Universities: local anchors or national assets?

The role and importance of the UK’s universities is an issue that has been prominent in the news recently and thrown into sharper relief with Brexit and the Industrial Strategy. A particular focus is what role universities have in supporting their local economies.

The question here has an emphasis on the word local; and as a corollary, the challenges in both effecting and measuring impact at that level. Everyone can accept that universities are national assets, for both education and for research, but how strongly do they impact on the economy of the area in which they are located?

A simple answer would be that universities are both local and national, but this leads to other more specific questions such as:

  • How far away from its location does a university’s impact spread?
  • What is the split between local, national and international activities?
  • How are local, national, and international activities linked together?

These are important questions when we consider regional strategies for innovation and economic development – and the role of universities in their creation and implementation.

Universities should be part of regional innovation systems

There are obvious reasons for involving universities in regional innovation systems (eloquently summarised by the Universities Alliance) and there are many examples of university research having an impact on the local economy (for example the role of Durham University’s research in maintaining non-research employment locally with Thorn Lighting). Universities also have a number of indirect impacts, for example:

  • the economic impact of students (spending in the local economy)
  • the tourism impact of students and their connections (including international connections)
  • exposure of students to a new environment which they might return to in later life (promotion of a specific location)
  • attraction of foreign direct investment (particularly that around R&D, which is prized over assembly-type operations).

Additionally, though a university’s roots may not lie exclusively in innovation, we should acknowledge the impact of less research-intensive universities as both good civic actors and significant economic players in their locality; this is often most apparent in smaller town settings.

Against this, though, there are a number of other considerations.

Although there is plenty of evidence of universities’ economic impact, it is difficult to determine how local this is.

There are a number of reports which seek to analyse the economic impact of the UK’s universities, all showing their importance (for example: The Economic Impact of Universities in 2014-2015, The Economic Impact of Higher Education Institutions in England, and The contribution of university research to economic growth). However, these reports present national figures for economic impact and do not show either the division between national and local impact or the geographical area over which impact is significant. This is an issue for local institutions examining strategy (such as LEPs) since understanding local assets is a key part of developing place-based approaches. Therefore, simple approaches of comparing areas by the number of universities or their scores in the Research Evaluation Framework do not really assist with indicating the real value of having local higher education institutions.

Links between universities and business are often not local

Often, there is local political pressure for universities to work with local businesses – but is this realistic? If you are a business you would want access to the best research, not the nearest. Analysis of Knowledge Transfer Partnerships supports this. Only a minority of businesses are situated in the same local authority as the university partner and many show links across the country.

Universities are members of Global Innovation Networks.

In the same way that globalisation has resulted in the creation of Global Value Chains for businesses, it has enhanced the internationalisation of universities and their participation in Global Innovation Networks (GINs), which do not necessarily correspond to value chains. GINs could obviously be an asset by giving the local economy access to global research and innovation. On the other hand, such networks do not necessarily fit with local needs. For example, Durham is a member of the Matariki network of universities, as well as being an associate member of the University of Arctic. However, it is not clear how either of these networks correspond to the economic needs of North East England, rather than the academic needs of the university as a location of academic excellence.

University specialisms do not necessarily correspond with local sectoral strengths

Of course, there are specialisms that do not have economic impact. For example, Durham is the UK’s leading university in research in theology, which probably does not have a great effect on the local economy. But even for those specialisms which do, the location of centres of excellence and of companies in the same

sector can be very different. Cambridge University is acknowledged as the UK’s leading university in materials science but this does not correspond with the location of businesses in the sector (a concentration in the Midlands) or the location of the catapult centres. Though, it is possible that cluster evolution and growth may tend to mitigate this over time. While it can be supposed that university spin-outs will stay close the university from which they came, if there is not a local market they will quite probably relocate or grow branches elsewhere.


While universities clearly do have some local economic impact, their position as local assets needs to be properly thought through and their role in local place-based strategies needs to be clearly delineated. Some specific consequences could be:

  • In a globalised world there is a danger of attributing innovations which come from global connections to purely local factors. This has implications for strategy in that the key target can be strengthening connections rather than supporting purely local assets.
  • For regional science and innovation audits, it is important to look at assets created by connectivity and not merely to regard universities as local assets within the geography of the SIA. In addition, universities outside the SIA geographical area may be important assets for businesses and institutions within it.
  • Connectivity, and the use of university expertise in innovation, means that LEPs (and similar bodies in the devolved administrations) need to consider ways of cooperating with each other outside their immediate geographical areas, rather than producing similar approaches to sectoral support, merely in order to compete with each other. We see evidence in some places, particularly Greater Manchester, where local institutions effectively triage to their ostensible competitors where necessary and suitable; LEPs and others may have a role to play in enabling this sensibility more widely.

The Smart Specialisation Hub is establishing a programme of work exploring Anchor Institutions, their characteristics, approaches and embedded skillsets, both from the perspective of LEPs and universities. This work will culminate in an event bringing together key actors from across the landscape to identify common goals. We look forward to bringing you more on this topic and sharing gathered learning from what should be invaluable reflection.

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