Government urged to introduce 10-year visas for overseas tech graduates

Obstacles to overcome

Duncan Johnson, chief executive of Northern Gritstone, which provides financial backing for innovative startup companies in the North East of England, said the region had the “world-class science” needed to create new innovation clusters – but that there were obstacles to overcome.

Speaking at a debate last week, he said universities in the North, including Manchester, Leeds and Sheffield, were responsible for £1.1bn of research a year – “not a million miles away” from the research spending of Oxford, Cambridge and London. But outside the “Golden Triangle” between the three centres, it was difficult to find the talented peopled needed to develop innovative businesses.

Northern Gritstone has addressed that by bringing in chief executives based in San Francisco’s Bay Area to run some of the businesses it has backed in the UK.

The lack of infrastructure in the North of England is also a problem. For technology clusters to work, organisations in a cluster need to be within an hour’s commuting distance of each other.

Leeds, Manchester and Sheffield are only 30 miles apart, but poor rail infrastructure means it takes an hour and a half to travel between them.

The government is being urged to work with regional mayors to create more local innovation centres and collaboration between universities and businesses. This has already happened in South Yorkshire and Manchester, and innovation clusters have been started in Bristol, Bath and Cardiff.

However, it’s going to take time for universities in the rest of the UK to reach the “critical mass” of science research needed to create new innovation clusters. “I think we will see a lot more clusters happening, but we are on a journey, and we have to take steps to get there,” said Johnson.

Entrepreneurship in schools

Kirk has called on the government to teach entrepreneurship in secondary schools to provide young people, the majority of which leave school without going into secondary education, with the skills to set up their own businesses.

Emma Jones, founder of Enterprise Nation, which supports small businesses, said that with teachers already facing heavy demands on their time, the best way to do this was to introduce entrepreneurship into existing subjects.

That could mean, for example, looking at how to create a sustainable business plan to support climate change in a geography lesson. Students should also be given opportunities for work experience in small entrepreneurial businesses.

Chi Onwurah, Labour MP for Newcastle Central and West, is the newly appointed chair of the Commons Science, Innovation and Technology Committee. She said encouraging entrepreneurial skills in schools could form a part of Labour’s curriculum review, and should also be reflected in careers advice offered to children.

Investment

Investment is one of the major themes of the October Budget. The UK has been bottom of the G20 for 27 out of the past 30 years for public and private sector investment, and that has had a knock-on effect on innovation.

Jones said small firms were shying away from raising money to invest and banks were becoming more reluctant to lend to small businesses because of international banking regulations such as the Basel accords.

One solution is community-focused lending. Community development finance institutions act as co-operatives to provide finance and support for businesses.

Jones said the government could also help by stepping up procurement from small and medium-sized enterprises.

The government announced plans some years ago to spend one pound in every three with small businesses by 2022, but has yet to meet its target.

A delayed Procurement Act, which was due to arrive in October but has been delayed until February 2025, could, however, encourage the government to award more contracts to smaller companies.

“We would love to see the government publish its innovation pipeline,” she said. “Could government publish all of the problem statements it is seeking to solve and then encourage business to pitch back to them with solutions?”

University funding

Johnson said there was an urgent need for better university funding. Most universities are making a loss on teaching undergraduates because of tuition fee caps, and the loss of overseas students because of visa restrictions, combined with high inflation, is hitting university finances.

The Advanced Manufacturing Research Centre in Sheffield, for example, has had to shut down its advanced nuclear programme as a result of university funding constraints. “There is an absolute danger of the goose that lays the golden eggs actually starting to wither,” he said.

Onwurah said the government had a team of ministers working on the idea of startup grants for companies in the regions. There was a need for more entrepreneurial cultures in universities and a need to encourage talented young people to study STEM subjects and use their skills after university, she said.

“The Labour approach of reforming skills to lessen the need for skills migration is a sensible approach, but we should be wary of the consequences for sectors like science and research, where it is precisely the fact that people are able to come here from around the world that sparks so much of our innovation,” said Onwurah.

Simple steps like making charges payable over the life of a student visa, rather than a single payment upfront, could make a big difference, without the need to extend student visas to 10 years.

“I think that entrepreneurial agenda is so worth pursuing,” she said. “I don’t think we can have really sustained growth without entrepreneurship, and we need to have that culture of growth and entrepreneurship across our whole country.”