Wealth-making is all about location, location, location

Study says geography trumps expertise as key to university profit-generation, Hannah Fearn writes

June 26, 2008

A university's ability to generate wealth is determined less by the expertise of its academic staff than by its location, research suggests.

Rob Huggins, who is based in the Cardiff School of Management at the University of Wales Institute, Cardiff, has calculated the productivity of each UK university by measuring how much wealth each employee creates for his or her institution.

Of the top ten universities ranked by productivity, nine are in London. Of the bottom ten, most are based in deprived areas, including Cumbria and north Wales.

Universities in less competitive regions produce less wealth. But productivity is also positively related to knowledge transfer and commercialisation capabilities.

"Geography is important in determining the productivity of a university," Dr Huggins said. "It produces a paradox. In weaker regions, they are more dependent on their university for competitiveness and innovation, but of course these universities are weaker than their competitors in the stronger regions."

The ability of universities to stimulate regional demand for knowledge is probably very limited, the research concluded.

Dr Huggins's report was unveiled at a conference on the regional impact of higher education, which was held in Cardiff last week.

The findings were supported by work carried out by Marc Cowling of the Institute for Employment Studies. His research, which was also presented at the conference, found that although cities with a university had a higher percentage of economically active graduates than cities without, the presence of a university in a city seems to have a much less profound effect on economic and social outcomes than geography.

"Persistent regional differences in the UK far outweigh the contribution of universities in improving social and economic welfare at city level," Dr Cowling's report said. "What is of great concern is that cities that start from a low base on any measure of economic performance will find it immensely difficult to improve their relative position regardless of whether they have a university or not."

But speaking at the conference, Gareth Jones, chair of the Enterprise and Learning Committee of the National Assembly for Wales, said universities should do more to build links with businesses to help boost local economies.

"Many universities have been realising that there is a symbiotic relationship between innovative and enterprising higher education institutions and successful and wealthy regional and local economies," Mr Jones told delegates.

"We have been told by the business community that the structure, governance and risk-averse culture of higher education institutions do not easily facilitate relationships with businesses. Maybe a greater acknowledgement that not all ideas emanate from academe is required," he said. "This use of the business community to help academics, which frequently involves drawing on the goodwill and expertise of alumni, is something we would wish to see developed extensively and more formally throughout higher education institution networks in Wales."

Top ten
  Value added per full-time employee (£)
1London Business School70,332
2St George’s Hospital Medical School60,352
3University of Cambridge60,125
4King’s College London57,312
5University College London54,443
6Imperial College London54,230
7Royal College of Music54,057
8City University, London51,587
9London School of Economics51,512
10Royal Veterinary College50,399
Bottom ten
  Value added per full-time employee (£)
149University of Plymouth32,036
150University of Sunderland31,723
151Cumbria Institute of the Arts30,693
152Leeds College of Music30,092
153University of Wales, Aberystwyth29,849
154Royal Agricultural College29,591
155Trinity College Carmarthen29,376
156Central School of Speech and Drama28,166
157University of Chester28,034
158Conservatoire for Dance and Drama770

hannah.fearn@tsleducation.com.

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