CEO Blog: Universities - economic powerhouses that support communities

03 Jun 2013

We have long understood the important role of a large industrial employer in a town or city. The shipyard, steel works and the coal mine are prime examples. When they have gone we recognise the devastating impact on jobs, self-esteem and the economic health of the community within which those enterprises resided.

Their demise usually triggers migration of young people away from the area and further decline as associated businesses struggle to secure replacement custom, leaving the elderly and unemployed to persevere.

The growth of higher education and the expansion of student numbers over the past twenty years has done much to deliver new opportunities often very different from the pitheads and the cranes which dominated many an industrial  skyline.

Universities have become replacement economic powerhouses essential to the micro economic climate of their towns, cities and regions.

The Higher Education Funding Council for England  has reported that UK Universities contributed £3.3 billion directly to the economy in 2010/11 and that 268 spin off companies were founded that year with University spin out companies now employing over 18,000 people.

In the north west region alone universities created an additional economic impact of over £3 billion and indirectly supported over 35,000 non-higher education regional jobs.

These are impressive figures. Every university in the country will have a story to tell, from the graduate establishing their own design company now employing one of the lecturers who taught them, to the many companies who employ their placement students once they have graduated.

But they are figures and impacts too often missed when we discuss higher education policy with its focus on the burden of cost to the individual student or the taxpayer. This approach ignores the wider societal benefits of a university operating within a town or city.

Universities are also custodians of museum collections, important public buildings, theatres and sports facilities with reduced rate access to local people.

Investing in higher education is about so much more than the student experience or the professorial job. It is about recognising the much wider role of universities in communities, cities and regions. The Cabinet Office and the Treasury would do well to remember this when they are considering which budgets to cut in the 2015-16 Spending Review.