The kids are alright
The case for increasing global youth mobility
This is the third post in our three-part deep dive into our recent report, Job Creators 2024 – in which we revealed that 39% of Britain’s 100 fastest-growing companies have a foreign-born founder.
You can read the first post here – in which we explain how immigration reform can be a ‘no-regrets’ approach to industrial strategy – and the second post here – in which we advocate for ways to make the immigration system more startup-friendly.
One of the most rewarding parts of carrying out the research for each edition of our Job Creators reports is speaking directly to the foreign-born founders behind the companies in question. We do this primarily to showcase their individual stories, and it also allows us to gather other data about our sample of entrepreneurs each year. One of those pieces of data is the pathways they followed to settle in Britain.
What stands out here is just how many of them first arrived as students. I can’t say conclusively, but I’d happily wager that it’s the most common way that these gifted and successful people initially came to the UK.
This is hardly surprising. British universities are among some of the most prestigious in the world. For people growing up overseas, these will feature highly in their conception of Britain as a country, and entice them to eventually study here.
Part of the lure of attending a British university is the opportunity to also immerse oneself in Britain’s thriving ecosystem of innovative companies working across cutting-edge industries – offering career opportunities that many students’ home countries can’t match. Since July 2021, the Graduate visa has restored the right for foreign students to remain in the UK for up to two years – or three, in the case of PhD graduates – following the completion of their studies (this pathway previously existed as the Post-Study Work visa but this was revoked by then Home Secretary Theresa May in 2012). In 2023, 114,000 students used the Graduate visa, and evidence suggests the majority of them secure jobs promptly after moving onto it. From here, they are better placed to eventually transition onto a Skilled Worker visa, and really begin sinking their economic roots into the UK.
Only time will tell about the impact of the Graduate visa on our economy, but in a few year’s time, don’t be surprised to hear that it was a pivotal factor in tempting the next trailblazing startup founder to launch their business here rather than elsewhere.
As attractive as Britain’s universities are, other eminent institutions do exist around the world – also incubating the next generation of entrepreneurs. Fortunately, Britain recently implemented an ingenious solution to ensure that even if we’re not educating them, we can still tempt them to our shores once they graduate. The High Potential Individual visa is an unsponsored visa route that allows graduates of top international universities to come to the UK and enjoy similar opportunities to those on the Graduate visa.
However, the HPI visa is not without its flaws. Currently, the HPI visa is based on a methodology that states if a university features among the top 50 on at least two of three predetermined ranking lists, graduates from that institution are deemed eligible.
Where the issue creeps in, however, is with how those rankings are drawn up. Little if any weight is given to student outcomes like employability or earnings potential, and when we carried out analysis of the HPI visa in our report True Potential, we found that graduates from the majority of the top 25 global universities by average earnings are not eligible for the visa, including the Indian Institute of Technology Ropar, which topped the list.
As we explain in Job Creators 2024, the simplest way to realise the HPI visa’s own potential would be to expand the eligibility criteria to include the top 100 universities on the three ranking lists. This change could be enacted immediately, and would broaden the visa’s reach, opening up pathways for more top talent to come to the UK. But to address the root issue of the HPI visa’s eligibility methodology, we should consider incorporating earnings data as a more accurate proxy for determining which universities’ graduates should qualify for the visa.
This is far from the only thing we can be doing to make it simpler for gifted youngsters to deploy their talents in the UK. Another policy we propose is to extend our existing Youth Mobility Schemes – which grant those aged 18 to 30 (or in some cases 35) the right to come to the UK for up to two years – to more countries. Recent newspaper reports have splashed how this may be on the table for the EU, and we agree it should be. Freedom of Movement which existed before Brexit was another key route taken by entrepreneurs in our Job Creators series, and this would be a targeted way of emulating it.
We also think a Youth Mobility Scheme should be offered to the US – perhaps as part of a wider trade deal, given how stuck negotiations have become lately. Consistently, our analysis has found that individuals from America have established the plurality of Britain’s Top 100 fastest-growing companies that have a foreign-born founder. Offering a Youth Mobility Scheme for the US could be a fantastic way to give talented Americans a more direct route into Britain.
Like many countries, Britain’s population is steadily ageing. In 2022, around a fifth of the population were aged 65 years or older. Fifty years prior, the figure stood at 13%. Projections from the Office for National Statistics suggest that, 50 years hence, 27% of the population will be.
While there are reasons to celebrate this trend – people living healthier, longer lives is surely a good thing – there’s no getting away from the fact that it also creates problems in need of solutions. A population which skews old means those of working age have to toil all the harder to cover the costs of pensions and other benefits.
Allowing young, aspirational individuals to come into the country and contribute towards the economy is a surefire way to address this demographic dilemma. And if our analysis is anything to go by, it proves that immigrants play an outsized role right where it matters most – founding the fast-growing and innovative businesses that haul an economy into the future.
As we’ve seen in each of the three posts in this series, the contribution to Britain’s economy made by those born outside its shores is as broad as it is deep. At the top of this one, I mentioned how much of a privilege it has been to talk to some of the founders of those fast-growing companies. It seems fitting to give them the last word, so here’s some of the best quotes we’ve gathered since we started our Job Creators project:
“It’s in the DNA of an immigrant to want to achieve things”
- Nazim Valimahomed, Co-Founder, Kroo
“If you’re coming into a country from outside, you’re going to see some things differently”
- Shiladitya Ghosh, COO and Co-Founder, Mission Zero Technologies
“The UK welcomed me years ago and allowed me to grow as part of the society and I am happy to be returning the favour by contributing to the growth of the UK economy”
- Vincent Fraux, Co-Founder, Oxford Space Systems
“I came to the UK to get a degree in Computer Science from KCL, I stayed for the startup ecosystem”
- Joshua Wohle, Co-Founder, Super Awesome
“We talk all the time about moonshots, but you’d never take one on a cost-benefit analysis”
- Paul Domjan, Chief Policy and Global Affairs Officer and Co-Founder, ENODA
“Austria is a small, beautiful country, it is also one with limited opportunity, where success is often determined by who you know. I had been to London before and I had been impressed by the openness, willingness to engage with people from other countries, and the relative meritocracy that is in place. I felt that anyone would give you a chance if you had something to add”
- Christian Nentwich, Founder, Duco
“I am not sure if being an immigrant made me more likely to become an entrepreneur, but I do believe the experiences it provided me helped me being more prepared for the challenges during the entrepreneurship journey”
- Miguel Martinez, Co-Founder, Signal AI
“It felt ‘easier’ for me to become an entrepreneur as an immigrant because I had already left my comfort zone behind, making the jump to entrepreneurship didn’t feel as daunting. Being an immigrant has made me stronger in the face of uncertainty, which helps dealing with the ups and downs of starting your own business”
- Virginie Charles-Dear, Co-Founder, toucanBox
Thanks for reading! If you’d like to check out our immigration research in full, you can find it on our website here: