Innovation Strategy Creativity

Graduate Entrepreneurship - the road less travelled (by graduates and universities).

July 5th 2016

If you want an employer to take you on, start your own business first.

In the current economic climate, graduate entrepreneurship is an important employment route that is often overlooked. Employers seek applicants with experience as they have limited resources to invest in training recent graduates. Employers constantly complain about graduates’ lack of commercial awareness. It may be counterintuitive, but starting a business (even if it fails) is likely to make a graduate more attractive to an employer – it will certainly differentiate them from other applicants. Few EU graduates seem to appreciate this.

Although EU graduate unemployment rose between 2008 and 2010, the EU lags behind competitor nations in the proportion of graduates it produces. Graduates accounted for 26% of the EU workforce in 2011 compared to 41% in the USA, 44% in Japan and circa 50% in Canada1. Despite the EU’s weak performance in graduate production, there continues to be an oversupply of graduate talent and insufficient supply of formal job opportunities for this group – research of 30,000 EU graduates by trendence in 2013 found that more than half were worried about their careers, with this figure rising to over 80% in Greece, Italy, Portugal and Spain2.

Can universities help? Yes, but they must be more proactive and strategic. Presently, their principal focus is on delivering excellent teaching and research.

Universities can make three pivotal contributions. First, they can actively promote entrepreneurship opportunities that are supported by national governments and commercial organisations - these are typically competitions and are designed to provide safe environments for the students to test their ideas. Examples would be Trinity College Dublin's Launchbox, and the UK’s Energy YES and Biotechnology YES (Young Entrepreneurs Scheme).

The second area where universities can make a contribution is through creating a mentoring team dedicated to promoting entrepreneurship and providing appropriate impartial advice and guidance. Successful mentors: have start-up experience; understand academia and the commercial environment, and are able to translate between the two; have strong networks; are trusted. They are frequently professionals who are well established in their careers. Some universities harness the power of alumni networks to help early stage start-up companies to grow. This has the added benefit of strengthening links between alumni and the institution while also providing the new start business with access to professional/commercial networks that would be very difficult for an academic institution to provide otherwise. Engaging alumni also delivers a breadth of specialist input that would be impossible using in-house mentoring staff alone. Mentoring support can be complemented by the provision of incubator space/soft start-up support as well as small scale finance.

The third area where universities can make a contribution is through providing access to cultural exchange opportunities. These may seem more tangential but are important - undergraduates who travel during their studies gain insights into other cultures that help them to understand themselves better and also to recognise the important role cultural diversity plays in a global market place. While gap year travels can demonstrate personal independence and motivation, job-focused placements are much more valuable to the undergraduate’s career prospects as they build credible experience and professional relationships. An excellent example of the latter is the Scholar’s Programme, targeted at penultimate year undergraduates, that is delivered by the Saltire Foundation in Scotland. This places undergraduates on 8-week long placements in organisations located throughout the globe.

Whilst valuable, these contributions are “bolt-ons” to the core academic activity - undergraduates must seek them out. Thus, only the more motivated students come forward while mainstream undergraduates slip through the enterprise net untouched. If significant numbers of graduate entrepreneurs are to be born, the entire group must be engaged.

Widespread engagement requires an integrated rather than a bolt-on approach to be taken. Here, enterprise and entrepreneurship is integral to the core academic programs: all academic curricula include an enterprise element. These appear to be most effective in embedding an enterprise culture in students and helping them to see the link between their subject learning and potential commercial or societal applications. An additional strength of the integrated approach is that it is usually built around group-based assignments which encourage team working. Successful businesses are grown by teams, which is why investors tend to look first at the team’s experience before considering taking a stake in the business.

Graduate entrepreneurship is especially relevant to city based universities. These institutions can make a very significant contribution to enhancing graduate entrepreneurship rates and in turn, the performance of their city-regions. They are at the heart of the urban triple helix (research-base, commercial sector, governmental sector) that is essential for the development of strong and innovative growth clusters. Cities comprise a critical mass of people and business networks that provide early and fast market feedback to newly formed businesses, thereby enhancing their chances of success. They also attract high net worth individuals who make investment. While US based universities are arguably ahead in this area, there is now a significant opportunity for EU institutions to design their own responses that meet local needs and take advantage of emergent opportunities.