The Rise of the Graduate Entrepreneur: Trends & Insights

The Rise of the Graduate Entrepreneur: Trends & Insights
More graduates in the UK are choosing to embark on an entrepreneurial adventure. Img source: RUT MIIT / Unsplash

When thinking of the typical university graduate, it’s common to think of the conventional route of someone who either signs up for a grad scheme, lands a barista gig whilst working through hundreds of job applications, or someone who heads straight back into further studies.

However in recent years, studies have shown that there has been a rise in graduate entrepreneurs.

As defined by The National Centre for Universities and Business (NCUB), these are people that within 15 months of graduating, have either started their own businesses, considered themselves self-employed (freelancers), or were at the conceptual stage (developing a creative, artistic, or professional portfolio, for example).

This is unsurprising given the digital era we live in, making it easier than ever before to set up and launch a business.

The Global Entrepreneurship Monitor (GEM) United Kingdom Monitoring Report 2020 shows that 1 in 4 individuals of working age within the UK engaged in some form of entrepreneurial activity or intended to start a business within the following three years.

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The rate of UK Graduate Entrepreneurs is on the rise! Img source: Wocintechchat/Unsplash

Just earlier this month, NCUB released a report titled 'An insight report into the UK's Graduate Entrepreneurs'.

Here are three observations that we found to be particularly insightful...

1) One-third of graduate entrepreneurs work in R&D-active industries

The evidence found in the report suggests that graduate entrepreneurs are likely to be making important contributions to start-ups that are heavily invested in R&D. This is particularly notable given the UK Government’s push towards boosting business innovation.

On the sample of R&D-active industries, entrepreneurship was found to be heavily concentrated in computer programming, consultancy and related services, followed by entrepreneurs that work in information-related industries (publishing and information services). Many entrepreneurs in R&D-active industries also work in manufacturing industries, including chemicals and pharmaceuticals, motor vehicles, computers and electronics.

The report looks into how graduate entrepreneurship in R&D industries is associated with graduates’ backgrounds, educational attainment, and work characteristics. In terms of background, it was found that graduates holding PhD and Master’s degree qualifications are more likely to carry out entrepreneurship activities in R&D-active industries.

Second, the report found that entrepreneurship in R&D-active industries was not dependent on the type of university attended. For instance, graduates from Russell Group universities are as likely to be entrepreneurs in R&D-active industries as graduates from non-Russell Group universities.

2) Graduates facing structural inequality are more likely to be graduate entrepreneurs

When looking into the demographic characteristics of graduate entrepreneurs, the report presented findings that individuals facing structural inequality are more likely to be graduate entrepreneurs. Although they are unsure of the reasons for this at this stage of the research, black graduates and graduates with a known disability have higher entrepreneurial rates.

Graduates from Black backgrounds were proportionally the most likely to be entrepreneurs. Img source: Christina @ wocintechchat.com / Unsplash

Ethnicity and Entrepreneurship Rates: The report uncovered that graduates from Black backgrounds were proportionally the most likely to be entrepreneurs. This difference is statistically significant even after controlling for other relevant factors. 13 percent of Black graduates were entrepreneurs. Graduates identified as having 'Other ethnicity' had the second highest entrepreneurship rate (11 percent), followed by Asian graduates (8 percent) and White graduates (8 percent).

Disability and Entrepreneurship Rates: Overall, 18% of the 2019-20 graduating cohort declared that they had a disability. 10% of graduates reporting a disability were graduate entrepreneurs, compared to 8% of those with no known disability. This difference is statistically significant after controlling for many individual and institutional factors that explain entrepreneurship activities.

3) Entrepreneurial spirit is particularly strong in graduates' local areas

The report also explored the location of graduate entrepreneurs, including where they are from and where they chose to carry out their entrepreneurial work.

The findings demonstrate that graduating entrepreneurs most frequently choose to continue their business operations in the area where they had studied (at 47 percent). This shows that there may be room for universities and the government to strengthen the foundation of local entrepreneurship, which could have a large positive impact on growth and opportunities.

Graduate entrepreneurship has also been shown to contribute to regional development by retaining highly skilled individuals and creating regional entrepreneurial networks.

With the above findings in mind, it’s easy to anticipate dramatic growth in the development of graduate entrepreneurship in the UK during the next few years, driven by our higher education institutions.

We will likely see more universities embracing student and graduate entrepreneurship, providing great opportunities to foster this area of growth and innovation!

If you'd like to find out more about graduate entrepreneurship, you can read the full NCUB report here.

KEVRI Staff

KEVRI Staff

KEVRI is a collaborative software platform and consultancy that helps you surface innovation at your organisation and support impact pipelines. Email us at info@kevri.co to find out more!
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