Universities contribute 3.1 billion to economy

Universities are contributing more money to the economy from the provision of services and exchanging knowledge, with a rise of 7% from £ 3.1 billion in 2009-10 to £ 3.3billion in 2010-1, figures from the Higher Education Funding Council for England (HEFCE) show.

This increase is “particularly impressive” when seen in the context of the “wider economic turbulence” where growth is rare in most sectors, say the HEFCE.

Furthermore these findings are to be welcomed as the Government is expecting universities to have achieved a 10% increase in income from knowledge exchange by 2014-15, so they are well on course to achieve this target.

The biggest stream of income from knowledge exchange comes from contract research, which rose by 7% to just over £1 billion, a significant part of this increase coming from large businesses.

The overall spending on university services by large businesses increased by 7% which is again encouraging in the context of economy uncertainties, especially income in this area had decreased in 2009-10, although it is still below pre-recession levels.

With regards to comparisons with international universities the HEFCE show that while US universities are more effective at creating income from patents and licences, UK universities create more spin-off companies with public research money, forming one company for every £24 million of research funding compared to one company for every £56 million in the USA.

These spin-off companies, which are set up “based on the world-class research carried out by UK universities”, are important to the economy as they employ 18,000 people and have a combined turnover of £2.1billion. Therefore the picture is even more encouraging with the number of these spin-off companies increasing by 268 to 1,262.

Another interesting finding is that graduates started over 2800 new businesses using the skills gained from a university education, with the HEFCE pointing out that universities offer support for these graduates by providing advice, facilities and opportunities to network with potential investors.

David Williets, the Minister for Universities and Science has praised the “substantial contribution to the UK’s economic growth” made by universities demonstrated by these figures, especially the “important role that universities have in creating a more entrepreneurial society” shown by the number of businesses created by graduates.