There’s a lot said about the impact that universities have on their local economies. But there’s a need for more of the assumptions to be backed up by evidence. That’s why we’ve launched a short report today looking at five facts about universities and local economic development. It finds that by far the biggest impact that universities have on the local economy is through the students they attract and the people they employ.
This isn’t the only benefit that universities have for their host cities, but it is certainly much larger than other impacts. For example, local businesses tend to make up only a small proportion of the total commercial income that universities receive from businesses. And although high in value, business spin outs from universities only make up a very small proportion of the total business base in a city.
These impacts matter but are much smaller than the effect of employment by universities and the spending of their students. For example, the two universities in Coventry account for over 10% of total jobs in the city. And undergraduate students spend £267 million per year in Stoke, £350 million in Plymouth and £410 million in Cambridge.
As the debate about university fees rages on, this analysis poses questions about the impact that the new fee structure will have on city economies. The £9,000 fees that students will have to pay at Cambridge University is unlikely to dampen the clamour for places. But the impact that the £8,500 fees will have on the demand for places at the University of Teesside, where students currently spend an estimated £290 million per year, is much less clear. Other universities, such as Oxford Brookes, are taking an active decision to levy higher fees and attract fewer students in order to change the profile of the institution – decisions that will have an impact upon the local economy.
So it is important that cities understand that decisions made by universities about fees, students and staff will have implications for local economies, and they should talk to their universities to understand their plans. The fee structure that universities go for is for those institutions alone to decide. But more co-ordinated working between universities and cities on how to attract prospective students could help improve the offer of these institutions and potentially offset some of the impact that higher fees are likely to have on the local economy.
The employment of universities and the spending of their students clearly have an impact on the local economic development. More globally, this connection can be analysed at broader scale; In today’s context of economic competitiveness, the integration of “knowledge” into city‘s planning is a growing issue regarding urban development.
European cities keep on developing knowledge hotspots (under many forms such as science parks, creative districts, design quarters, etc.) notably to create knowledge-intensive jobs to attract highly skilled workers. Newcastle is one of the British examples of this urban local will to become a “city of knowledge”.
On this issue, Newcastle is cooperating with 6 other European cities to build innovative ways on how to transform districts on science quarters and improving links between city and university.
Newcastle, Vienna, Piraeus, Manresa, Halle, Aarhus and Bialystok collaborate under the REDIS project through URBACT.
URBACT(http://urbact.eu/) is a European exchange and learning programme that gather 300 cities to build a more sustainable urban development.
REDIS project (http://urbact.eu/en/projects/innovation-creativity/redis/homepage/) acts on the lack of the systematic analysis of the conditions required to develop successful science quarters, despite it raises many issues such as how to involve the (large number of) stakeholders, how to ensure connectivity with adjacent areas, how to avoid large disparities etc.
Last week REDIS published a guidebook with recommandations on how to tackle the related challenges: it displays good practices about cooperation between the university and the city in order to energize the local environment and add an innovative touch to the life of the city.
For more information please refer to:
- REDIS website : http://urbact.eu/en/projects/innovation-creativity/redis/homepage/
- REDIS results: http://urbact.eu/en/results/results/?resultid=13
- REDIS handbook “Creating knowledge hotspots in the city” : http://urbact.eu/fileadmin/Projects/REDIS/outputs_media/_lhmd_redis_brosch_web.pdf
- 2010 URBACT Annual Conference : http://urbact.eu/en/header-main/news-and-events/view-one/urbact-events/?entryId=4858
Posted by: Alex URBACT | July 01, 2011 at 02:26 PM