A report published in May revealed that the Higher Education industry is worth £45 billion a year to the UK economy – more than the aircraft or pharmaceutical industries.

The report, entitled The Economic Impact of UK Higher Education Institutions, was published by the vice-chancellors’ organisation Universities UK. It confirms the growing economic importance of the sector which had an income of £16.9 billion a year in 2003/04 (compared with £12.8 billion in 1999/2000), gross export earnings of £3.6 billion and employed 1.2% of the total workforce.

Key findings from the study show:

• Higher Education Institutions (HEIs) are worth £45 billion to the UK Economy.
• Higher Education export earnings are worth about £3.6m.
• For every £1m of HEI output, a further £1.52 million of output is generated in other sectors. This means an additional £25.6 billion of output is generated outside the HEIs as a result of their expenditure.
• HEIs directly employ more than 330,000 people, which equates to around 280,000 full-time equivalent (FTE) jobs. This is equivalent to 1.2% of total UK employment.
• For every 100 university jobs, a further 99 are created by 'knock-on' effects. More than 276,400 jobs in other sectors of the economy are dependent on the HEIs.

Professor Drummond Bone, President of Universities UK, commented: "The growth of the HE sector now puts it among the UK economy's major industries. We have tended to focus purely on the general economic impact of HEIs on the rest of the economy. This latest report, however, provides new evidence of their impact as independent business entities, and confirms Chancellor Gordon Brown's statements about the growing value of HE to the UK economy."

Alan Johnson MP, Secretary of State for Education and Skills, said: "I welcome this report which rightly sets higher education at the heart of the wider economy. I hope more employers will increasingly see all higher education providers as highly effective partners in creating long term prosperity."

This third UK-wide study of the impact of the higher education sector on the national economy was compiled by researchers at the University of Strathclyde, and updates earlier studies published in 1997 and 2002.

Warwick has also arranged its own study of the impact it makes on the local and regional community.

The study – by independent consultants SQW Ltd of Cambridge – covered not only the economic impact, but also the social and cultural benefits that we bring to Coventry, Warwickshire and the wider region.

The headline economic figures in SQW’s final report include:

• the University generates annual expenditure flows of £284m in the West Midlands region (£181m in Coventry City/Warwick District)
• the University’s presence leads to 6,500 extra jobs in the region

Wed, Jun 14, 2006