Universities in the UK now generate £59 billion for the UK economy putting the higher education sector ahead of the agricultural, advertising, pharmaceutical and postal industries, according to new figures published today.
This is the key finding of Universities UK's latest UK-wide study of the impact of the higher education sector on the UK economy. The report - produced for Universities UK by the University of Strathclyde - updates earlier studies published in 1997, 2002 and 2006 and confirms the growing economic importance of the sector.
The study found that, in 2007/08:
- The higher education sector spent some £19.5 billion on goods and services produced in the UK.
- Through both direct and secondary or multiplier effects this generated over £59 billion of output and over 668,500 full time equivalent jobs throughout the economy. The equivalent figure four years ago was nearly £45 billion (25% increase).
- The total revenue earned by universities amounted to £23.4 billion (compared with £16.87 billion in 2003/04).
- Gross export earnings for the higher education sector were estimated to be over £5.3 billion.
- The personal off-campus expenditure of international students and visitors amounted to £2.3 billion.
Professor Steve Smith, President of Universities UK, said: “These figures show that the higher education sector is one of the UK's most valuable industries. Our universities are unquestionably an outstanding success story for the economy.
“Universities have increased their impact by over £15 billion since 2004, generate about 2.3% of UK GDP, and employ 1% of the UK workforce. Across a range of activities, universities, through their dedicated staff, are doing more than ever to support the wider economy. With growing pressures on public spending and with the all-important debate about university funding about to start, it's crucial that we recognise the growing importance of higher education to the health of the economy.”
Professor Smith added: “We must not forget either about the non-economic benefits that universities provide. Universities open their doors to business and local communities, providing space for public debate, access to art, music, theatre and sports facilities. This social and cultural contribution to national life should not be underestimated either.”
Lord Mandelson, Secretary of State for Business, Innovation & Skills, said: “Universities are critical to this country’s economic performance contributing about £ 59 billion. This importance will only grow over the next decade which is why we are publishing a blueprint for the future of higher education and the role it will play in securing the country’s long term prosperity.”
Ursula Kelly of the University of Strathclyde, the report’s co-author and director of the project, said: “This new report confirms the growing economic importance of higher education to the UK. The results highlight the increasing policy significance of higher education, both in terms of its contribution to GDP and its relative effectiveness in generating economic impact.”
How things will pan out for British higher education should be interesting to watch. To a higher extent than in the US, UK universities rely more on government funding than alumni donations and other fundraising activities. So, don't be surprised to more see cash cows--I mean, foreign students--take up more places at British universities.
Speaking of which, the current vice-chancellor at my alma mater is helping determine how things have progressed since fees were increased for home students:
The University’s Vice-Chancellor, Professor David Eastwood, has been named as part of the team chaired by Lord Browne that will look at the future of higher education funding in England. The Independent Review of Higher Education Funding and Student Finance, including the review of student fees, will be the first funding review since variable tuition fees were introduced three years ago.
The review will look at a range of key issues including levels of student debt, the rate of return from gaining a degree, and how higher fees might affect different groups such as ethnic minorities or disabled people.
It will also examine how universities have spent the £1.3 billion received from higher tuition fees, the effectiveness of student bursaries, and the balance of contributions to higher education funding by taxpayers, students, graduates and employers. When completed, the review team will make recommendations to Government on the future of fees policy and financial support for full and part-time undergraduate and postgraduate students.
Professor Eastwood says: ‘The findings of this review will be of great significance to the future of higher education, given the global challenges that universities face. Our task is a serious one: to make recommendations that help to secure the long-term financial health and vitality of Higher Education in this country.’
There will always be a British system of higher education, but will it still be the runner-up after America's? That is the question. In the meantime, the weak pound is making a British degree look attractive, especially after considering that an undergraduate degree only takes three instead of four years here.