Graduate start-ups a boost to growth in the North East of England

New analysis reveals the critical role that university graduates play in driving growth in the North East of England, including by starting their own businesses.

Across the region, more than 1,100 new companies were created by staff and graduates of the North East’s five universities between 2014 and 2023, providing more than 4,000 jobs in 2022-23. This comes from University UK’s (UUK) analysis of Higher Education Statistics Agency (HESA) data.

In addition, analysis of government figures released last week by UUK revealed that graduates make up 57% of the workforce in the region and account for a significant proportion of the workforce in key growth sectors that are highlighted in the government’s industrial strategy.

Collectively, the findings emphasise the vital contribution of universities to local and national economic growth, by driving job creation, attracting investment, and equipping graduates and entrepreneurs with the essential skills for success.

 

Supporting the UK’s future

Through Universities for North East England (UNEE), launched last year, the five higher education providers are working together to ensure the North East remains a vibrant, competitive, and attractive place for investment and talent development.

The range of support available to students and graduates means that an increasing number aren’t just staying in the region to work, but are starting their own businesses, which in turn create employment and generate growth. Companies and social enterprises established by entrepreneurial students and graduates from the region are booming. 

Support from universities consists of business mentors, providing space and facilities, connecting with investors and hosting networking events.

Speaking on behalf of Universities for North East England, Professor Chris Day, Vice Chancellor and President, Newcastle University, said: “The figures highlight yet another great example of the positive contribution that graduates and our staff bring to the UK. This shows how universities are a vital part of a strong economy by equipping graduates with skills to support the UK’s future.

“At Universities for North East England, we’re committed to working collectively to unlock the full potential of the young people in our region for the benefit of the North East and beyond.”

 

Unis start up the UK

The contribution of student start-ups and the work universities are doing to support them are being showcased by UUK’s campaign ‘Unis Start Up the UK’, which highlights the vital role these start-ups play in boosting economic growth regionally and nationally.

Their analysis of Higher Education Statistics Agency (HESA) data predicts that by 2028, around 27,000 new start-ups – with a predicted turnover of around £10.8bn - could be established at institutions in the UK.

UUK warns that in order to continue seeing the growth of innovative start-ups, universities must be sustainably funded. University leaders are now warning the government that 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.

Initiatives like UNEE are actively working to prevent this from happening, by working together to support start-ups in the region and speaking with a unified voice to advocate for the North East and attract inward investment.

Many university start-ups have also benefited from the foundational funding provided by the Higher Education Innovation Fund (HEIF). Recent findings from UKRI revealed that every pound of HEIF investment in supporting student entrepreneurship and enterprise returns £15.60 to the public purse. 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.

 

Graduate skills

In addition to supporting start-ups, universities are actively working with major employers to provide the workforce needed in key sectors, which in turn helps to boost regional and national growth.

Five of the North East’s most important growth sectors have a workforce where more than half are graduates:

• Professional and Business services (69%)
• Creative Industries (59%)
• Financial services (53%)
• Life sciences (52%)
• Digital and Technologies (52%)

Vivienne Stern MBE, Chief Executive of Universities UK said: “The growth in university supported start-ups over the last decade has been a staggering success. We can do more – both to encourage and support new businesses born in our universities, and to ensure that they can remain in the UK and grow here. This is just one of the ways that our universities can put their shoulders to the wheel with government to achieve stronger growth. Of course, they need to be on a firm financial footing to do this.

“Universities provide a foundation for economic growth through the knowledge exchange they conduct, and the graduates they educate. Few people know that they also work closely with businesses to help them grow too. Using their kit and equipment, and their expertise, they support start-ups, generate their own spin out companies, and work with businesses from the wider economy to provide practical assistance to help them grow.”

 

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