Adam Smith Institute

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Press Release: Survey finds visa system is failing international graduate entrepreneurs

A ground-breaking survey reveals that the visa system is failing international graduate entrepreneurs who want to start a business in the UK. The report, Made in the UK: Unlocking the Door to International Entrepreneurs, released by The Entrepreneurs Network in partnership with National Union of Students (NUS), surveyed 1,599 graduate international students.

The survey finds a significant proportion of international students have entrepreneurial ambitions; however, in a competitive global economy, the UK isn’t the only option:

  • Although nearly half, 42%, of international students intend to start up their own business following graduation, only 33% of these students, or 14% of the total, want to do so in the UK.

The Tier 1 (Graduate Entrepreneur) visa was set up in 2012 to encourage international graduates to start their businesses here. However, international students surveyed aren’t convinced by it:

  • Just 2% of respondents intending to start a business following graduation applied for the UK Tier 1 (Graduate Entrepreneur) visa, with almost two thirds, 62%, saying they didn’t even consider it.
  • Less than half (46%) of respondents think their institution is certified to endorse them for a Tier 1 (Graduate Entrepreneur) visa, while 43% are not sure, despite 101 of the 163 UK Universities being certified by the Home Office.
  • Only 18% think that the UK has better post-study processes in place for international students than other countries; 32% think it is worse than other countries.

Based on these and further findings, the report puts forward nine recommendations for government, including:

  • Removing the Tier 4 ban on self-employment for those working within an institutional programme (curricular or co-curricular) or other accelerator.
  • Allowing UKTI-approved accelerators to endorse international students in their programmes under the Tier 1 (Graduate Entrepreneur) scheme.
  • De-coupling the risk for educational institutions in endorsing international graduates for Tier 1 (Graduate Entrepreneur) visas from institutions’ Tier 4 license. This should be made explicit in the official Home Office guidance and in the way the Home Office applies its audit procedures for institutions.
  • Reinstating a post-study work visa, de-coupled from the sponsor system, to allow international students to explore markets and industry before finalising their business idea for the Tier 1 (Graduate Entrepreneur) application. In fact, 81% of the respondents considering starting their own business are interested in the possibility of permanent residency under the Tier 1 (Graduate Entrepreneur) visa.

Philip Salter, Director of The Entrepreneurs Network, commented:

This report shows that our visa system isn’t supporting the entrepreneurial ambitions of international graduates.

In its current form, the Tier 1 (Graduate Entrepreneur) visa isn’t fit for purpose. We are training some of the world’s best and brightest young people at our world-class universities only to push them to set up their businesses overseas.

Lord Bilimoria CBE, founder of Cobra and Chancellor of the University of Birmingham, commented in the Foreword to the report:

As ever, it is the government’s attitude to immigration and student visas that is the most damning. Many students continue to feel a sense of alienation from the government, and we must continue to press for a more welcoming and attractive environment.

It is also damaging that the government continues to include international student numbers within the immigration figures, although the whole notion of an immigration cap is harmful. The reintroduction of the Post-Study Work Visa for postgraduates is rightly seen as a vital policy.

Alex Macpherson, Head of Ventures at Octopus Investments, commented:

Governments across the globe are considering ways to encourage the smartest graduates with the most potential to root themselves in their countries to develop ideas, create jobs and ultimately build world changing companies.

The growth in entrepreneurship that we’re seeing in the UK, in our schools, universities and business community, along with the development of new accelerators and increased sources of venture funding has put the UK in a strong, internationally competitive position to attract and retain some of today’s most talented and entrepreneurial minds. If we want the UK to continue to develop global billion dollar businesses then we need to ensure this remains the case and do everything that we can to encourage international students with entrepreneurial ambitions to remain on our shores and start businesses here.

Notes to Editors:

For further comments or to arrange an interview, contact Kate Andrews, Communications Manager, at kate@adamsmith.org / 07584 778207 or Philip Salter, Director of TEN, at philip@tenentrepreneurs.org / 07919 355290.

The Entrepreneurs Network is a cross-party think tank designed to bring entrepreneurs to the forefront of political discourse and help make Britain the best place in the world to start a business.

The Entrepreneurs Network is based within the Adam Smith Institute and is supported by Octopus Investments, one of the UK’s fastest growing fund management companies specialising in smaller company investing.