More startups are being formed at Illinois universities than ever before, and those entrepreneurs are becoming more likely to remain in-state after they graduate.
That’s according to a new report from the Illinois Science and Technology Coalition, a non-profit that aims to measure and strengthen the state’s innovation economy. The ISTC found that over the last five years, students and faculty at Illinois universities founded 942 startups, which is the largest volume of startup activity the state has seen since data has been collected. That number is also more than double the amount of startups that were formed in the state during the previous five-years from 2009-2013.
But perhaps more importantly, the majority of those new businesses are opting to stay in Illinois. More than four out of five (81.3 percent) of local university-born startups that were founded in the last five years are still in Illinois today. That’s the highest percentage the ISTC has found since it began collecting this data.
Of those 942 startups, 74 percent are still active, 25 percent are inactive, and 1 percent have been acquired. Local university startups raised $877.5 million during the past five years, which is triple the amount from 2010-14.
The report also found that startups spun out of local universities are more likely to be founded by women—28 percent of student and faculty startups have a female founder, compared to 17 percent nationally.
But as Illinois university startup activity hits a record pace, there are still some challenges to overcome, according to the report. An estimated 4 in 10 university-born startups have a foreign-born founder, and given the current political environment around immigration, Illinois schools could lose out if fewer foreign-born students come here to study. The ISTC is working with other groups to push the Trump administration to implement the International Entrepreneur Rule, which allows foreign-born founders to launch startups in the United States.
State budget cuts have also hurt Illinois universities, ISTC President and CEO Mark Harris said in a recent Sun-Times OpEd, resulting in fewer resources and higher tuition costs. That has led to fewer Illinois high school graduates opting to stay in state for college. In 2002, 71 percent of local high school grads went to college in Illinois. In 2015, it was just 55 percent.