Graduates from the University of Teesside are being encouraged to stay in the region and become entrepreneurs. Deputy Business Editor Julia Breen reports.

SURROUNDED by plants and computers and the chaos of a recent move, three students sit in their new office, the sun streaming through the windows.

The scene is a long way from the popular image of students whiling away the hours with several pints of lager, but Sara Waters, 22, Richard Himsworth, 22, and Matt Sibley, 20, prefer to remain focused on their business.

The three could not find suitable placements for their sandwich year, so they set up animation and computer graphics company Fake Believe.

The University of Teesside, bringing itself in line with government targets to encourage entrepreneurship, provides offices at a peppercorn rent, desks and phones, and can arrange grants for businesses started by graduates.

Helping Fake Believe involved bending some of the rules because undergraduates (rather than graduates) setting up their own business was a first for the university.

But after only a year and a series of lucrative contracts, the trio are expecting their company to achieve a turnover of £20,000.

Although they are returning to their final year of studies, they plan to keep the company going by employing a student on a placement year until they graduate next summer.

Mr Himsworth said: "We are currently working on a 2D animation series, a sort of British version of South Park. It is animation for adults."

The series is based on the Roman emperor Gaius Caligula, notorious for his debauched lifestyle.

"We have written the scripts, got the voice artists in and we are working on the animation now.

"We will be showing it at some of the festivals - at the moment we are trying to get a place at the Edinburgh Festival."

Miss Waters said: "When we go back to the final year of our course, we will leave the company running and will still be available for jobs. By the end of our courses, we will have high-quality show reels that we feel will be good enough to impress people. We have learned how to present our work and feel better equipped to make a success of our business."

Fake Believe has also carried out work for Onisoft, a computer game company set up by two Teesside graduates from Canada, and also animation trailers for the university.

The company is only one of more than 50 start-up companies launched at Teesside's campus since 2000.

Upgrade 2, the university's programme of graduate enterprise, provides advice on business planning and intellectual property, as well as sources of funding and local business support networks.

Each business is provided with a mentor, and all start-up companies have access to academic staff for advice, as well as students seeking part-time work.

The spirit of entrepreneurship is seen as crucial in helping Teesside regenerate following the loss of shipbuilding and cutbacks in the steel and chemical industries.

Most of the new companies at Teesside work in new media and design, but the university is also encouraging start-ups in electrical engineering and computing.

Fake Believe, along with a growing number of graduate start-up businesses, has just moved into a Victorian school on campus, which has been renovated into offices ideal for small businesses.

This graduate greenhouse is ideal for incubating small businesses, but the university encourages the companies to leave after three years, once their businesses are better established.

Maurice Tinkler, university graduate incubation manager, said: "We encourage graduate businesses to be independent and self-sufficient as soon as possible after their creation.

"We aim to retain graduates in the region and encourage companies in new technologies.

"The initiative places the university at the heart of the region's economic future. Having established their business, the graduates go out into the northern region and start to grow."

Professor Mike Smith was appointed as deputy vice-chancellor of the university at the end of last year to spearhead a drive towards more research and enterprise, particularly in the digital area.

He has also started an MSc course in small business development - the first of its kind - to teach business advisors how to give the best advice to start-up companies.

The block release course is aimed at people in the public, private and higher education sectors who regularly advise small businesses.

Prof Smith said: "It is all about trying to encourage start-ups and spin-outs. On the course at the moment, we have 12 participants, four from business incubators in universities, two from the public sector and the other six are from the private sector."

The university hopes to play a major part in the regeneration of the Tees Valley, the latest example of which is the Middlehaven development in Middlesbrough, next to the Riverside Stadium.

Vice-chancellor Graeme Henderson has regular meetings with Middlesbrough Mayor Ray Mallon about the future of Middlesbrough, and hopes to link the university, the town centre and the Middlehaven development.

Graduate businesses that leave their incubation units are moving into regenerated sites, close to Middlehaven and also into the Tees Barrage area.

It is hoped that the businesses started by graduates will be the wealth creators of the future for the Tees Valley, strengthening the economy of the whole region.