The UK may have overtaken the US as the global centre for engineering startups, new research has revealed.
The research has been carried out to mark the fifth annual showcase of the Royal Academy of Engineering’s Enterprise Hub today (31 May).
It indicates that 63% of London engineers have founded their own business, while for the UK as whole the figures stands at 34% compared to 27% in the US.
The research finds that a generation gap has opened up between young graduate and academic entrepreneurs and those over the age of 40.
Furthermore, 1 in 10 of those over 40 have started or even considered starting a business, in contrast to a third of those aged 21-30, rising to half of 31-40-year olds.
The findings will prove encouraging reading for the UK government, as engineering enterprises will be essential to delivering the innovation and technological advances at the centre of the Industrial Strategy.
Ian Shott CBE FREng, chair, Royal Academy of Engineering Enterprise Committee, commented: “Life may begin at 40, but it is clear that world leading businesses start far earlier.
“The UK has lagged behind the US in commercialising its world-class research, so I am encouraged to see that a new generation of engineering entrepreneurs is rising to the challenge.”
The attitudes are changing
Attitudes toward enterprise appear to be changing, with fewer engineers now believing a ‘light bulb’ moment is essential for a business to succeed. For those aged 21-40, hard work and outstanding engineering skills were seen as most important factor, pushing the ‘light bulb moment’ into third place.
Just 1 in 10 of those aged 21-40 felt the flash of inspiration was essential, in contrast to 1 in 5 of those over the age of 40.
The research highlighted that, outside London, fewer engineers are converting ideas into the innovative products and services of the companies of the future. Just 15% of those based outside London had founded their own firm, significantly below all regions of the US barring the Midwest.
One explanation for this may lie in attitudes to risk. The survey showed that those outside London were 23% more likely to hold back due to worries that they might fail.
London is the world’s second best location for startups
San Jose and San Francisco (Silicon Valley) edged out London as the locations identified as best for founding an engineering enterprise thanks to a highly skilled local engineering workforce, cultural appreciation of engineering and ease of access to investors.
Frankfurt came in third, Tokyo fourth and Hong Kong fifth according to the poll of UK and US based engineers. In response to a question about what is required for enterprise to flourish, the engineers surveyed ranked access to funding as the number one factor, with access to customers and markets in second place and mentoring in third.
Shott continued: “We often think of the US as a hotbed of enterprise, but the results clearly show that an entrepreneurial spirit is alive and kicking on this side of the pond too.
“We founded the Enterprise Hub to bring together exceptional engineering business leaders, both emerging and established, for mutual gain. Given time and support they have begun to develop tomorrow’s world-leading innovative enterprises, extending Britain’s reputation for invention and creativity.”
Since 2013 the Enterprise Hub has supported more than 100 entrepreneurs and SMEs, helping them to commercialise their ideas without taking a penny in return.
To date 70 startups have been established as investable, high-growth companies, generating 300 jobs and raising more than £63m in follow-on funding.
Examples of successful Enterprise Hub members include:
Dr Katerina Spranger, who joined the Hub last year to further the work of her company Oxford Heartbeat on a tool that uses computational modelling to support brain surgery. The benefits of improved patient outcomes and reduced medical costs helped attract an NIHR i4i Connect grant to advance the technology.
Yang Lu, founder and CTO of Vivacity Labs, a startup hoping to improve urban mobility through smart, hyper-local data that gives real-time insight into traffic and commuter behaviour. Vivacity Labs is now working with several major transport operators and over 100 of its cameras are in use across Britain.