A recent report by Universities Australia suggests that there is a "strong link" between universities and the startup economy; more than four in five Australian startup founders are university graduates. We drill down into the report to find out just how universities help cultivate startup founders.
A university degree won't guarantee you a job. Universities have also long been criticised for not teaching students real world skills for when they do eventually enter the workforce. Coupled with the fact that university fees can cost a fortune these days, forsaking tertiary education seems like an attractive option for many high school graduates.
But going to university may be able to help you become a startup founder. That's according to a report by Universities Australia and Startup Muster which is based on a survey of 600 startups. Here's a highlight of the findings:
- Startups contributed $164 billion to the Australian economy between 2004 and 2011.
- In 2016, 84.4% of startup founders in Australia had a university qualification.
- 70.5% of founders with a university education attended an Australian university, with the remaining 29.5% having gone to university in another country.
- 67% of startup founders were born in Australia, while the remaining 33% were born overseas.
- Over 80% of founders over the age of 20 had a bachelor degree or higher.
- The top skills for founding team members were also strongly tied to professional university‑level qualifications. These include software development (64%), business (61%), marketing (37%), scientific research (13%), engineering (14%) and legal skills (11%).
- University educated founders were more likely to be founding startups in some of the most cutting-edge specialist fields like medtech, education and fintech.
- Universities also offer a range of startup support programs.
Now, given the report is released by Universities Australia to promote the importance of universities, we naturally have to take it with a grain of salt. And just to be clear, the report doesn’t support a correlation between going to university and founding a successful startup.
But there are legitimate reasons why going to universities may have helped startup founders. For one, we've heard many stories about how startup co-founders met at university. It's a place where you can find likeminded and ambitious people. Universities across Australia are also running their own incubator and accelerator programs, which provide resources to assist startups.
The report showed off a few case studies of successful university graduates going off to launch their own startups.
“Their stories show us that universities were there at key moments when these inspiring startup founders were working to get their ideas off the ground,” Universities Australia chief executive Belinda Robinson said. “Their university experiences equipped them with professional skills, business networks and contacts - and help from specialist incubators or accelerators - to start their companies.”
While universities are taking more interest in nurturing startups, they have also faced harsh criticism. Last year, Liz Jakubowski, founder of CSIRO's Data61 Ribit online job matching platform for graduates, criticised universities for teaching skills that are irrelevant to startups. She told the AFR:
Universities are talking the talk and I think there is good value in teaching some of the theory and structure around entrepreneurship but there comes a point where you've got to walk the walk. [Venture capitalist] Steve Baxter is a classic one ... his advice to every university student thinking about entrepreneurship is leave university straight away ... his view is the traditional way it is being taught is not welcome and really you need to be living, breathing and at times dying for it.
In defence of universities, Ivan Lim, founder and CEO of online furniture startup Brosa, had this to say:
From my point of view, I think the value of universities isn't quite what it used to be. Previously, you would go for the great environment and because you want to learn the necessary skills for a profession.
The key thing that all university students learn is about independent learning, group work, and how to manage day-to-day tasks.
There are standouts that drop out of uni and muster a great business and show the maturity to grow a business. I've also seen others that haven't gone to uni to build a startup, and it's hard, not because they don't have a great idea or desire, but maturity wise. They haven't gone through a period of their life where they had to conduct independent learning and that's where universities help you hone that skill.
Building a business isn't just about idea and execution. Successful entrepreneurs can manage the growth of a startup, think and research laterally, how to work as a team, and other life skills that universities help grow.
What are your thoughts on the role universities play in nurturing startup founders? Let us know in the comments.