Report highlights surge in start-ups coming out of Welsh Universities

A new report has confirmed a rapid rise in the number of start-ups coming out of Welsh universities

Between 2014/15 to 2022/23 there was a 100% increase in the number of start-ups founded in Wales, beating the UK average of 70%, with more than 320 firms registered on average each year.

Wales also has the highest proportion of student start-ups per capita in the UK.

Figures from Higher Education Statistics Agency have revealed that in the 2022/23 academic year, over 4,000 people were employed by these start-ups – up 82% from 2014/15.

Almost 3,000 companies have emerged with the support of Welsh universities since 2014/15 and by 2028, around 2,000 new start-ups – with a predicted turnover of around £551m – could be established at institutions across Wales.

A Universities UK analysis suggests that, if the current trend continues, over the next three years around 2,000 new start-ups could be established from Welsh universities, potentially providing over 7,000 jobs.

Funding

However, UUK, which champions the university sector in the UK, is warning that to ensure that this is achieved universities must be sustainably funded so they can continue to give the support to power these start-ups.

Cardiff-based Lunia 3D, founded by University of Wales Trinity Saint David (UWTSD) graduate Ken Pearce, went from a garden shed hobby to a large-scale 3D printing firm. The 3D printing company has attracted a range of commissions; from lifesaving military equipment for the Ministry of Defence to a full-scale car prototype for self-driving testing, and a large bespoke shopfront display for a high-end jeweller in Mayfair, London.

Mr Pearce said: “The support I received from UWTSD was invaluable. I still connect with my lecturers and tutors, who have been great advocates for the business. Their encouragement has even helped us secure projects through university recommendations.”

University leaders across the UK are warning the government that more firms established at their institutions are being tempted to take their talents overseas due to a lack of funding available to scale up.

Economic boost

University start-ups and spin-out companies generate significant turnover and boost the national economy, providing jobs and attracting inward investment. London Economics data shows Welsh university knowledge exchange/commercialisation of research generates an economic impact of £1.9bn annually.

Research and Innovation funding is crucial to underpin this activity, however Welsh universities continue to be underfunded.

UUK is calling on the UK government to make a long-term commitment to innovation funding via the HEIF programme, which supports the establishment of collaborative investment partnerships in England, 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.

In Wales, universities are calling for their fair share of any increases in innovation funding from the UK Government and for the devolution of regional innovation funding to Welsh Government.

Significant growth

Professor Paul Boyle, Chair of Universities Wales, said: “It’s fantastic to see such significant growth in university supported start-ups over the past decade, and we can be proud that Wales has the highest proportion of student start-ups per capita in the UK.

‘Our universities provide a wide range of vital support to entrepreneurs as they set up new businesses. And universities across Wales are collaborating through the Wales Innovation Network (WIN) to make even greater strides in the commercialisation of research.

‘We very much welcome the launch today of the First Minister’s Investment Summit. The Welsh Government is right to prioritise financial support for business development, which is crucial to Wales’ future economy. Our universities have a fundamental role to play through establishing startups, attracting business from home and abroad, and acting as anchor-institutions in our local innovation ecosystems.”

Universities Wales has also launched Unis Start Up Wales (part of Universities UK’s Unis ‘Start Up the UK’ campaign), which showcases student start-ups and the work Welsh 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.