Universities in the UK now generate £59 billion for the UK economy putting the higher education sector ahead of the agricultural, advertising, pharmaceutical and postal industries, according to new figures published today.

This is the key finding of Universities UK's latest UK-wide study of the impact of the higher education sector on the UK economy. The report - produced for Universities UK by the University of Strathclyde - updates earlier studies published in 1997, 2002 and 2006 and confirms the growing economic importance of the sector.

The study found that, in 2007/08:

• The higher education sector spent some £19.5 billion on goods and services produced in the UK.
• Through both direct and secondary or multiplier effects this generated over £59 billion of output and over 668,500 full time equivalent jobs throughout the economy. The equivalent figure four years ago was nearly £45 billion (25% increase).
• The total revenue earned by universities amounted to £23.4 billion (compared with £16.87 billion in 2003/04).
• Gross export earnings for the higher education sector were estimated to be over £5.3 billion.
• The personal off-campus expenditure of international students and visitors amounted to £2.3 billion.

Professor Steve Smith, President of Universities UK, said: “These figures show that the higher education sector is one of the UK's most valuable industries. Our universities are unquestionably an outstanding success story for the economy.

“Universities have increased their impact by over £15 billion since 2004, generate about 2.3% of UK GDP, and employ 1% of the UK workforce. Across a range of activities, universities, through their dedicated staff, are doing more than ever to support the wider economy. With growing pressures on public spending and with the all-important debate about university funding about to start, it's crucial that we recognise the growing importance of higher education to the health of the economy.”

Professor Smith added: “We must not forget either about the non-economic benefits that universities provide. Universities open their doors to business and local communities, providing space for public debate, access to art, music, theatre and sports facilities. This social and cultural contribution to national life should not be underestimated either.”

Lord Mandelson, Secretary of State for Business, Innovation & Skills, said: “Universities are critical to this country’s economic performance contributing about £ 59 billion.  This importance will only grow over the next decade which is why we are publishing a blueprint for the future of higher education and the role it will play in securing the country’s long term prosperity.”

Ursula Kelly of the University of Strathclyde, the report’s co-author and director of the project, said: “This new report confirms the growing economic importance of higher education to the UK. The results highlight the increasing policy significance of higher education, both in terms of its contribution to GDP and its relative effectiveness in generating economic impact.”

Notes

1. The report, The impact of universities on the UK economy, was launched in Parliament on 3 November at an event hosted by Dr Vince Cable, Liberal Democrat Deputy Leader and Shadow Chancellor.  The report is available to download from the Universities UK website.
2. The study demonstrates that the university sector is very efficient at generating impact compared to other sectors of the economy. UK universities achieve this despite receiving less investment than most of our competitor countries. This success depends on a continuing mix of public and private investment in the sector. As the recent OECD figures confirm, we are consistently behind on the proportion of our national resource that we invest in HE, spending just 1.3% of GDP compared with 2.9% in the US and an OECD average of 1.5%. For more information on the OECD's figures (Education at a Glance 2009), visit:  www.oecd.org/dataoecd/40/58/43633897.pdf
3. The impact of universities on the UK economy was produced for Universities UK by Ursula Kelly, Donald McLellan and Emeritus Professor Iain McNicoll of the University of Strathclyde.