Students are the new entrepreneurs

Published on Monday 27 April 2009 21:45

RECORD numbers of students at Scotland's universities are setting up their own companies as a way of "creating their own futures", according to new research from a business support body.

The Scottish Institute for Enterprise (SIE) – which is backed by the Scottish Funding Council and Scottish Enterprise – said it was currently working with 74 student firms with the potential for "high growth".

Over the past nine years, the SIE has normally only worked with about a dozen such firms each year.

James Barlow, chief executive of the SIE, told The Scotsman that he thought a combination of factors had led to the increase, including better support for student entrepreneurs in universities, combined with a generation who had learned about enterprise at school. He also pointed to the influence of television programmes such as The Apprentice and Dragons' Den, which had brought business into the public eye.

His comments came as the SIE pumped 12,500 into three student businesses that the institute believes have the potential for "high growth".

The three student ventures – two from Edinburgh University and one from Strathclyde University in Glasgow – were chosen from 51 entries to the SIE's "new ventures" competition, the winners chosen by a panel of judges.

As well as the cash injection, the businesses will receive legal advice from Harper Macleod and patent advice from Harrison Goddard Foote, along with tips from management, public relations and design consultancies.

In a second competition, the SIE awarded 3,500 to students who have come up with business ideas but have not yet put their schemes into practice.

Barlow said: "It's a really exciting time to be involved because the demand is going up so significantly. Students are beginning to realise that the best way for them to predict their own future is to create it themselves.

"Company formation rates over the past year have gone from a background level of about ten or 12 a year to our current running total, which is 74.

"We're starting to see the benefits of kids being exposed to enterprise through their schooling. I think also that the support mechanisms have matured.

"We're now starting to see the creations of the right kind of 'ecosystems' around student entrepreneurship that are better designed to cater for these students. The great thing is that we're now at a critical mass."

Barlow highlighted the support given to students by projects such as Dundee's enterprise gym and the Edinburgh Pre-Incubator Scheme.

Barlow also highlighted the work of the SIE's three regional business advisors.

"They will identify the student companies that we think have significant growth capacity and work with them to accelerate their growth," he said. "That's part of the reasoning why we moved away from a business plan competition – which was like a beauty pageant for business plans – towards something more meaningful.

"The vast majority of the final ten that pitched to the judges were already generating revenue and some of them a significant amount of revenue."

One such company was Hoodeasy, which turned over 150,000 last year and aims to reach about 250,000 this year.

The business – which received 4,000 from the SIE – was originally a Young Enterprise school project in 2005 for Richard Burton and his friends in Norwich but Burton revived it during his gap year to raise money to fund his travelling.

Burton, 20, said: "The idea behind the company was to make it easier for people to order personalised clothing. We did away with cheques and order forms and put it all online.

"We now have one full-time employee and a couple of part-time staff."

Bolam getting all revved up

LIKE all good business ideas, RevDrive was designed to plug a gap in the market.

Edward Bolam – a final year mechanical engineering student at Edinburgh University – wanted to come up with a new system of gears for use on downhill bikes that would be better than those already on the market.

He has received 6,000 from the Scottish Institute for Enterprise to help him test his prototype over the summer.

Bolam, 23, who cycles for db racing in the Scottish bike series and also competes abroad, is originally from Oxford but headed north to combine his cycling with his studies.

He told The Scotsman: "RevDrive started as my final-year project at university and progressed from there. I do downhill racing and wanted something that's better than what's available currently.

"RevDrive is a gearbox that mounts at the cranks and offers nine gears. It has quiet a number of advantages, including better weight distribution, with no requirement for a rear derailleur. We'll see how it progresses."

Bolam is "exploring a number of options" for when he graduates this summer with a master's degree.

Cycling and business have always gone hand-in-hand for Bolam, who still does some work for a local cycle shop in which he got his first job.

TURNING RESEARCH INTO BUSINESS

HERIOT-WATT University is to receive more than 4 million in grants to commercialise its research and set up a "knowledge hub" in the south of Scotland

The money – from the European Regional Development Fund – will support 13 new jobs.

Heriot-Watt's Technology and Research Services (TRS) will receive 3.85m over the next three years to setup a business development and enterprise team, which will create links with the energy, engineering, building, oil and gas and transport sectors. Under the second grant, Heriot-Watt will work with the University of the West of Scotland and Borders College to help small businesses with design and innovation.

Gillian McFadzean, director of TRS at Heriot-Watt, said: "This grant will enable the roll out of knowledge transfer in the south of Scotland. It will tap into a network of academic expertise and adapt it to local needs."

The "hub" will operate across the Borders and Dumfries and Galloway.