The number of start-ups in the UK increased by 4.6% in 2015, but growth rates in university cities have been described as a ‘concern’ by tech industry experts.
According to official figures from Companies House, 608,100 new businesses were started in the UK in 2015. However, in Cambridge, the number of tech start-ups dropped from 15.9 per 1,000 people to nine in the same year. Similarly, in Oxford, just 6.8 start-ups per 1,000 people were created in 2015; something which has called into question the legitimacy of these university cities’ reputations as ‘entrepreneurial hubs of the future’.
Graduates Reluctant to Go it Alone
While the barriers into the world of business have never been lower, a recent study by Chinese human resources website Zhaopin found that graduates now prefer to find employment than start their own business.
Although a regionalised study of 4,000 graduates in China, the research does seem to suggest that students are becoming increasingly reluctant to work on their own projects. Bringing this change of dynamic closer to home, a recent article by the Guardian may shed some light on student’s unwillingness to become entrepreneurs.
Citing a letter from recent graduate Simon Crowther to his local MP, the Guardian’s article outlined how he was accruing £180 of interest on his student loan each month. With an outstanding debt of £41,976, Crowther was urging those considering university as an option to really think about the financial implications before applying.
Money Doesn’t Have to be an Issue
With crippling amounts of debt being yoked around a graduate’s neck, it’s little wonder that starting up a business is the last thing on their mind when they leave university. However, while cost may be a contribuing factor for graduates not wanting to set up their own businesses, it’s an issue that might not be as prohibitive as many assume.
Indeed, the cost of setting up a business has never been lower thanks to the Internet. According to a report by This is Money back in 2013, the cost of starting a so-called ‘bedroom business’ was just £325. Of course, this figure doesn’t take into account a number of ongoing costs, but it does suggest that setting up an online business is cheaper than many assume.
In fact, thanks to the growth of cloud technology, costs are even lower than they once were. Security has long been an issue for online businesses with expensive hardware often accounting for a large amount of their budget. However, modern website application security in the form of web application firewalls (WAF) offer a cost-effective solution for online entrepreneurs.
More Effective Tech Means More Opportunities
Capable of intelligent ID recognition (knowing which visits are malicious and which aren’t), IP address monitoring and real-time error alerts that can detect the latest threats, WAF services now provide comprehensive security for smaller sites. Not only that but, with WAF service providers offering free trials and tailored monthly plans, small start-ups can secure their sites for a lot less than many realise.
There’s no doubt that graduating from university with a mountain of debt is one of the main reasons why students are becoming increasingly reluctant to start their own businesses. However, with tech costs continually falling and security now easier to implement, creating a start-up doesn’t have to be the financial burden it once was.
While many graduates will be happy to work for an employer and start chipping away at their debt, it’s important that they also recognise that this doesn’t have to be the case in an age of cloud-based computing.