By Stuart Patrick, Chief Executive of Glasgow Chamber of Commerce
The Herald’s recent series on Scotland’s universities delved deeply into the crucial role international students now play in sustaining the financial model of higher education. Despite the importance of the role universities play in Scotland’s economic development, I wonder if we truly grasp the full extent of their impact – both as engines of growth and as catalysts for future prosperity.
We can certainly argue whether each year’s decision not to increase the amount being paid by the Scottish Government to cover a Scottish student’s degree is justifiable. We can debate how healthy it is that universities increasingly rely on international students to balance their books. But are we grasping how much of our economic success now and in the future relies on the strength of our universities?
The OECD’s Education at a Glance report consistently evaluates the benefits of obtaining a higher education qualification and while outcomes differ across countries, the general principle holds: higher levels of educational attainment lead to higher earnings. On average, it still makes financial sense for students to invest the time and expense in pursuing a university degree.
What is less discussed is the importance of our universities for regional economies. A 2023 report commissioned by Universities UK and compiled by London Economics attempted to quantify the impact of UK higher education on the UK economy. That impact emerges in several ways. The supply of skills, world class research, the exporting of its services to international students and the money higher education institutions spend in their local economies; these are all the elements of the impact.
London Economics could only make an impact estimate for the last two of those – the universities’ own expenditure and the spending of international students. They concluded that higher education providers generated £130bn of economic output, £15bn of which came from the spending of international students. Of the nations and regions, Scotland came behind only London and the Southeast in terms of the jobs supported by higher education activity.
This comes as no surprise when I think of the day-to-day experience of Glasgow Chamber of Commerce in campaigning for investment in our own region’s economy. Here are a few examples.
The 20-year success in building Glasgow’s International Financial Services District was critically dependent on the supply of local skills. Barclays, JP Morgan, Morgan Stanley and many others would not invest in thousands of highly paid posts without the annual output of graduates from our universities.
The growth of new industries including photonics, space communications, advanced manufacturing, precision medicine and fintech would simply not be happening without the research work led by our universities. Glasgow City Region is bursting with centres of excellence supported by our universities. The National Manufacturing Institute for Scotland, the Offshore Renewables Catapult, the Fraunhofer Centre for Applied Photonics, the Imaging Centre of Excellence at the Queen Elizabeth University Hospital – both the Scottish and UK Governments are investing in centres like these to help embed emerging technologies in Glasgow’s regional economy.
Our universities have led the design and development of three innovation districts, encouraging business to locate alongside these centres and invest in technologies that could help create clusters of fast-growing companies. The University of Strathclyde and Scottish Enterprise created the heart of the Glasgow City Innovation District with the Technology Innovation Centre on George Street as the flagship, working with companies like Weir Group and Scottish Power.
The University of Glasgow is expanding its Gilmorehill Campus including the Advanced Research Centre and the new Adam Smith Business School – which has a particularly strong track record in attracting international students – and is now working on a Health Innovation Hub in Govan close to the hospital. These are all features of the Glasgow Riverside Innovation District.
Next to Glasgow Airport, a striking purple roofed building next to the runway, houses the National Manufacturing Institute which contains the Advanced Forming Research Centre in metallurgy and the Lightweight Manufacturing Centre, among others. Alongside a further centre focused on medicines manufacturing and led by the University of Strathclyde, the Advanced Manufacturing Innovation District, has the potential to become a base for thousands of new technology rich jobs.
In the past two years, the expansion of these innovation districts has positioned Glasgow as a key contender for government investment in research and development, under policies aimed at spreading the economic benefits of such funding beyond London and the Southeast. The designation of Glasgow as one of three Innovation Accelerator Partnerships brought £33m into 11 research projects and most recently Rishi Sunak’s government committed £160m behind Glasgow’s selection for an Investment Zone. It should be a priority of Sir Keir Starmer’s government to confirm and expand those investments.
We are lucky to have a complete mix of six universities. Glasgow Caledonian University and the University of the West of Scotland play essential roles in feeding new and practical skills into industry and are especially strong in reaching the most disadvantaged communities in our region to recruit their students. Glasgow School of Art and the Royal Conservatoire of Scotland are genuinely world beating in their fields, shaping the distinctive international success of the creative industries of the UK, Scotland and Glasgow.
The impact our universities have on Glasgow’s global standing is harder to quantify but no less significant. Thousands of international students graduate and take their skills all around the world.
Last year, during a vibrant dinner in Jakarta with Indonesian alumni from Strathclyde and Glasgow Universities – part of Glasgow Chamber’s overseas trade work – it was clear how many had secured influential roles with Indonesia’s largest companies and government departments. Their fondness for Glasgow was undeniable and every one offered to help make contacts for the city and for our business community. The global alumni networks are perhaps the most intangible yet powerful contributions our universities are making to our future economic success. This should be front of mind when we debate how much we should invest to ensure our universities remain world-class.
First published in The Herald on Wednesday 16 October.