The UK needs strong universities for growth – the data speaks for itself

Saying that higher education in the UK is going through a period of change may be an understatement.

Many column inches have been taken up with the changes to funding for teaching in all the countries of the UK. Important as these changes are it’s vital that we don’t forget the significant impact higher education and universities in particular, have on the UK’s economic and social well being. Universities UK’s new visual data report Driving Economic Growth shows this in full technicolour.

Higher education didn’t play a big part in the Chancellor’s statement this week, but the announcement on VAT on shared services and the launch of HE Global, an online portal to help universities build up their international presence are welcome steps. But universities have a bigger part to play than you may have been led to believe this week and it’s especially heartening to see that the FT agrees with us. (Subscription.)


Figure 1: Share of world citations

Figure 2: Relative index of share of world citations per unit spend on GERD

Research output 
There are not many areas where we can say the UK is able to compete, and even eclipse, countries such as the US, Germany, China and Japan, but research output is one of them. Our competitors may be bigger and richer, but with a greater bang for buck the UK punches above its weight to lead the world in productivity. You only have to look at the level of citations per unit of funding and in contrast to many of our competitors a large proportion of this research is conducted at universities.

Figure 3: Potential for growth of high level skills in adult population, 2009



Graduates are key

UK Universities have a long tradition of contributing to major breakthroughs and innovations. And this world leading research will be key in helping generate the growth of tomorrow. Equally as important is universities core function: producing graduates who enable the UK to compete globally. It is often said that the UK has too many graduates. But impressive as the recent increases in participation are they have only meant we are playing catch up with our competitors. These countries are in a race to increase the skill levels of their populations, with developed nations wishing to consolidate their positions as world leading economies and developing nations wanting to join them. By 2020 it is estimated that China will be producing more graduates than the US and EU combined. These are figures that should make everyone sit up and take notice.

Figure 4: Higher level skills in the UK creative sector, 2010

An innovative economy needs graduates

Innovative graduate-led companies will be doing more than their fair share at pulling us out of the economic doldrums. Compared to UK business in general, innovative companies generate a disproportionate number of jobs. And they’re more resilient, so are better at weathering economic storms.  You only have to look at the creative industries, a key plank in the government’s growth plans to see how critical graduates are to their success.

And let’s not forget that UK higher education is one of the most thriving export industries. But it’s a tough world out there and the likes of Australia and Canada are snapping at our heels. The current climate and messages emanating from the government, in such a competitive environment, are putting our envied position at stake. In 2010, universities contributed £8.3bn in export earnings for the UK economy and this is projected to increase to at least £16.9bn by 2025. Aside from the benefits to the academy, international and cultural relations, we simply can’t afford not to attract the brightest and best, from every corner of the globe.

Driving Economic Growth is a new kind of report for Universities UK and I hope you agree that it brings the many great and insightful facts and figures about UK universities to life.  It’s part of a new series ‘Higher Education in Focus’ looking at the shape and impact of the university system, so watch this space for more. Please let us know your thoughts in the meantime!

Jovan Luzajic

Senior Policy and Data Analyst

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