investment, and the Manufacturing Advisory Service.

Second, universities also offer access to the facilities and expertise students need to fully develop and test their ideas – such as with robotic technologies or laser printing. We know this is also highly valued by business, for example through working closely with funding bodies such as the Technology Strategy Board to help small businesses access funding through Knowledge Transfer Partnerships, which allow start-up, micro, small and medium-sized businesses to buy in expertise from universities, colleges and public sector research establishments.

Third, universities are leading a variety of high-impact enterprise initiatives for students, as showcased last year by the University Alliance, of which I am chair, and the National Association of College and University Entrepreneurs. We know universities need to be creative, with student competitions and funding, as well as enterprise internships.

We have taken this one step further with a BA Business (Team Entrepreneurship) at UWE Bristol – where students work in a high-tech hub rather than a classroom. They have coaching sessions and workshops rather than compulsory lectures – and it is running a real business that drives the students’ learning.

Importantly, individuals are also encouraged to reflect on their experiences. We know business failure is much less likely to be seen as a learning opportunity by UK entrepreneurs: 13% thought so compared to the G20 average of 23%.

With reports of more than a fifth of new businesses failing within the first 12 months, it is critical that we see failure as a learning opportunity – in order to prevent it becoming a barrier.

Room for improvement

There are of course a number of issues to address as we work to support enterprise and nurture the entrepreneurial culture we need throughout the UK.

One question that arises for universities as some develop funds to provide financial support for start-ups, is the size of the financial stake it is appropriate for them to take in fledgling businesses. Of course, this is dependent on the level of investment put in – financial or facilities.

But as we go down this route, I would argue that we are best placed looking to models in the US where the aim is for universities to make lots of small investments by taking a 2-3% stake in the resulting companies. And this would be with a higher goal in mind – establishing a long-term relationship and generating future opportunities through engagement.

For government, one very pressing issue is to ensure that the highly successful Cambridge model – supporting start-ups and spin-outs from the so-called Silicon Fens – is rolled out across the UK, from Bristol to Lincoln, Plymouth, Teeside and elsewhere. Cambridge is a great example of what can be achieved, but if that is the extent of our ambition, we are in trouble.

Starting and sustaining your own business is not easy. Universities don’t just offer knowledge and skills on how to develop ideas, enter new markets and utilise digital technologies. They can also offer the connections, networks and support to help individuals flourish. There is no other place where budding entrepreneurs will have access to so many people to spark ideas off – to test them with their peers, experts and professionals.

The Conversation

Steven West works for the University of the West of England, Bristol. He is affiliated with the University Alliance, the West of England Academic Health Science Network, Business West – Bristol Chamber of Commerce and Chair of the West of England Initiative, CBI South West, Leadership Foundation for Higher Education, Universities UK.

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