New data reveals the economic impact delivered by Scotland’s 19 universities and higher education institutions at £17.1 billion and highlights that Scotland’s higher education sector offers a better economic return on public investment made in research and innovation than anywhere else in the UK, except London, with a benefit-to-cost ratio of nearly 11:1.
As the Scottish Government focuses on its priority of economic growth with a purpose and attracting external investment, Scotland’s universities are a major economic asset and partner in this agenda.
In a report commissioned from London Economics by Universities UK, the economic impact of the UK university sector’s teaching, research, and innovation activities was evaluated, with a detailed disaggregation by UK nation and region. The data focuses on the 2021-22 academic year.
The research finds:
- Scotland’s higher education sector’s total teaching, research and innovation activities had an economic impact of £17.1 billion in Scotland, the third biggest of any nation and region in the UK, only after London and the Southeast.
- Focusing in on the economic impact generated from their research and innovation only, Scotland’s universities generate an impact of £8.7 billion, second highest, to London, in the UK. This accounts for 14% of the UK’s £62.84 billion of economic impact from this form of university activity, meaning that the Scottish higher education sector punches far above its weight.
- London Economics found a benefit-to-cost ratio of 10.8 to 1 when it comes to investment in university research and innovation in Scotland. This means for every pound invested into Scotland’s universities, almost £11 is returned to the economy and is the highest of any UK nation. The benefit-to-cost figure for institutions in England is 9.9.
As the Scottish government set out its responsibilities for the coming year in the Programme for Government this week, this research by London Economics is a pertinent example of the value of investing in higher education and the wider impact this can have on other elements of society.
Commenting, Professor Iain Gillespie, Universities Scotland Convener said:
“Universities are a major asset to the Scottish Government when it comes to boosting growth and productivity, and these new figures from London Economics confirm the value of the higher education system is felt throughout Scotland. With a close to an 11:1 return on every pound of public funding invested in research and innovation, Scotland’s universities are highly productive in their outputs, delivering a better economic return in this area than any nation or region in the UK, with the exception of London.”
“Scotland needs to do all it can to invest in higher education now for continued and future economic leverage. Investment in our universities is critical to industries beyond the sector alone, and this research shows the influence of higher education goes beyond our campuses.
“Given the fiscal challenges the Scottish and UK governments face, this report is a timely reminder of the key role higher education plays in the Scottish and UK economy. Universities are central to driving forward growth and unlocking future potential in the economy and it is imperative both the UK and Scottish governments recognise this accordingly.”
ENDS
NOTES:
- £17.1 billion does not represent the total economic impact of Scotland’s universities. This analysis considers the economic impact of university teaching, research and innovation. If the economic impact of education exports were also to be considered, the figure for the sector in Scotland would be £28.3 billion.
- This media release focuses primarily on the economic impact of research and innovation in Scotland’s universities, noting that the mechanisms for public investment in university research and innovation are broadly comparable across the UK, with aspects both reserved and devolved.
- All four nations have distinctively different models for funding university teaching.
Note: All estimates are presented in 2021-22 prices, rounded to the nearest £0.01 billion, and may not add up precisely to the totals indicated. Out of the total of 312 active UK HEPs in 2021-22, the analysis here is based on 288 HEPs for which the required HESA student data were available.
Source: London Economics