Investing in research and innovation is one of the ten pillars of the industrial strategy. This follows on from the 2016 Autumn Statement, which announced an additional £2 billion of government funding per year (by 2020) for research and development. This additional research funding presents fantastic opportunities for the UK to consolidate its world-leading research reputation. Universities are ready to play their part – more than three quarters of publicly-funded research in the UK is carried out by universities.
The green paper clearly shows government concerns over the UK not performing as well in innovation as research, and the risks this presents to the UK's future economic prosperity. Ensuring that collaborations between universities, businesses and the wider community generate real returns to the UK is essential to addressing this concern. This will require, at the very least, building on the success of the Higher Education Innovation Fund (HEIF) in England, which already generates a return of £7.30 to the taxpayer per £1 spent. Expanding HEIF is suggested in the green paper, and universities heartily support this proposal.
Developing skills is another key pillar of the industrial strategy, and universities share the government's vision to raise skills as a way of driving higher incomes over the long term. Universities will be looking at the proposals on higher level technical education very carefully, to ensure the delivery of STEM skills is integrated between higher education and all other routes, as well as considering how best to address the government's concerns over whether supply is meeting the demand for STEM skills.
While STEM skills are absolutely vital, so are the broader skills of critical thinking, leadership and management – all of which can be gained from a university education. Employers right across the UK – be they small, medium or large – need to be able to recruit graduates, to give them the edge to compete in a global environment. Universities UK is undertaking a review of higher level skills, which will present new proposals, and we will feed these into our response to the green paper.
A real opportunity exists for universities to extend their reach to local employers, ensuring every employer that wishes to recruit locally is able to access local graduates. Likewise, all graduates who wish to take up employment in the same area as their university should have sufficient access to the opportunities available at small, medium and large employers. This could ensure a more balanced distribution of growth across local areas in England, another of the pillars of the industrial strategy. Universities will be putting forward ideas on how we can make this happen.
The green paper points out that regional disparities are now wider in the UK than in other western European nations. It also sets out plans to work with local areas to strengthen local institutions, in order to drive local growth. Universities, as anchor institutions across many areas in the UK, are ready to step up and play a bigger role in local growth and development.
There is much potential for universities, linking with Local Enterprise Partnerships, to bring together local businesses and other key players in a concerted effort to drive growth at the local level. Universities could also collaborate with local schools and public service providers, working together so no individual is left behind. Universities will be exploring how we put this into practice in a series of consultation events with key players at the local level, to inform the government's industrial strategy.
Throughout this week our #UniversityImpact campaign is focusing on how universities matter – to the economy, to society and to individuals. The many great examples it is showcasing illustrate just how much universities have to offer to their local areas and to the country as a whole. Drawing on all this experience and expertise, we look forward to making some new and collaborative proposals to government, to help them make a success of their new industrial strategy and in so doing shape the future of the UK economy.