Universities at the centre of growth: The role of business-engaged universities

By Libby Hackett and Sam Jones –

“A business facing university has a revolving door with business and the professions – not an interface or a portal but true interaction”[1]

Universities are key to growth. They play a central role to the UK economy and society, growing future talent, research and innovation. The economic and social benefits of our diverse university sector have been well documented over the years as commentators and government have tried to influence the role and shape of the sector. At this moment in time, between Browne and the forthcoming White Paper, we should take the opportunity to reassert the role of universities and their contribution to the future development of our country as we seek to grow out of the recession. We must strengthen our vision for the UK economy, built on knowledge and innovation that is driven by a successful and diverse university sector. It is through this approach that we will be able to fully realise the contribution that universities make, in particular the role of business-engaged universities.

An innovation-driven economy

Innovation and the commercialisation of research are key drivers of growth. Recent research has confirmed that innovation and high-tech approaches are the most likely to be successful in driving economic recovery and economic growth in the UK economy. Innovation was responsible for two-thirds of productivity growth between 2000-2007 and was the common defining feature of the fastest growing 6% of businesses between 2002 -2008. These businesses generated half of all new jobs created during this time.

Human capital, particularly graduate-level skills, is now the primary indicator of future economic growth. The proportion of our working population with graduate-level skills, along with our science and research base, will determine the pattern of our future economic growth and our ability to achieve the innovation-based economy that we are striving for.

If we stand still we will fall behind – our global competitors are continuing to invest heavily in universities despite their own budget deficits. In 2000, the UK was 3rd amongst top industrialised nations in terms of the proportion of young people graduating. In 2008 we had fallen to 15th position because our competitor countries have been investing at a faster rate than us.

Universities key to growth

Universities are no longer just a part of the education system; they play a central role in driving economic growth. Many countries are putting universities, innovation and research at the heart of their growth strategies. Obama has declared the USA will “out-innovate” and “out-educate” the world by investing in research and development and calling the private sector to put more money into finding solutions to the global challenges facing society.

The USA is not alone. President Sarkozy is taking France in the opposite direction to the UK by recognising higher education and research as the solution to the recession and bringing forward and consolidating investment in both. In Australia, the Government last year announced a 25% increase to the previous year’s budget for science and innovation. In Germany, Chancellor Merkel has announced their goal to create a ‘Bildungsrepublik’, an educated and learning republic, involving a €12 billion increase in the budget for education and teaching by 2013.

In fact, public investment in our universities is already lower than the OECD average – we are lagging behind countries like Poland and Slovenia as well as the US, Canada, Sweden and Germany. We have to consider carefully the consequences of continuing to move down this ranking in terms of our international competitiveness. We need to ask what is it that these countries and, indeed, most other OECD countries are recognising that we are not? We need to move beyond this debate and establish the central position of universities in our economy. Global companies will not invest in the UK without serious public commitments from this Government about their strategic investment in higher education and research.

A sector to meet the challenges

One of the strengths of our university sector is its diversity. We must recognise that it is a vital, rich ecosystem with different and important areas each playing their part. At University Alliance we are striving to demonstrate the importance of the role business-engaged universities are playing, for the sector, society and the economy.

Universities working in partnership with business makes sense. Not just for the economy but for the future of talent, research and innovation in the UK. Strong links with business are a central focus of Alliance universities. The University Alliance represents twenty-three large universities that work closely with business to deliver world-class research, a high quality student experience and work-ready graduates across the UK. These are universities undertaking world-leading research, often in highly rated STEM departments, working closely with industry to generate near-market solutions and start new businesses.

Our recent report, 21st Century universities: engines of an innovation-driven economy, found that the most successful approach is one where business engagement is embedded across the university, through everything it does. The aim of Alliance universities is to have a model of knowledge exchange rather than knowledge transfer – business engagement isn’t just an add-on at the end of the research process. Rather, it needs to be intricately woven through everything the university does. New ideas and innovation are formed out of this partnership, together driving economic growth.

Alliance universities have strong expertise in this approach. They have developed strong partnerships with both national and international business to actively embed businesses engagement across all they do. This builds collaboration on curriculum design, research delivering solutions, graduates, research and innovation that is relevant to the needs of the economy and society. The results of this approach can be seen in the high proportion of professionally accredited courses they deliver, their high graduate employability levels, world-leading research and the impact they have in the UK and internationally.

To be able to grow and compete in an increasingly globalised innovation-driven knowledge economy, the UK has to put science and innovation at the top of the agenda. We need the public commitment to this focus and to long-term investment. As Lord Sainsbury so aptly put it:

“The best way for the UK to make the most of globalisation opportunities is to support the restructuring of British companies into high-value goods, services and industries. We should seek to compete with emerging economies in a ‘race to the top’ rather than a ‘race to bottom’”[2].

This approach to business engagement is key to economic growth in the UK. With the state of the economy and its fragile growth, we need a clear vision for the future of the economy. We need a vision that recognises that universities are central to the growth strategy and to strengthening the UK’s global competitive advantage. We need to send a clear message to our Global competitors and secure the confidence of inward investors and UK Plc by putting into place the pillars for growth and a sustainable future. Without this clarity we risk missing the opportunities to become leaders in the global knowledge and innovation economy that emerges over the years to come.

Libby Aston is Director of The University Alliance and has held previous roles at The Russell Group, the Parliamentary Select Committee for Education and Skills, the Higher Education Funding Council for England (HEFCE) and the Higher Education Policy Institute (HEPI).

Sam Jones is Head of Communications and Public Affairs at The University Alliance, with previous roles working for Vince Cable and Peter Mandelson at the Department for Business, Innovation and Skills and in the private sector, including with Harrods.

The University Alliance is a group of 23 major, business-engaged universities committed to delivering world-class research and a quality student experience around the UK.

[1] Professor Tim Wilson (2011) Keeping knowledge at the centre of growth, http://www.university-alliance.ac.uk/Keeping_knowledge_at_the_centre_of_growth_A5.pdf [Accessed 15.04.11]

[2] Lord Sainsbury of Turville (2007) The Race to the Top: A Review of Government’s Science and Innovation Policies http://www.rsc.org/images/sainsbury_review051007_tcm18-103116.pdf

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