This presents two inter-linked challenges:
- how do we find, describe and measure impacts
- how do we provide evidence that these impacts have been delivered by our funding
Our exploratory study of the value of student start-ups published today and our report last year: Knowledge exchange performance and the impact of HEIF in the English higher education sector address these questions.
Earlier expert research provided good evidence of a £6.30 return to our funding for knowledge exchange (KE) through Higher Education Innovation Funding (HEIF). This was calculated by looking at the value of HE KE services in terms of income from external partners presented in the HEBCI survey. We know that HEIs use HEIF for a broad range of KE services, and for some of these, income is not an applicable measure of impact. The support given to students to start up a business is one such additional service and use of HEIF.
How do we measure the impact of KE support for student enterprise?
The value of student start-ups report focusses on the specific businesses created through student enterprise support, in terms of the sales and turnover these achieved – which in turn lead to public benefits such as jobs growth or tax paid. There is also potentially a greater long-term impact from the entrepreneurial skills developed in students that may be turned into impacts throughout their careers, and not just in starting up a business. This would require looking at salaries and other impacts over a much longer period and was not attempted in this study.
It is also important to note that these economic impacts were measured within three years of starting a business. We can anticipate that sales and turnover figures would be much greater if measured once businesses are more established. The study however relied on primary research to track graduates, which would be very challenging if attempted over long time periods.
The study also had to address the issue that a number of different forces may encourage a student or graduate to start a business, and so it needed to estimate a ‘deadweight’ – that is, what proportion of the value created would have been achieved anyway without the HEFCE intervention. The study asked about the likelihood of the graduate starting up if they had not gone to university. It also calculated this deadweight figure more narrowly, only for those who had received KE support at university.
Taking into account the sales/turnover figures estimated for the HE sector, the study concluded that the return on HEIF specifically for student enterprise support was £3.36 pounds using the broad deadweight measure, and £1.14 for the narrower measure.
Conclusions from student start-ups study
The study was exploratory and there are a number of caveats above around coming to any precise figure of the value of funding student enterprise through HEIF, though there seems good evidence this is greater than £0. This means that our present calculation of £6.30 return to HEIF is an under-estimate – since the enterprise impact is on top of the income impact. The impact of using HEIF for student enterprise seems likely to be lower than the impact of using HEIF in partnerships with external users.
Sales and turnover may be a very narrow measure of the value of the student enterprise agenda. In any use of wider measures, such as graduate salaries, close attention would need to be given to the deadweight and the specific attribution of impacts to HEIF – as compared with much larger teaching resource.
For more on student enterprise, read ‘Does the subject you study at university affect whether you will start a business?‘