We propose ways that universities can enhance their economic impact at a local level.
The UK’s higher education sector is worth over £73 billion to the economy. As many as 757,268 full-time equivalent (FTE) jobs have been created by the sector, of which 320,000 are staff directly employed by universities. In 2011, higher education contributed 2.8 percent of UK GDP. Reeling off these stats together it is clear that the higher education sector already plays a strong role in economic growth. In our upcoming report, UniverCities: the knowledge to power metro growth, we will propose ways that universities can enhance their economic impact at a local level.
The government invests over £7 billion of public funds in the higher education sector each year to maintain the quality and competitiveness of its teaching and research. There is potential to maximise the return on investment by considering the impact of all higher education expenditure on local economic growth. Universities should encourage greater prosperity in their metros by liaising with local businesses in need of research or access to a pipeline of talent, for example.
Image Source: The Guardian
Our work has found some universities are already setting the pace. However, the onus to make the most of universities as assets should also be shared by metros. It’s easier for many metros across the UK to retain the graduates they’ve produced on their doorstep, rather than to attract others following graduation. Metros should lead on retention and utilisation of graduates; for instance, Cardiff has already set a precedent in this regard by introducing ‘golden handcuff’ arrangements for high performing PGCE graduates. The arrangement commits graduates to teaching in the city for a certain period of time, and in exchange the Welsh Government pays off the graduates’ student loan debt.
Metros and universities can also partner to stimulate graduate enterprise in the area. Co-investing in start-up incubation and acceleration space would help graduate businesses establish a home in the local area while in initial phases of growth. There are a number of examples, such as the Engine Shed in Bristol or the Hatchery in London, that serve as models for the rest of the UK.
Finally, universities make important linkages to international talent – the UK remains one of the most popular destinations for students from abroad and 11 of its universities are part of the top 100 according to the Times Higher Education World Rankings 2014-2015, out today. As others have pointed out before, it’s a shame that after these students receive a world-class education, they are then immediately sent packing to put their newly-acquired knowledge and skills to use elsewhere. Since the post-study work route has closed for graduates, the Graduate Entrepreneur visa presents an opportunity to retain international students in the UK by rewarding their entrepreneurial spirit. However, the low take-up of visas (174 were allocated in 2013 out of a possible 1,000) signals that there is scope to reform the visa so it is more flexible in order to boost numbers.
We’ll be considering the full range of issues that universities face in fostering metro growth, as well as potential solutions, at the launch of our report in Cardiff on 14th October. Jim O’Neill will be chairing and we’ll have a diverse panel comprised of representatives of the higher education sector, investors and business leaders. If you’d like to join us, you can register here – otherwise, follow us on Twitter on the day of to tune into the discussion.