Content area
Purpose - The purpose of this paper is to explore, evaluate and share the motivations and behaviours of student and graduate entrepreneurs (referred to as SGSUs) operating from university incubators. The study aims to understand the behaviours and motivations of SGSUs to build on the existing literature and contribute towards a discussion around support services for university incubation centres. Design/methodology/approach - Empirical evidence is presented from an online survey of 100 SGSUs from a sample of university incubators across the UK. The results were analysed using the data analysis software package SPSS. The results of open-ended questions were analysed manually. Findings - The current research reveals a series of contrasting engagements towards and within the university incubator space. A better understanding of user expectations and motivations is needed in order to develop better services and support system within which SGSUs can develop. Practical implications - The outcomes could have practical significance and managerial implications based on a greater understanding and awareness of the needs of SGSUs when allocating scarce resources in order to improve incubator performance, entrepreneurial support and new venture creation funding in HEIs. Originality/value - The paper provides a unique insight into the needs of SGSUs and identifies the key issues that contribute to their early successes and some of the "known" and "unknown" reasons behind why they may not fulfil their ambitions. The findings present thinking of SGSUs and their outlook to the future challenges and relative entrepreneurial support in context of institutional support.
Introduction
This article is concerned with an area that has received little interest in entrepreneurship research: the role of the university incubator and student/graduate users. Despite the fact that an increasing body of work is developing around university start-ups and their growth in general, less is known about the subset of enterprises formed by SGSUs. Specifically, there is a dearth of research into their motivation to use, and attitudes towards, university incubators, in what is often considered to be the initial stage of new business formation. To date, most studies have used incubator managers as the central point of contact for survey data, which is somewhat limited, as they cannot represent the views of students or recent graduates ([32] Karatas-Ozkan et al. , 2005). In addition, less is known about the experiences and attitudes of users in the idea formulation process; whether they assume university incubator support as an extension of their status as, student or alumni; and what they have gained from the experience and what their future intentions are. The aim of this article is to contribute to our understanding of the university incubator in the UK from the perspective of their student/graduate tenants.
The shifting enterprise landscape
The UK's enterprise landscape resides in the context of multiple political, economic, social and technological factors including, research and innovation funding, physical and virtual networks, government departments and agencies, business support, R&D, learned societies and industry ([54] UK Trade & Investment, 2009; [57] Warry, 2006). Taken together, these factors contribute to a nation's competitiveness and the transformation of its people where, amongst other endeavours, innovative ideas are turned into action through new venture creation. However, successive UK governments have been criticsed for failing to weave these factors into a coherent industrial policy. In fact, in a leaked letter to the Prime Minister, the current Secretary of State for Business, Innovation and Skills, recently argued that the very term "industrial policy" has acquired a bad reputation in the UK as a result of misguided and clumsy interventionism in the 1970s[1] .
Setting aside the political rhetoric for a moment, we know that government intervention in entrepreneurship is a messy business leading to many unanticipated outcomes ([19] Gibb, 1996; [14] Culkin and Smith, 2000) and that simply increasing the numbers of new ventures is not a panacea for either job creation or economic growth ([55] van Stel and Storey, 2004; [41] Mueller et al. , 2008; [50] Shane, 2009). Despite the complex nature of the issues surrounding these findings, the views of John Bolton, the industrialist who chaired the Committee of Inquiry on Small Firms in Britain, remain apposite:
We believe that the health of the economy requires the birth of new enterprises in substantial numbers and the growth of some to a position from which they are able to challenge and supplant the existing leaders of industry [...] This "seedbed" function, therefore, appears to be a vital contribution of the small firms sector to the long-run health of the economy. We cannot assume that the ordinary working of market forces will necessarily preserve a small firm sector large enough to perform this function in the future ([7] Bolton, 1971).
Interestingly, it needed the creation of the Department for Innovation, Universities and Skills in 2007, some 36 years later (now the Department for Business, Innovation and Skills) before universities were finally encouraged to participate in economic development activities through direct engagement with the business community. Prior to then, policy was split between the education and trade ministries, creating two parallel strands of activity focusing on innovation and skills respectively. Policy now comes from a single government department, supported by a single funding stream known as the Higher Education Innovation Fund (HEIF). Within this framework, universities are allowed to define priorities according to their own missions and localities, and this has been the catalyst for recent innovations in areas such as the contribution of science and technology to business competitiveness, improving graduate enterprise and employability, and addressing specific business skills requirements.
Despite claimed successes, research addressing the impact of university-business collaboration has tended to focus on supply side issues such as technology transfer activities (including consultancy and income from licensing) and the role of university spin-off companies in innovation and productivity enhancement, and their impact on local and regional economic growth. However, that evidence does not necessarily paint a positive picture; for example, in the USA, university spin-offs account for a fraction of total start-ups (462 out of c. 500,000 start-ups in 2004), and the costs of running the technology transfer function virtually outweigh the returns to the university ([28] Hughes, 2007). In the UK, an influential study ([56] Vohora et al. , 2004) reported on the dismay of venture capitalists at the way in which universities presented investment propositions. It was considered rare for proposals to present details of how ventures would achieve proof of market and proof of technology. Nor was there widespread evidence that technology transfer offices were carrying out effective IP due diligence prior to submitting proposals. One possible suggestion is that universities and the regional and national governments that provide support for university-business collaboration spend more in encouraging these spin-offs than the benefits they generate ([25] Harrison and Leitch, 2010).
In an attempt to further extend the discussion concerning how spin-offs are supported, this article explores the role that university incubators play in nurturing SGSUs. This is particularly relevant given that many university incubators have been opened to house SGSUs, create work experience for students, jobs for graduates through new venture creation, and a physical space from which to exploit research outcomes from academic endeavours ([1] Allen and McCluskey, 1990; [51] Spilling, 1996; [3] Barrow, 2001; [30] Hyclak and Barakat, 2010).
Literature review
While there is a growing body of literature around graduate entrepreneurship and university incubators, it has tended to focus on performance measures, impact indicators and the incubation process.
Government and institutional policies
We know that businesses seldom operate in isolation and gain valuable knowledge from the local and regional eco-system. In fact, in 2010 the UK government invested in excess of £850m in the support of enterprise-related activities to help the higher education sector become a key partner in this process through a variety of initiatives ([15] Culkin and Mallick, 2010). Such policies are underpinned by a (political) belief that increasing entrepreneurial activity is central to the UK's drive for international competitiveness and that the UK's world-class HE sector has a vital role to play in the development of entrepreneurial talent and opportunities ([20] Gibb and Hannon, 2006; [10] Chapman et al. , 2011).
However, the recent change in the contribution of the government to higher education funding from £7.1bn to £4.2bn by 2014-2015 is soon to lead to a significant increase in student contribution towards the cost of their education. Universities are about to face an even greater challenge in justifying the cost of higher education through a mixture of improved standards of teaching, fair admission processes and an emphasis on employability as value for money ([8] Browne Review, 2010). With increased acknowledgement of, and about, the employability agenda, evidence exists of universities supporting innovation and entrepreneurship and increasingly engaging with partners from the ecosystem of financial service providers, technology transfer associations, enterprise networks and business support. In addition, HEIs in the UK generated a significant amount of funding from business - just over £3bn in 2010-2011 ([26] Higher Education Funding Council for England, 2012). At the same time, there has also been an increase in the number of enterprise clubs, providing a bottom-up approach to support student enterprise across campuses ([43] National Council for Graduate Entrepreneurship and Institute for Small Business & Entrepreneurship, 2010).
Across the UK, successive educational policies have, over the past decade laid a strong foundation from where entrepreneurial education could prosper ([44] National Endowment for Science, Technology and the Arts, National Council for Graduate Entrepreneurship and Council for Industry and Higher Education, 2008). The institutional policies to support enterprise education and SGSUs via a number of local, regional and national initiatives, has led to an increase of 53 per cent in the number of Universities providing start-up funds for SGSUs, between 2007 and 2010 ([43] National Council for Graduate Entrepreneurship and Institute for Small Business & Entrepreneurship, 2010). It would apear on the surface, that graduate entrepreneurs are benefiting directly from university-led new venture creation support. However, the authors of the NCGE-ISBE Report ([43] National Council for Graduate Entrepreneurship and Institute for Small Business & Entrepreneurship, 2010) also pointed out that the same student enterprise institutional policies themselves, relied heavily on government policies and central funding support.
Despite this, we do know that the number of businesses operating in 2010/2011 includes a total of 8,003 active HE spin-off and start-up firms employing approximately 31,300 people (FTE) with a turnover of £2.45bn and external investment of over £1.4bn ([26] Higher Education Funding Council for England, 2012). Additionally, staff and recent graduates of HEIs set up 2,935 new start-up companies. A study by [10] Chapman et al. (2011) examined the impact of science and technology based academic spin-offs of London HEIs and acknowledges the need for detailed information to be captured in order to develop a fuller picture of start-up activities of graduates. The authors also question the reliability of the data reported:
[...] it appears that large HEIs in our sample are unable to estimate reliably both staff and graduate start-ups in which the parent institution holds no IP (intellectual property) position. Further evidence for this can be found in the subsequent 2007-2008 HE-BCI returns where anomalies in reporting would seem to contribute to a high proportion of zero returns in the graduate start-up category (32 out of 40 London HEIs).
There is little or no evidence that seeks to explain the motivations of SGSUs towards using university incubators, describe their business(es), the services taken up (as offered by the universities), and the networks they are engaged with. It is against this backdrop, the current study was designed in order to provide evidence for policymaking and performance monitoring of university incubators.
Graduate entrepreneurs and business incubators
It has been argued elsewhere that new venture formation and small companies with high growth potential, represent the greatest opportunity for the creation of jobs in economies across the globe ([7] Bolton, 1971; [5] Birch, 1987; [16] Davis et al. , 1996; [33] Kelley et al. , 2012). The process of new venture formation also provides an answer to the question "What purpose does an incubator serve?". Two main drivers for incubation have emerged:
incubation is a way of addressing market failures, which limit the ability of small high-tech start-ups to overcome uncertainty ([24] Hansen et al. , 2000); and
it helps overcome obstacles associated with the early stages of firm development ([17] Dee et al. , 2011; [36] McAdam and McAdam, 2008).
Since the first recognised incubator was established in Batavia, New York in 1959, the offer has grown from the provision of a shared workspace to a nurturing environment ([38] McAdam and Marlow, 2008; [47] Rothschild and Darr, 2005), providing access to business services ([35] Lee and Osteryoung, 2004), business management and operational support ([48] Scillitoe and Chakrabarti, 2010; [45] Nouira et al. , 2005), and networking opportunities with seasoned entrepreneurs ([27] Hoang and Antoncic, 2003), venture capitalists and mentors ([34] Lalkaka and Bishop, 1996; [49] Siegel et al. , 2007).
There is, more recently, a growing belief that small firm growth is more of a co-operative challenge for entrepreneurs than was originally thought - one that depends on social networks, rather than being a purely individual and competitive act ([23] Grimaldi and Grandi, 2005). Acknowledging that some form of interdependency exists between entrepreneurial success and social networks partly explains why political intervention has been directed at encouraging a groundswell of business start-ups and business incubation, and why publicly supported business incubators and science parks are promoted as tools for economic development via networks of entrepreneurs ([31] Jørgensen, 2011). The ground for such a shift was laid in part when [38] McAdam and Marlow (2008) argued that the role and value of networking in the entrepreneurial process lay in the supply of new ideas and information, which then supports the survival and growth of the venture. They argued that networks perform four key roles:
the provision of access to new ideas and resources that underpin entrepreneurial activity;
they facilitate the achievement of credibility through the formation of alliances with existing incumbents;
networks are utilized in order to share and create knowledge and learning; and
new networks also develop to connect the various relationships, which in turn facilitate the achievement of entrepreneurial goals and enterprise growth ([38] McAdam and Marlow, 2008, p. 223).
Turning to SGSUs, we see that enterprise education is fostering an interest in entrepreneurship and helping to encourage a more positive entrepreneurial mind-set amongst students right across disciplines ([43] National Council for Graduate Entrepreneurship and Institute for Small Business & Entrepreneurship, 2010). However, when it comes to focusing on graduate entrepreneurship the skills acquired by graduate entrepreneurs will need to be advanced so as to enable them to seize and exploit opportunities, take risks, think strategically, work flexibly, manage complexity and acquire team-working skills and commercial awareness ([44] National Endowment for Science, Technology and the Arts, National Council for Graduate Entrepreneurship and Council for Industry and Higher Education, 2008). According to the annual HE-BCI survey ([26] Higher Education Funding Council for England, 2012), in 2011 there were 2,848 graduate start-ups with university business/enterprise support, an uplift from 2,357 in 2001. If they are to be successful, incubation facilities must sit within the context of a coherent programme of curricular and extra-curricular entrepreneurial learning that provides a supply of students and graduates into the incubation facility and out of it into the wider business community ([46] Rothaermel and Thursby, 2005).
In summary, the broad policy frameworks supporting university incubators, SGSUs and the emphasis on university-led infrastructure provide the basis of this research. The aim of this paper, therefore, is to report on these research findings and employ them to suggest possible parameters regarding infrastructural elements of university incubators in the context of what is available to the business incubation population as a whole.
Research methodology
This exploratory study was primarily concerned with users of university-led business incubation centres (BICs), since no other research has investigated this phenomenon specifically. Five of the most commonly occurring themes associated with Graduate Entrepreneurship and Business Incubation were identified from the literature review. A series of ten face-to-face interviews with members of the target population, Enterprise Educators and Student Enterprise Society members was undertaken to determine whether the themes were germane. Through these iterations, the five themes were felt to be reasonably accurate with little in the way of additional themes forthcoming ([21] Glaser and Strauss, 1967). A survey instrument was developed to collect data about behaviours and motivations of SGSUs towards university incubators.
The findings reported here are based on a cross-sectional study on the behaviours and motivations of SGSUs of university-led BICs using one round of data collection, at a single point in time ([13] Creasey, 2006). The fieldwork for the users study was conducted between May and July 2011.
The research instrument for this study - an online questionnaire - consisted mainly of closed questions (single and multi-response) with some open-ended questions. The research instrument and component topics were developed by the author in collaboration with members of the Group for Research on Innovation and Enterprise (GRIE) at the University of Hertfordshire. The core questions were structured in five sections, - broadly representing the five identified themes:
user demographics;
evidence pertinent to the business;
finance and banking;
motivation and support (including networking with internal and external stakeholders); and
BIC services and facilities.
A pilot study consisting of eight SGSUs was administered in the month prior to its uploading onto the internet ([2] Baker, 1994). The research instrument was administered to the volunteers, replicating the main study as near as possible. Face-to-face interviews were conducted after completion of the task to test for problem questions, respondent comprehension and time taken to complete the task. The results led to a revised research instrument, which was tested on a further two graduate entrepreneurs, making a total of ten subjects involved in the pilot study.
There are 300 business incubators in the UK including science and innovation parks, university-led incubators and private secor owned incubation centres ([53] UK Business Incubation, 2009). SGSUs currently occupying a university-led BIC with the intention of starting or running a business were included in the study. The research process began by drawing up a sample of business incubators, hatcheries or workspaces across UK iniversities. As a subset of all UK business incubators, this study generated responses from 30 of 55 UK HEIs that have reported running a BIC ([43] National Council for Graduate Entrepreneurship and Institute for Small Business & Entrepreneurship, 2010). As many of these facilities have a resident BIC manager or co-ordinator, this person was contacted in order to gain access to the occupants; other mechanisms were employed to promote the existence of the survey itself to the target population. The sample consisted of SGSUs residing in university incubators.
In order to be eligible to complete the survey, a three-stage filtering criterion was established. Respondents had to be:
a current student or graduate;
who graduated no more than five years ago and had started (or was working towards starting) their own business; and
whose business was located in, or had access to, facilities within a university-led business incubator, hatchery or workspace.
The research instrument was live on the SurveyMonkey portal between May 2011 and July 2011.
Overall, this method produced 185 overall responses with a usable sample of 100 respondents and a response rate of approximately 54 per cent. The 100 individuals in the sample consisted of 67 (67 per cent) males and 33 (33 per cent) females, with 75 (75 per cent) under the age of 30. Within the sample, 62 per cent of respondents started when they achieved an undergraduate degree and 32 per cent a Master's level qualification in academic disciplines such as arts and humanities (46 per cent) and business-related disciplines (25 per cent). With over 47 per cent achieving an upper second-class degree, this matches the UK national average in 2009/2010 as reported by the Higher Education Statistics Agency (2011). The initial findings support the view that graduate entrepreneurs based in incubators do develop, some more quickly than others, and they perceive that occupancy has been a factor as part of that development process. However, the services that are seen by users as having most value are not always those that would be expected - for the facility as a base from which to operate as opposed to a knowledge space where ideas are nurtured, shared and developed, new resources are acquired and networks are formed.
Findings and discussion
This section provides an overview of the respondents who occupy space in a university-led BIC. The key themes, in this first phase of analysis, are based around demographics, the business, banking and finance, motivation and support, and infrastructure and facilities on offer.
Demographics
Based in part on the make-up of business plan competition entrants and membership of student enterprise societies, we might assume university incubator users to be predominantly white and male, from a business and management background, with a first degree and aged between 21 and 24 years. However, as can be seen from Table I [Figure omitted. See Article Image.], while there are obvious similarities, the respondents provide a slightly more representative picture of the total population.
The majority of users of university-led BICs are under the age of 30. There is a distinct gender bias but only at a ratio of 3:1, which is potentially encouraging given the results of previous research around gender and university incubation ([39] Marlow and McAdam, 2012; [52] Treanor and Henry, 2010). While only 13 per cent of users commenced trading while they were still studying, the remainder commenced trading upon completion of their academic study. Interestingly, only 13 per cent of the graduates had been offered some form of entrepreneurship/business module during their time at university, although the vast majority would have taken such a module had it been offered.
The graduate entrepreneurs exhibit a wide range of academic disciplines during their time at university. A broad range of the social sciences account for 71 per cent of respondents, while STEM students and graduates make up 22 per cent. In terms of what stimuli users had been exposed to (e.g. work or life experiences) on their journey towards new venture formulation, Figure 1 [Figure omitted. See Article Image.] demonstrates that while nearly half of users did participate in some (unaccredited) formal class-based learning, a range of external experiences may well have helped to awaken their interest in new venture formulation.
The business
The users are mainly running their business in the creative industries (37 per cent) and business/professional services (16 per cent). Ownership of the business lies with the individuals in over half of the cases (54 per cent), in a quarter of the cases with one partner (26 per cent), and with a team for 20 per cent. Some of this can be attributed to the supportive engagement from the creative and cultural skills councils for being highly active with the HEIs in providing knowledge exchange ([26] Higher Education Funding Council for England, 2012). The businesses are oriented towards creativity and individualistic professional services, despite 25 per cent of respondents graduating from STEM subjects.
In order to make their business successful, 59 per cent of graduates commit more than 36 hours per a typical week. Even then, 17 per cent of entrepreneurs study and 27 per cent work part-time or run another business along with running their first business. Around 11 per cent of these businesses have not yet started up or are in their conception stages, while 49 per cent have been operating for less than one year and 36 per cent have been operating for 1-3 years. Survival is at the forefront of all start-ups, but Table II [Figure omitted. See Article Image.] seems to indicate that graduate start-ups do have a higher than average propensity to survive for three years or more, although little is known in terms of size, form and ownership ([40] Millán et al. , 2012). The BICs provide space and services in the start-up and early stages of business operations. On average tenants employ two full-time staff, one part-time, and one voluntary member of staff; they are minded to grow and around half of those operating for 1-3 years have seen sales and profits increase over the past 12 months.
As such, 75 per cent are behaving as we would expect a micro-enterprise to, with revenue earning customers both locally and nationally. Securing the finance to establish a new enterprise or to grow an existing one is a difficult challenge; administrative undertakings that all firms have confirm to weigh particularly heavily on the SGSU. In addition, locating staff with the right skills and who are disposed towards working for a small firm is problematical, as is finding the time to hone their skills and keep up with developments in the field ([9] Buschfeld et al. , 2011).
We know that micro-enterprises are often innovative, but they remain vulnerable to competition from their peer group when they introduce new products or services, lacking the tacit knowledge and means to respond rapidly. We also know from previous studies that incubator facilities, with their trustworthy status and learning opportunities are found to be important for tenants. As such, one might expect university-led BICs to be an ideal space to encourage the sharing of sensitive information and building trust - such a critical factor in enhancing survival chances, knowledge exchange and business development ([37] McAdam and Marlow, 2007).
Banking and finance
Previous studies concerned with entrepreneurship have supported the notion that start-ups experience severe financial limitations. For example, both ad hoc ([6] Blanchflower and Oswald, 1998) and longitudinal ([59] Xu, 1998) studies have found that the likelihood of being self-employed increases with individuals' net worth ([18] Evans and Leighton, 1989). However, an aim of this paper is to focus on the financing of SGSUs in the context of an economic period when, even established SMEs are finding credit almost impossible to access, in recent memory. In fact, SGSUs might well, as a group, be those who are most adversely affected among all forms of start-ups by imperfections in the loan market; this is especially the case in England, where graduate indebtedness is a recent phenomenon and competency in "money" networks is challenging for academic start-ups ([56] Vohora et al. , 2004).
The findings highlighted that 44 per cent of the SGSUs had turnover of less than £5,000 a year. This was achieved with an average initial start-up capital of £3,500 and was raised by using own funds (86 per cent), family and friends (34 per cent) and government grant programmes (30 per cent) as well as university business grant funding and business challenges prize money. Business banking facilities were being used by 67 per cent of the graduate entrepreneurs; with HSBC (24 per cent) and Barclays Bank plc (21 per cent) followed by Lloyds TSB (14 per cent) the preferred banking service providers. Online banking and phone banking were recognised as the most important offers by 40 per cent of respondents, along with free banking, loans, overdraft and cheque facilities. What this suggests is that SGSUs do not recognise a need for, or resort to, external equity financing, despite knowing that over time, SGSUs have the ability to develop into small to medium-sized enterprises, employing placement students and graduates from their own HEI and contributing to the overall economic and social well-being of the local community. In line with previous research, this lends support to the notion of a financing hierarchy, whereby external capital injections are only sought when personal financial resources are exhausted. It remains questionable as to whether our SGSUs are fully aware that recourse to outside private equity financing has a very large positive contribution to the growth of start-ups; this is true for technology-based start-ups, and, if they did know, how might they act armed with such knowledge?
Motivation and support
Almost 80 per cent of the ideas behind the SGSU were generated directly by the founder; although university research projects (19 per cent) and an inability to get a job (13 per cent) were also acknowledged as motivating factors to start. The key finding, however, was the negativity - or maybe a lack of knowledge - towards external influencers such as business coaches, local business networks and local enterprise agencies. Family, friends and the BIC administrators were identified as providing support to the SGSUs. Only 36 per cent of the entrepreneurs have a mentor provided through a university programme and their main functions involved support in strategy and business planning, moral support, motivation and confidence and creative thinking. This provides further evidence to the findings from the NCGE report that support received through formal and informal mechanisms has little or no impact on entrepreneurial graduates, whose needs vary across different sectors and disciplines ([17] Dee et al. , 2011; [22] Greene and Saridakis, 2007).
While many internal support mechanisms are useful, it is obvious that SGSUs do not recognise or have found it difficult to access outside competencies and other resources usefully; if these competencies and resources are not available within the founding team, this may severely limit future growth ([12] Colombo and Grilli, 2005).
University incubator services and facilities
Efficiency in incubator management and the role of support staff is acknowledged as important. They exert significant effort in attracting prospective entrepreneurs, assist in the development of existing tenants and facilitate the growth of their business. In this study, 43 per cent of graduate entrepreneurs were made aware of the existence of a BIC through university advertisements and academic tutors. Forty-seven per cent of the respondents took up tenancy during the start-up stage and 19 per cent at the ideation and pre-start up stage. The occupancy period for the graduates was under six months for 36 per cent and six months to one year for 35 per cent of the sample. The nature of occupancy is mainly hot-desking for 35 per cent and virtual tenancy for 32 per cent of the graduates. Around 43 per cent of the graduates pay an average monthly price of £128, with additional fees of around £14.
The most useful BIC services were wi-fi, free broadband and networked PCs (73 per cent), followed by access to meeting rooms (71 per cent) and business advice/mentoring from incubator staff (70 per cent). Services that are not available but would be useful in future include short business courses (12 per cent), online business resources (11 per cent) and boot camp/summer school/business acceleration programmes (10 per cent). In order to understand the value of networking and connecting with other businesses, respondents were asked whether they valued interacting with other tenants in the BIC, university-based staff and experts, local business networks/connections, national business networks/connections, international business networks/connections and networking with student/graduate entrepreneurs at other universities.
An opportunity to network with the other tenants in the university incubator had been exploited by 24 per cent of respondents for services such as marketing, advertising, website design and photography. However, despite not taking advantage of the opportunity, SGSUs considered that networking with other businesses in the building, university-based staff and experts and local business networks would be helpful. There is an equal mix of graduates who consider networking with national business networks/connections, international business networks/connections and entrepreneurs from other university as a useful opportunity that is not currently available ([11] Chell and Baines, 2000).
Overall satisfaction with the BIC for 68 per cent of the graduate entrepreneurs has been pleasant, and only 4 per cent of the respondents have been unhappy. With minor improvements in existing facilities such as printing and space, they are deeply appreciative of the services and opportunities to work in the BIC and consider business networking as the most valuable services for future.
Conclusions
It has been argued that, in general, entrepreneurs in university incubators have a greater chance of success than the others. However, further work is required to quantify the reasons for a reduced probability of failure of ventures with strong university ties against start-ups without such ties. The initial findings of this study reveal what is important to a sub-set of this population - SGSUs in university incubators. Data around a number of themes were collected in an attempt to further understand the relationship of the tenant with the incubator, in its widest sense. Senior and local HEI management should value these findings, both in terms of policy design and practices for funding and infrastructure support for incubation; and, in developing communicating strategies for the service offer. The findings also hint at further opportunities to apply the concepts from innovation, enterprise and incubation in order to determine the role and aspirations of the HEI itself, from the perspective of running a university incubator ([4] Bergek and Norrman, 2008). In terms of the SGSUs, the author makes four observations, which senior and local HEI management can use to make sense of the support they offer graduate entrepreneurs and entrepreneurial graduates, in the light of the Wilson Review of university-business collaboration ([58] Wilson, 2012).
The majority of occupants of university incubators are young British graduates with a degree; they have generated new products and services with the help of business start-up courses and are well supported by family-led business and previous work experience. This demographical information is very critical in highlighting the low number of students from diverse ethnic, age and educational backgrounds ([29] Hussain et al. , 2008). Future research is needed to understand the support required by graduates at different stages of business start-up and the value of the support obtained from various sources.
The government has made significant investment in funding knowledge transfer networks, technology and innovation centres and other networking opportunities. However, local business network and local enterprise agencies are least sought support mechanisms by SGSUs. Despite the recognised importance of networking in a start-up business, the graduate entrepreneurs reserve the success of their business by self-ownership. A greater awareness of the benefits of networks, and networking, should be marketed effectively at graduate entrepreneurs.
An average start-up capital of £3,500 pounds was claimed to be sufficient to start a business and was easily raised by using own funds (89 per cent), family and friends (34 per cent) and government grants (34 per cent). More than 75 per cent of the SGSUs were in receipt of business banking services and consider internet banking and free transfers to be the most valuable services above any other enterprise business banking services. They rate Barclays Bank and HSBC as the most reliable partners in this particular area.
The SGSUs commenced tenure during ideation, or early-stage start-up. This is supported by an argument that suggests it is the incubation process that is more important than the incubation facility itself ([42] National Business Incubation Association, 1996). However, these results do seem to indicate that SGSUs value the space itself as being more important than the services on offer. Future research is needed to untangle whether this is a lack of understanding of the service benefits or a rejection of the quality and appropriateness of the services on offer.
Linked to the above observation, there is little doubt that the role of university enterprise training/academic tutors and BIC management will need to evolve significantly if universities want to turn SGSUs into long-term partners in the university-business collaboration space. Future research should therefore go beyond graduation from the incubator - albeit a fundamental landmark in the development of a new venture - and examine the performance of the graduate entrepreneur over a much longer timeframe.
1. Private letter to the Prime Minister and Deputy Prime Minister from the Secretary of State for Business, Innovation and Skills, Rt Hon. Vince Cable, dated 8 February, 2012 (leaked to the press 6 March 2012).
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Nigel Culkin, Marketing & Enterprise, University of Hertfordshire, Hatfield, UK
Figure 1: User experiences
Table I: User profile
Table II: HE-BCI UK sector figures for spin-off and start-up activity
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