PERSPECTIVES ISSUE 01 2017

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ALTERNATIVES
The UK is one the world’s great centres of learning
and is second only to the United States for its number
of world class universities. It has 164 higher education
providers and is home to over 2,000,000 students.
The Times Higher Education’s World University
Rankings places 32 UK universities in its global top 200,
of which three are in the top 10 and the University of
Oxford is at number one.
Continued growth in education at both a national and
global level has seen UK university income grow by 70%
since 2005 to £33.2bn. Around 10% of all internationally
mobile students come to study in the UK and they spend
approximately £11bn.1 In very real terms, universities
contribute significantly to national GDP and play an
important role in driving economic growth.
The Government is working to
determine its industrial strategy
and focus for future economic
growth in a post-Brexit United
Kingdom. David Feeney considers
the role of universities and their
importance in driving economic
performance going forward.
By David
Feeney, Student
Accommodation
Advisory
A key economic sector
Universities UK, the representative organisation for
the UK’s universities, estimates that higher education
accounts for 2.8% of UK GDP and 2.7% of all employment.
This equates to around £73bn of economic output and
over 757,000 FTE jobs.
The Association of University Directors of Estates notes
that universities spend £2.75bn a year on capital projects.
The annual income of the University of Cambridge is
£1.6bn and of the University of Oxford is £1.4bn.
Engines for growth
There is recognition from Government that universities
are central to the UK’s economic growth in that they
“generate the know-how and skills that fuel our growth
and provide the basis for our nation’s intellectual and
cultural success”.2
Reflecting Government belief that the knowledge
economy will drive future growth, there has been an
increase in young people going to university from 19%
in 1990 to almost 40% today.
The 2013 Witty Review of Universities and Growth set
out the recommendations for university involvement in
driving economic growth. It noted that “universities have
an extraordinary potential to enhance economic growth”,
and “much of the UK’s comparative advantage in the 21st
century could be derived from our universities”.3
The role of universities is especially important in our
post-financial crisis world of stunted global productivity
in which UK productivity is 35% lower than in Germany.4
University/business collaboration is considered key
to unlocking productivity. The Higher Education
Innovation Fund (HEIF) notes that collaborations
between universities, business and communities return
£7.30 for every £1 spent. Collaborative research, which
currently stands at £4.2bn a year, grew by 6.2% last year
and is helping to drive economic performance in many
different ways.
Universities as the
Engine for Growth
PERSPECTIVES
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ALTERNATIVES