The NSW Innovation and Productivity Council's Accelerating NSW report highlights how universities strengthen Australia’s startup ecosystem.
How is university beneficial for entrepreneurial success? We often hear about founders like Bill Gates and Mark Zuckerberg who famously dropped out of university, reinforcing the idea that higher education isn’t essential. However, a report from the NSW Innovation and Productivity Council presents a different view.
Far from being outdated or overly conservative, universities play a vital role in the startup ecosystem as hubs of innovation and key drivers of success. They equip students with essential skills, offer valuable resources and foster connections that spark groundbreaking ideas. According to the report, universities are pillars of our startup community, supporting new ventures and shaping the future of entrepreneurship.
Here are five ways universities strengthen Australia’s startup ecosystem, as detailed in the Accelerating NSW report.
Education and skill development
Universities are where future entrepreneurs gain the knowledge and skills needed to thrive. From technical expertise and creative problem-solving to research skills and business strategy and planning, students build a strong foundation.
The report found that most startup founders have a university degree. In NSW, 30% hold a master’s degree, and 20% have a PhD. The number of founders with a PhD has risen from 6% in 2018 to 15% in 2023, highlighting the rising value of advanced education in the startup world.
Jochen Schweitzer, Associate Professor at the UTS Business School and Co-Director of the UTS Innovation and Entrepreneurship Collaborative, which conducted the research for the NSW Innovation and Productivity Council, shares, “Universities have a unique opportunity to inspire people of all ages to consider entrepreneurship. Through both curricular and co-curricular activities, students can gain the skills, confidence and support they need, especially at a time in their lives when they’re very likely to pursue entrepreneurship.”
Research and innovation
As research hubs, universities are driving forces behind new technologies and innovations that lead to successful startups. Entrepreneurs can access university facilities to research their ideas and collaborate with industry partners, turning fresh concepts into reality.
UTS Startups, for example, provides access to ProtoSpace, a high-tech 3D printing facility that supports rapid prototyping and research and development, helping founders move from concept to production.
Incubation and support
Universities also offer coworking spaces, accelerators, incubators and startup hubs (CAISH entities). These vibrant spaces provide essential resources like workspaces, mentorship, networking events, research support and funding opportunities — everything early-stage startups need to thrive.
Startups involved with CAISH entities emphasise the importance of networking in these collaborative spaces. The report reveals that the top benefits of accelerators and incubators are networking (36%), mentorship (27%), peer interaction (11%) and a sense of community (5%).
This impact is even more pronounced in regional NSW, where the report found that universities lead 50% of CAISH entities, making them crucial for supporting startups outside major cities.
Universities are also working hard to support diversity in the startup ecosystem, particularly for underrepresented groups like women and First Nations entrepreneurs. In NSW, 27% of startup founders are women, and universities are helping close the gender gap with targeted initiatives.
Networking and community building
Connecting entrepreneurs with industry professionals, investors, government and fellow startups is another vital function of universities. Through events, workshops and networking sessions, they foster a collaborative community that provides valuable advice and partnership opportunities.
The report found that nearly half of CAISH entities in NSW collaborate with other entities and startups, creating a vibrant environment where knowledge-sharing strengthens the ecosystem and fuels startup growth.
As Associate Professor Schweitzer explains, “Universities enhance the entrepreneurship ecosystem through collaborative research and partnerships with industry and government. They bridge the gap between innovation and commercialisation by offering education, funding and infrastructure. Connections with industry experts also help shape curricula, mentor startups and invest in promising ventures.”
He adds, “Universities create opportunities for students, researchers and professionals to collaborate on innovations that benefit both society and the economy.”
Economic impact
According to the report, startups supported by CAISH entities — including those run by universities — are making a big impact on job creation, investment and economic growth in NSW.
Since 2013, the number of CAISH entities in NSW has grown from 65 to 276 by 2023, with 69% in operation for more than five years. Many of the longest-running ones — those over 11 years old — are run by universities.
These entities report that their supported startups have created tens of thousands of jobs and generated substantial revenue, securing billions in funding through equity, venture debt, crowdfunding and IPOs. By nurturing these startups, universities play a pivotal role in stimulating both local and national economies.
As Associate Professor Schweitzer notes, “What drives this research is the need to better support innovation and entrepreneurship in Australia. Our country faces challenges like slow productivity growth, minimal investment in technology and high regulatory burdens. These complex issues can be tackled through innovation and entrepreneurship.”
Looking ahead, he hopes the research will shape policy, creating environments where entrepreneurship is fully supported and can thrive.
By providing education, resources, support and connections, universities are essential in fueling the startup ecosystem. Their efforts drive innovation, create jobs and enhance economic growth, establishing them as vital contributors to the ever-evolving landscape of entrepreneurship.
Want to learn more about how universities support startups? Join us at the 2024 UTS Startups Summit for a day of entrepreneurial inspiration. Hear from young UTS entrepreneurs sharing their journeys and learn how tech skills can lead to exciting careers across various industries — and much more.