From Dandy to digital: universities transforming regional economies
By Sir Richard Lambert, Chancellor of the University of Warwick and former Director-General of CBI
A generation ago, Nottingham was a major manufacturing centre. It boasted the world’s largest bicycle factory, with 11,000 employees, and was home to other big engineering companies as well as makers of textile, tobacco and consumer products. And its university had around 8,000 students.
Today, most of the manufacturing has disappeared, to be replaced by a number of large companies in the services sector, and the city’s universities have around 40,000 students. They make a large contribution to the regional economy, both as big employers and through the spending power of their students. And they make at least as large an indirect contribution as leading centres for innovation and collaborative research and as the source of highly skilled graduates for the regional and national jobs market. And from their position at the heart of the region’s cultural and intellectual life, they make the city an attractive place in which to live and work. This story is repeated all across the UK, and helps to explain the central role that universities play today in driving economic growth across the regions and nations. One of the most positive features of the past 20 years has been the renewed energy and vigour of so many of our cities, a process which has been shaped in good measure by the university system.While other parts of the economy have experienced wildly volatile times, the higher education sector has provided a stable and growing base of economic activity. And universities are set to become an even more significant engine for growth in the future ¬provided they are not fettered by government red tape or inconsistent policymaking.
It is obvious that the rapid growth in student numbers has had a dramatic impact on some towns and cities: one striking example is Loughborough, which the university dominates. But beyond the sheer scale of their activities, their contribution to regional growth can be grouped under four main headings.
First, they have helped to rebalance economies which have had to face radical changes in their business infrastructure. For example, following sharp declines in aerospace manufacturing in its area, Hertfordshire University set out with the specific goal of educating young people to meet the needs of new employers in the region – and has achieved real success in this respect.
The message of all this is that the future economic wellbeing of the UK will depend on its capacity to develop innovative new products and services and to increase the rate of productivity growth from the present lacklustre levels.
Second, they are in some regions just about the only institutions where investment in science is taking place. Given the links that exist between research intensity and economic prosperity, the importance of this activity can hardly be overstated. An example here isYorkshire and Humber, where research spending by business is well below the national average, and the government puts very little into research funding outside the university sector. By contrast, the research¬active universities in the region are among the heaviest investors in science in the UK.
Universities’ contribution to supporting innovation and entrepreneurial activity, especially in the technology sector, comes third on the list. Anyone who visits technology¬based firms in Northern Ireland will quickly realise the extraordinary role that Queen’s University has played in generating entrepreneurial talent across the province. Companies like Randox, the medical diagnostics business, and Lagan Technologies came from Queen’s and have created high value jobs in an area that badly needs them. Queen’s ranks at the top of the league tables for the revenues and jobs created by its spin-out companies.
In some cities, the transformation brought about by successful universities is immediately visible. My favourite example is Dundee: I am old enough to remember when it was famous for being the home of three nineteenth century industries
– jam, jute and journalism, and not much else. But over the past two decades, the research excellence in life sciences at Dundee University has attracted some of the world’s great pharmaceutical companies, like GSK and Pfizer, to the region. In the same city, Abertay University has become a hub for the electronics games industry: take a look on its website at the video Dare to be Digital to see what this can mean.
Readers of Dandy and the Beano will be relieved to know that at least one of its old industries – journalism
– still flourishes, with the long established publishing house D.C.Thomson making waves in the digital world. Subscribers to Dandy can now search online for Doctor Doom’s Whoopee Cushion of Doom.
Fourth, the university system helps to balance the extreme differences in economic wellbeing that exist across the UK. For example, the North East remains one of the poorest parts of the country. According to research by Universities UK, the region’s HE institutions provided 13,715 full¬time equivalent jobs at the last count, and supported a further 14,683, mostly in the North East, making them a critical part of the region’s economic infrastructure. Their total revenues amounted to nearly £1bn in 2007¬08, with an additional £1.3bn being generated by knock¬on effects in other industries.
On the other side of the country, the merger between Manchester University and UMIST was explicitly designed to counterbalance the so¬called golden triangle of Oxford, Cambridge and London by creating a world class research¬intensive university in the North West of England. And on a much more modest scale, anyone who visits business people in the city of Lincoln will quickly be made aware of the impact their new university – it was created in 2001 – has had on economic activity and civic pride. Among other things, it has created 3,000 new jobs, helped to double the local economic growth rates, and supported dozens of new businesses.
The message of all this is that the future economic wellbeing of the UK will depend on its capacity to develop innovative new products and services and to increase the rate of productivity growth from the present lacklustre levels. Research excellence and a highly skilled workforce are essential components of both these requirements. For all these reasons, the UK’s university system will play a very large part in its future economic success.
Sir Richard Lambert is the Chancellor of the University of Warwick and the former Director¬General of CBI. He previously chaired the Lambert review of Business¬University collaboration.
