New analysis reveals rapid rise in uni start-ups, but leaders warn of risk of losing them to international competitors

• Between 2014/15 to 2022/23 there was a 70% increase in the number of start-ups founded at UK universities
• In the 2022/23 academic year, 64,384 people were employed by these start-ups – up 177% since 2014/15
• New analysis has revealed that with the right support, by 2028, 27,000 new start-ups could be established by students and staff at UK universities supported by over 400 accelerators and 300 incubation hubs in universities in all parts of the country.
• University leaders warn UK risks becoming an ‘incubator economy’ and are calling on the government to act now so universities can continue to support start-ups to scale up in Britain

Figures from Higher Education Statistics Agency (HESA) show there has been an explosion in the last decade of start-ups supported by universities up and down the country, as more institutions have set up business incubators and begun teaching students enterprise skills. HESA data on interactions between higher education, businesses and communities reveals the following: 

• From 2014-15 to 2022-23 the number of active start-ups established at universities increased by 70%, with more than 4,300 firms registered on average each year
• 38,750 companies have emerged with the support of universities since 2014/15
• Over the same period, student start-up turnover across the higher education sector increased by over 750% from £574,082,000 to £4,920,969,000 and external investment into these start-ups increased by almost 350% from £302,791,000 to 1,351,585,000
• Start-ups established at universities are creating local jobs. In the academic year (2022-23) 64,384 people were employed by start-ups that had emerged from universities. This figure has grown in the last decade by a staggering 177%

In order to continue seeing the growth of innovative start-ups at UK institutions, UUK warns that our world-leading universities must be sustainably funded. Universities UK’s analysis suggests that, if current positive trends continue, over the next three years around 27,000 new start-ups are estimated to be established at UK universities.  

This support consists of business mentors, providing space and facilities, connecting with investors and hosting networking events. As well as practical support for start-ups, three quarters of UK institutions offer additional or elective modules in enterprise, ensuring that budding entrepreneurs feel confident taking their first steps in the world of business. Currently three quarters of universities also support social enterprises.

Altered Carbon, a student created start-up at UWE Bristol, has benefitted from practical support from the university for the past seven years. The group developed an AI-driven Digital Nose, an innovative scent detection technology that utilises patented graphene chips and an AI platform capable of learning and distinguishing scents. The system detects gases, volatile organic compounds (VOCs), and complex scent compounds, with applications in environmental monitoring, food storage and waste reduction, and health.

iamproperty was founded by students at Northumbria University who spotted a gap in the market for a property auction service that benefited both Estate Agents and consumers. With the support of the university, they started the now multi award-winning iamsold, pioneering the Modern Method of Auction (MMoA) to bring much needed speed and security to the market. In 2023, iamproperty sold over 9,000 properties via this method, accounting for 1% of all UK property transactions. It has a team of around 700 employees across the UK and is used by over 600 estate agency branches.

University leaders are now warning the government that more firms established at their institutions are being tempted to take their talents and innovations to London or overseas due to a lack of funding available to scale up. This trend is already happening with tech start-ups, leaving some to describe the UK as an ‘incubator economy’ where firms thrive only to be sold or relocated overseas. 

However, universities are actively working to prevent this from happening. To stem the flow of science and tech start-ups and spinouts from leaving British soil, investment firms such as Northern Gritstone and Midlands Mindforge have worked with universities and budding entrepreneurs to ensure they have the necessary tools and private investment to scale up.

Many university start-ups have also benefited from the foundational funding provided by the Higher Education Innovation Fund (HEIF) which supports the development of knowledge exchange. Recent findings from UKRI revealed that the return to HEIF investment in supporting student entrepreneurship and enterprise is £15.6 for every £1. UUK is calling on government to make a long-term commitment to this programme, as well as support the establishment of collaborative investment partnerships across the UK, and to help universities to work in partnership with businesses and local leaders to support local growth and opportunity in all economic areas and emerging clusters.

Today, Universities UK (UUK) launched Unis Start Up the UK, the group’s latest initiative to showcase the amazing student start-ups and the work universities are doing to support them. The initiative also aims to highlight the vital role these start-ups play in boosting economic growth nationally and locally by creating jobs and attracting investors, as well as how universities are equipping entrepreneurs with the right skills through incubator hubs.