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Higher education – a core strategic asset to the UK WWW.UNIVERSITIESUK.AC.UK

IN FOCUS Universities UK

HIGHER EDUCATION IN FOCUS: DRIVING ECONOMIC GROWTH

DRIVING ECONOMIC

GROWTH

ForewordOur universities are a core strategic asset to the UK. This publication showcases the critical role they will continue to play in reviving and sustaining economic growth across the country.

It is imperative that we maintain our position in what is an increasingly competitive global environment. The UK’s capacity to punch above its weight in terms of research output and productivity remains vital to this, as does continued investment in high level skills. And it is through investment in our universities that these will be delivered. Despite recent increases in the proportion of individuals participating in higher education, our aspiration must be to increase this further. The UK remains behind many of its competitor countries in terms of the proportion of graduates in its population and the distribution of high level skills within the country is still uneven. Success in the knowledge economy is the route to maintaining our competitive advantage.

Innovation will play a critical role in producing growth in the UK economy. Some of the most innovative discoveries have their origins in research conducted at UK universities. Countries with high levels of innovation also tend to have, on average, higher proportions of graduates in their populations and a stronger track record of investment in higher education. The creative sector is one example of an innovative UK industry in which graduates dominate.

Universities make connections across the UK economy and society, through upskilling and reskilling the workforce, through providing research-informed training for teaching and healthcare professionals, and through the range of ways they interact with businesses. The connections are global, too, with UK universities bringing in substantial export earnings through their provision for international students both within and outside the country. Eric Thomas, President, Universities UK

0|1 Driving economic growth

IN FOCUS

20 UK higher education as an export industry

8(9) The link between innovation and economic growth

6(7) High level skills in the UK economy

18(19) UK higher education in a global market

4(5) The global race for a high skilled economy

16(17) Universities and business in partnership

2(3) The UK as a global leader in research and innovation

14(15) Lifelong learning for all

Section 1: Global competition Section 3: Connections

10(11) Where will growth come from?

12(13) From research to innovation

Section 2: Innovation

FIG 1.2

Population, 2010

United States 3.2%

United Kingdom 26.5%

Germany 2.8%

Germany 17.6%

Japan 2.7%

Japan 13.4%

United Kingdom 1.8%

United States 12.3%

China1.7%

China7.7%

Driving economic growth2(3)

Performance and productivityOf the four competitor countries the United States, Germany, Japan and China, the UK demonstrates the highest levels of productivity in number of citations relative to Gross Expenditure on Research and Development (GERD), with more than three and a half times more productivity compared to the world average.

The UK as a global leader in research and innovationDespite having a smaller population and lower levels of funding compared to competitor countries, the UK punches above its weight in terms of research outputs and leads the world in productivity, with more citations per unit of spending on research than our main competitors. More than a quarter of UK research expenditure is directed towards universities – a much higher proportion than in the UK’s competitor countries.

Section 1. Global competition

GERD as a proportion of GDP Proportion of GERD at higher education institutions

FIG 1.1

Expenditure on research and development, 2010

United Kingdom’s population 62.3m

Researchers per thousand population 4.1

Japan’s population 127.2m


United States’ population 310m


Germany’s population 82.8m


China’s population 1,350m


FIG 1.3

Articles published, 2010

IN FOCUS

FIG 1.4

Performance and productivity, 2010

FIG 1.5

Performance and productivity, 2010

China

331,000

Germany

118,000

Japan

112,000

United Kingdom

124,000

United States

465,000

Relative index of share of world citations per unit spend on GERD

Share of world citations

1.18United States

41.4%United States

0.75Japan

9.3%Germany

3.65United Kingdom

10.9%United Kingdom

0.57China

6.6%Japan

1.62Germany

7.6%China

FIG 1.6

Proportion of 25-64 year olds with a higher education qualification, 2009

FIG 1.7

Change in the proportion of 25-64 year olds with a higher education qualification, 1997-2009

15% 20% 25% 30% 35% 40% 45% 50%1997-2009

Australia

Canada

Finland

France

Japan

Korea

New Zealand

Norway

Sweden

United Kingdom

United States


Potential for growthDespite recent increases in adults with higher education qualifications from 23 per cent in 1997 to 37 per cent in 2009, the UK still lags behind competitor countries both in levels of skills in the general population (10th in OECD) and potential for growth as measured by the proportion of graduates amongst the young population (6th in OECD).

The global race for a high skilled economyThe last decade has seen significant increases in the proportion of individuals with a higher education qualification across many developed countries. Despite recent increases in the number of individuals participating in higher education, the UK remains behind many competitor countries in the percentage of high skilled individuals in its population.

Even with current rates of participation in the UK, this trend is likely to continue into the future with competitor countries increasing high level skills (the skills associated with higher education) amongst their younger populations. Competitor countries are also investing heavily in raising the skill levels of their general populations, with China projected to produce more graduates than the United States and Europe combined by 2020.


54.0%Russian Federation

38.8%Korea

36.0%Estonia

23.5%Greece

15.8%Slovak Republic

15.5%Czech Republic

4.6%China

49.5%Canada

37.3%Finland

35.9%Ireland

29.7%Spain

23.3%Slovenia

14.9%Saudi Arabia

44.9%Israel

36.9%Australia

35.0%Switzerland

28.9%France

21.2%Poland

14.7%Portugal

43.8%Japan

36.9%United Kingdom34.3%

Denmark

26.4%Germany

19.9%Hungary

14.5%Italy

13.7%Argentina

41.2%United States

36.7%Norway

24.4%Chile

19.0%Austria

12.7%Turkey

40.1%New Zealand

33.4%Belgium

33.0%Sweden

32.8%Netherlands

15.9%Mexico

10.9%Brazil

FIG 1.9

Projected number of graduates per year

FIG 1.8

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

ChinaProportion of 55-64 year olds with a higher education qualification

Proportion of 25-34 year olds with a higher education qualification

United States

EU

2020

2020

2020

2015

2015

2015

2010

2010

2010

10.5

3.8

3.4

6.8

3.2

3.1

3.8

2.6

2.9

Millions

Millions

Millions

40.8%United States

40.7%Canada

33.7%New Zealand

44.8%Australia

44.9%United Kingdom

46.7%New Zealand

46.8%Norway

55.7%Japan

56.1%Canada

63.1%Korea

43.2%France

42.3%Sweden

41.1%United States

39.4%Finland

29.3%Australia

29.0%Finland

28.7%United Kingdom

27.4%Japan

27.2%Norway

26.9%Sweden

18.0%France

13.2%Korea

IN FOCUS

FIG 1.11

Share of UK job losses in the recession by occupation, June 2008 to March 2010


Future need for high level skillsThe three occupational groups where graduates make up 50 per cent or more of workers are projected to account for nearly 80 per cent of new jobs to be created in the UK economy by 2017.


FIG 1.10

High skill levels and local area, 2010

Ranking by proportion of population with a higher education qualification by area

Very

hig

h

Hig

h

Med

ium

Low

Very

low

86%Manual, administration and unskilled

12%Care and sales

2%Knowledge associated

High level skills in the UK economy Although the UK has recently seen increases in participation in higher education, the distribution of high level skills within the country remains uneven.

This is significant as those occupations where high level skills are more prominent, such as those associated with knowledge-based industries, are projected to account for the

majority of jobs growth in the UK economy over the next decade, with new jobs in low skilled occupations expected to decrease over the same period. Occupations requiring high level skills were also more resilient in terms of job losses in the recent recession compared to low skilled occupations.

IN FOCUS

FIG 1.12

Percentage of graduates within occupations, 2010

Administrative and secretarial

24%

Managers and senior officials

46%

Skilled trades occupations

10%

Professional occupations

81%

Sales and customer service

12%

Associate professional and technical

54%

Machine and transport operatives

5%

Personal service

20%

Elementary occupations

7%

FIG 1.13

Future demand for skills to 2017

FIG 1.14

Projection of new jobs to be created in the UK between 2007 and 2017

Occupations with a growing share of the UK workforce

Occupations with a declining share of the UK workforce

Proportion of the UK workforce in 2007 (%) and projected change of proportion to 2017 (percentage points)

+1.1pp Associate professional and technical 14%

+1.2pp Professional occupations 13%

+1.7pp Managers and senior officials 16%

12% Administrative and secretarial -1.9pp

11% Skilled trades occupations -1.3pp

11% Elementary occupations -0.7pp

7% Machine and transport operatives -0.8pp

8% Sales and customer service -0.1pp

+0.9pp Personal service 8%

Managers and senior officials

+872,000Associate professional and technical

+654,000Professional occupations

+643,000Personal service

+443,000Sales and customer service

+104,000

18.1%Graduatestart-ups

-2.7%UKbusinesses


-0.4%UKbusinesses



FIG 2.3

Innovative enterprises driving job creation in the UK economy, 2002-2005

6%Innovative high-growth companies

54%Innovative high-growth companies

FIG 2.1

Performance of UK businesses and graduate start-ups during the recession (year on year change in number)

FIG 2.2

Restructuring of the UK economy towards knowledge-based activities (Gross value added (GVA), 1970-2007)

94%Non-innovative companies

46%Non-innovative companies

Proportion of companies

Share of jobs created over the period

34%Manufacturing

28%Other services

24%Knowledge-based services

48%Knowledge-based services

28%Other services

12%Manufacturing

1.7%UKbusinesses

3.0%UKbusinesses


Innovation and skillsAlthough innovative companies accounted for only six per cent of UK businesses between 2000 and 2005, they produced 54 per cent of jobs growth over the period.

Innovative countries tend to have higher proportions of graduates, with graduates accounting for, on average, 37 per cent of the general population in high innovation countries, 31 per cent in medium innovation countries and 26 per cent in low innovation countries.

Section 2. Innovation

The link between innovation and economic growthInnovation plays a critical role in producing growth in the UK economy, demonstrated by the disproportionate level of job generation in innovative companies and the resilience of innovative, graduate-led organisations during the recession when compared to UK businesses as a whole.

Countries with high levels of innovation also tend to have, on average, higher proportions of graduates in their populations and a stronger track record of investment in higher education.

2007 2008 2009 2010

1970 2007

0.62

0.83

0.49

0.61

0.75

0.49

0.59

0.74

0.47

0.58

0.70

0.46

0.57

0.67

0.44

0.54

0.64

0.42

Expenditure on higher education as a % of GDP



Innovation index 2010



Proportion of 25-64 year olds which are graduates



36.9%United Kingdom

35.0%Switzerland

23.3%Slovenia

33.4%Belgium

33.0%Sweden

32.8%Iceland

19.0%Austria

34.3%Denmark

36.0%Estonia

32.8%Netherlands

37.3%Finland

36.7%Norway

35.9%Ireland

41.2%United States

14.7%Portugal

28.9%France

43.8%Japan

14.5%Italy

1.2%

1.2%

1.1%

1.4%

1.6%

1.3%

1.3%

1.7%

1.3%

1.5%

1.7%

1.7%

1.4%

2.7%

1.3%

1.4%

1.5%

1.0%

IN FOCUS

FIG 2.4

Innovation and higher education, 2010

High innovation

Medium innovation

Low innovation

Graduates

Non graduates

68%TerrestrialTV

72%Cable and satellite TV

72%Independent TV production

71%Broadcast radio

70%Radio post production

92%Animation

80%Content forcomputer games

88%Interactivemedia

88%Other interactivemedia

77%Corporateproduction

63%Other content creation

74%Archives and libraries

65%Cultural heritage

65%Design

78%Literature

79%Visual arts

37%Total UKeconomy



Where will growth come from?The majority of future growth, and the rebalancing of the UK economy, will rely on knowledge-based industries, which are dependent on high level skills.

The creative industries are fast growing, innovative and knowledge based. They form an important part of the Government’s plan for growth and attract inward investment and export earnings for the UK economy.

High level skills play an important role in the creative sector, with graduates accounting for a majority of the workforce in most creative industries.

Skills in the creative sectorThe creative sector is dependent on graduate skills, with the proportion of graduates within creative industries often twice as high as that seen in the UK labour market as a whole.

FIG 2.5

High level skills in the UK creative sector, 2010

IN FOCUS

FIG 2.7

Employment in UK creative industries, 2010

FIG 2.6

Contribution of creative industries to the UK economy (average annual growth in GVA, 1997-2007)

753,000Software and electronic publishing

128,400Architecture

225,400Design

299,200Advertising

236,600Publishing

111,400Crafts

132,300TV and radio

305,800Music and the visual and performing arts

9,700Designer fashion

29,189,000All employment

2,278,500Total creativeemployment

9,800Art and antiques

6,200Digital and entertainment media

60,500Film, video and photography

GVA of UK 4%

Software, computer games and electronic publishing

12%

TV and radio 8%

Publishing 5%

Music and the visual and performing arts

4%

Architecture 6%

Advertising 8%

Designer fashion 6%

Art and antiques 8%

Video, film and photography 5%

1960Development of first patient-controlled pacemaker

1954Invention of fibre optics

1953Discovery of DNA

1960sCreation of road signage system

1963Introduction of world’s first computerised train schedule

1968First oral contraceptive made entirely of synthetic hormones

1961First complete hip replacement

1970sDiscovery of embryonic stem cells

1972Invention of twisted nematic LCD as used today in computer screens

1985Development of reliable way to detect differences in the DNA of individuals – genetic fingerprinting

1978First test-tube baby created by IVF

1993Needle-free powder injection

1998Earliest prototype of ‘Microcab’, an environmentally friendly car

1999Research bringing new awareness, new laws and new programmes for the liberation and rehabilitation of slaves around the world

1997World’s first animal cloned from a cell taken from an adult animal

1976Publication of first successful MRI scan of living human body part

2001First standard historical Welsh dictionary completed

2006Development of electronic notebook for police officers



From research to innovationResearch conducted at UK universities has had an impact on all of our lives, as demonstrated by the wide range of innovations resulting from research conducted over the last 60 years.

These and future innovations, based on research being undertaken at UK universities, will play an important part in contributing to economic recovery and improving the health and wellbeing of the UK population.

Universities and innovationOver the last 60 years UK university research has contributed towards many breakthroughs and innovations, from the discovery of DNA and the creation of the UK road signage system to the world’s first cloned animal and the development of genetic fingerprinting.

FIG 2.8

Innovation from UK university research, 1953-2006

Remote monitoring of the body

The invisibility cloak Seaweed as a substitute for salt

Improving detection and treatment of Alzheimer’s

Modelling natural disasters

Feasibility of building self-sustainable underwater or floating human settlements

Understanding chronic pain and identifying new painkillers

Growing replacement human organs

The use of algae as a fuel source

IN FOCUS

FIG 2.9

Innovation for the future based on UK university research

q q q q

q q q qq

FIG 3.1

Mature students (UK-domiciled only) at UK higher education institutions, 2009/10

21-24

25-29

30-34

35-39

40-44

45+

570,635 391,875315,810 57,235

Postgraduate taught

Postgraduate research

Other undergraduate

First degree

Total


Section 3. Connections

Lifelong learning for allIn addition to producing graduates and undertaking research, universities also play an important role in upskilling and reskilling the workforce through providing training and education to those already in work. In fact mature students, at 64 per cent, account for the majority of all home students at UK universities. They also account for the vast majority of students studying part time, where 94 per cent are mature.

Throughout their working life and beyond, individuals can access education and training through a variety of means, both full-time

and part-time, from a range of continuing professional development programmes while at work to more formal postgraduate training in a wide variety of subjects.

Through the training of teachers, doctors and nurses, universities also play a significant role in supporting the public service infrastructure of the UK.

Mature students in higher educationIn 2009/10 there were 1.3 million UK-domiciled mature students studying at UK higher education institutions. These students undertook a wide range of courses covering many subjects and levels of training.

21-24

25-29

30-34

35-39

40-44

45+

FIG 3.2

Age group as proportion of all full-time and part-time enrolments in UK higher education institutions, 2009/10

Full-time Part-time

31% 13%

10% 17%

4% 15%

3% 14%

2% 13%

2% 24%

FIG 3.5

Students (UK-domiciled only) starting professional training at UK higher education institutions, 2009/10

Primary school teachers

20,800Secondary school teachers

19,400Nurses

93,400Doctors

12,800Dentists

1,900

Teacher training

Business

Health related

Social sciences

Biology and psychology

Law

Creative arts and design

Architecture

Mathematical sciences

History and philosophy

Languages

Mass communications

Physical sciences

Veterinary and agricultural sciences

FIG 3.3

Postgraduate taught students (UK-domiciled only) at UK higher education institutions, 2009/10

100,00090,00080,00070,00060,00050,00040,00030,00020,00010,000

Engineering and technology

IN FOCUS

FIG 3.4

Number of UK higher education institutions offering work-based courses, 2009/10

165In 2009/10 3,666,559 learner days of continuing professional development delivered by 165 higher education institutions

119 Continuous work-based learning

128 Courses for the public outside campus

130 Distance learning for businesses

138 Short bespoke courses at companies’ premises

148 Short bespoke courses for business on campus



Universities and business in partnershipUniversities also play an important role in providing support to businesses through research and training. This is demonstrated by the breadth and range of industries with links to universities and the variety of activities with which they are involved, including extensive support for small and medium enterprises (SMEs). This activity is widespread across the UK.

Businesses and universitiesAround three quarters of SMEs in the UK engage with universities in some way. Universities interact with a wide range of industries, from manufacturing and creative industries to transport and education.

91Access to education

64Supporting SMEs

61Research collaboration with industry

51Meeting regional skills needs

44Technology transfer

43Meeting national skills needs

34Developing local partnerships

26Graduate retention in local region

26Attracting non-local students to the region

21Support for community developmentMining and quarrying

Real estate activities

Agriculture, forestry and fishing

Accommodation and food services

Electricity and gas

Water supply, sewerage and waste management

Transport and storage

Administrative and support services

Construction

Financial and insurance activities

Creative industries

Manufacturing

Public administration and defence

Professional, scientific and technical industries

Information and communication

Arts, entertainment and recreation

Human health and social work

Education

FIG 3.6

Types of industries with which UK higher education institutions engage, 2009/10

FIG 3.7

Ways in which UK higher education institutions contribute to regional economic development (number of institutions), 2009/10

IN FOCUS

FIG 3.8

Proportion of SMEs engaging with higher education institutions by region, 2009/10

80%Northern Ireland

84%Scotland

80%North East

74%UK total

72%Yorkshire and

the Humber

76%East Midlands

79%East of England

72%London

70%South East

73%North West

86%Wales

70%West Midlands

78%South West

FIG 3.9

Number of graduate start-up companies, 2009/10

FIG 3.10

Number of consultancy contracts with SMEs, 2009/10

31+

16-30

11-15

6-10

1-5

0

0

UK higher education institutions

UK higher education institutions

62

62

201+

101-200

51-100

26-50

1-25

FIG 3.11

Market share of internationally mobile students (%), 2009

FIG 3.12

Growth in the number of internationally mobile students

7.0m2020

3.7m2009

3.0m2005

2.1m2000

1.7m1995

1.3m1990

1.1m1985

1.0m1980

0.8m1975

United States

United Kingdom

Australia

Germany

France

Canada

Russian Federation

Japan

Spain

New Zealand

Italy

China

South Africa

Austria

Korea

Switzerland

Belgium

Netherlands

Sweden

Other OECD

Other G20 and non-OECD

18.0

9.9

7.0

7.0

6.8

5.2

3.7

3.6

2.3

1.9

1.8

1.7

1.7

1.6

1.4

1.3

1.3

1.2

1.1

6.0

15.7



UK higher education in a global marketThe UK is a world leader in the recruitment of international students from a wide range of countries, and the number of internationally mobile students is expected to grow significantly in the future. The UK’s market position is in danger, however, as other countries focus more heavily on international recruitment.

Global competition for international studentsDespite retaining its position as the second most popular destination for international students after the United States, the UK saw its market share reduce from 10.8 per cent in 2000 to 9.9 per cent in 2009, as many competitor countries such as Australia, Canada, New Zealand and Korea were actively increasing theirs.

Australia up 1.9pp

New Zealand up 1.5pp

Spain up 1.1pp

Canada up 0.6pp

Italy up 0.6pp

Japan up 0.4pp

France up 0.2pp

Germany down 2pp

United Kingdom down 0.9pp

China down 0.1pp-+

21.5%Australia

192

169

147

141

117

175

131

15.3%United Kingdom

15.1%Austria

14.9%Switzerland

200

188

140

73

206

107

128

158

184

190

155

173

132

118

169

164

156

140

154

150

14.6%New Zealand

7.3%Czech Republic

5.4%Denmark

3.7%Hungary

2.7%Spain

1.6%Korea

11.5%France

7.1%Ireland

4.6%Iceland

3.5%United States

2.7%Slovak Republic

0.8%Poland

10.5%Germany

6.5%Canada

3.8%Netherlands

3.3%Italy

2.4%Portugal

0.7%Turkey

9.2%Belgium

6.4%Sweden

3.7%Finland

3.1%Japan

2.3%Norway

United States down 5pp

IN FOCUS

FIG 3.13

International students as a proportion of all students (%) and number of countries represented in higher education sector, 2009

FIG 3.14

Change in market share of internationally mobile students, 2000-2009

Tutition fees from overseas students

Off campus expenditure by overseas students

Trans-national education – students studying UK provision overseas

Research grants and contracts

Licensing intellectual property

Consulting, facilities and equipment

Donations

Other income



Contributing to an export-led recoveryHigher education is also important to the UK as an export industry, contributing £7.9 billion in 2009 and projected to contribute £16.9 billion by 2025.

FIG 3.15

Export earnings for the UK economy, 2008/09 prices

UK higher education as an export industryThe UK is a global leader in the export of higher education and particularly in the growing and competitive market of internationally mobile students. The global activities of UK universities in teaching and research will continue to bring economic and social benefits to the UK.

This is an area where the UK is looking to build on its success, with an increasing focus on trans-national education.

£16,895m2025

£13,222m2020

£10,413m2015

£8,245m2010£7,874m

2009

IN FOCUS

Further information on the Higher education in focus series, together with the detailed data and a full list of sources used in this publication, can be found at: http://www.universitiesuk.ac.uk/PolicyAndResearch/PolicyAreas/Data-Analysis/Pages/HE-in-Focus.aspx

This publication has been produced by Universities UK, the representative organisation for the UK’s universities. Founded in 1918, its mission is to be the definitive voice for all universities in the UK, providing high quality leadership and support to its members to promote a successful and diverse higher education sector. With 133 members and offices in London, Cardiff and Edinburgh, it promotes the strength and success of UK universities nationally and internationally.

Woburn House 20 Tavistock Square London WC1H 9HQ

Tel: +44 (0)20 7419 4111 Fax: +44 (0)20 7388 8649

Email: [email protected]: www.universitiesuk.ac.uk

ISBN: 978-1-84036-264-0

© Universities UK

December 2011

To download this publication, or for the full list of Universities UK publications, visit www.universitiesuk.ac.uk

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Higher education in focusOutputs in Universities UK’s Higher education in focus series provide an overview of the shape and impact of the UK’s higher education sector, using simple and innovative visualisations of data.

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