Global research collaborations a ‘loss leader’ for universities

Higher education institutions make a loss when they invest in international partnerships, but the wider community reaps a windfall, says New Zealand report

March 11, 2018
University of Canterbury Mt John Observatory in Tekapo, New Zealand

Universities make a loss when they invest in international research collaborations, but the wider community reaps a windfall, a New Zealand report suggests. 

Modelling commissioned by representative body Universities New Zealand has concluded that every dollar spent on international research collaborations delivers a return of NZ$2.46 (£1.29) after 15 years, with the payoff snowballing to NZ$7.46 a further five years later. 

Universities share in the profits through patents and incremental improvements in research quality, rankings performance and international student flows. The report, by Deloitte Access Economics, cites research findings that papers by international teams have 8 per cent more impact than those authored within single countries. 

It says improvements in academics’ research output can boost their institutions’ reputation scores in league tables like the Times Higher Education World University Rankings, in turn magnifying flows of foreign students.

However, the return to universities is dwarfed by the public benefits as university research is “openly disseminated” and used by businesses and government. Universities receive just 10 per cent of the overall payoff, the report says. 

This implies that universities gain just 25 cents from every dollar invested after 15 years, while the wider society enjoys a windfall of NZ$2.21.

Universities New Zealand executive director Chris Whelan said the report made a case for increased government funding of international university collaborations, “given the clear returns from this sort of activity”.

“It’s generally a loss leader for universities,” he told THE. “It’s great for reputation; it helps in things like rankings. But the economic benefit isn’t to universities – it’s ultimately to the businesses that commercialise it and the taxpayers who eventually see it flowing through in increased economic activity and taxes.”

Mr Whelan said his country often received educational delegations from top 10 trading partner nations such as China, Malaysia and Thailand, whose governments bankrolled their collaborative activities to strengthen their research. “When these delegations meet with New Zealand universities, we don’t have the money to match.”

He argued for a “contestable fund” to pay for collaborative activities, but acknowledged that the prospects of securing such a fund were “hard to say”. The NZ$2.37 billion (£1.25 billion) cost of meeting the new Labour government’s promise to scrap tuition fees leaves little for other higher education investments.

“The best we can do is show the government where the opportunities might lie for making a genuine long-term difference,” Mr Whelan said. “This is part of that conversation.”

The report uses mostly overseas research to model the theoretical economic returns from international research collaborations, academic mobility, student exchange programmes and internships undertaken during overseas study stints.

It finds the biggest return comes from internships, with every dollar spent delivering a payoff of NZ$5.87 as graduates become more employable and better paid – shelling out more taxes as a result. Universities see none of this windfall, with the benefits shared equally by the graduates and broader community.

Student exchanges deliver a relatively paltry return of NZ$1.06 for extended study abroad stints, and 87 cents for short-term programmes, while international travel by academics generates returns of just 61 cents in the dollar. “While it delivers an unfavourable return, there are other non-economic benefits such as a positive impact on international rankings,” Universities New Zealand notes.

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