KEEPING GRADUATE ENTREPRENEURS IN THE UK
And whilst many would consider the mission of universities to be the creation of knowledge and the education of our young people, very few would consider the fact that universities are also large organisations in their own right that generate substantial activity, employment opportunities and overseas investment within their local economies.
According to the study from Universities UK, the total revenue of UK universities in 2011-12 was £28 billion. More relevantly, the university sector has grown by 12 per cent in real terms since 2008 whilst the rest of the economy has been struggling to recover from the recession.
In terms of employment, universities directly employ nearly 380,000 people which is equivalent to 1 per cent of the entire UK workforce. This contribution is doubled if we take into account the number of jobs generated indirectly in other sectors through university spending.
But perhaps the most impressive data relates to UK higher education export earnings which is mainly as a result of the 435,235 students registered as originating from outside the UK and who currently make up over 17 per cent of the total student population.
Such individuals not only contribute directly to universities through fees, accommodation and other costs but also buy a wide range of goods and services off-campus. These include private rented accommodation as well as local shops, cafes and pubs and, as a result, their presence can have a major impact on local economies. In fact, it is estimated that the direct and indirect expenditure of non-UK students generated over £10 billion for the UK economy in 2011-12, with nearly 80 per cent of this coming from international students originating from outside the European Union.
And Welsh universities seem to be benefiting from this growing trend. According to the latest data, there has been an increase of 57 per cent in the number of non-EU full time students registering in Wales in the last five years, which is double that experienced by English universities. In fact, non-EU students now account for 18 per cent of all new full time enrolments at Welsh universities which is higher than any other nation of the UK and this may account for why the Welsh Government has not been unduly worried about the financial consequences of its tuition fees policy.
Of course, it is one thing to bring overseas students into the country, it is another to keep them here and make the most of their talent to benefit the economy. Indeed, recent research by the Kauffman Foundation has shown that immigrants are major contributors to the entrepreneurial economy. For example, they were almost twice as likely to start businesses in the USA as native-born Americans, with about one-quarter of the engineering and technology companies started between 2006–2012 having at least one key founder who was an immigrant.
More importantly, the impact of these immigrant run firms is substantial as they employ approximately 560,000 workers and generated £40 billion in sales in 2012. In fact, 24 of the top 50 high growth venture-backed companies in America in 2011 had at least one foreign-born founder.
Yet despite this overwhelming evidence, there are still enormous barriers for overseas students to remain in the USA after their studies to start their businesses. The same is true on this side of the Atlantic even though the UK Government has recently changed the visa system to specifically target entrepreneurial students.
Introduced in April 2012, the graduate entrepreneur scheme offered up to 1,000 visas in its first 12 months to those wanting to start a new venture following their degree. However, the response has been disappointing with data showing that only 119 people were granted one-year graduate entrepreneur visas in the scheme’s first 12 months from 135 applications.
This works out at less than one graduate entrepreneur per university and, as a result, some have suggested that higher education institutions have been slow to promote and support this programme amongst its most talented overseas students. Whether this is the case certain warrants further investigation although it is worth noting that, according to the Home Office, three out of the eight universities in Wales are not even approved to offer this visa option to its students and the take-up by the others is apparently low.