The impact of universities on the UK & East Midlands economies

A big impact indeed

EconomicImpactOfHigherEducationInstitutionsLrg

This Universities UK report from earlier in the year on the impact of universities on the UK economy really is a very interesting piece of work which covers the sector’s increasing impact in terms of output, contribution to GDP, job creation, and overseas investment. It also looks at the knock-on effects of expenditure by universities, their staff, and international students. The report finds that in 2011–12, the UK higher education sector:

• generated over £73 billion of output – up 24% from £59 billion in 2009

• contributed 2.8% of UK GDP in 2011 – up from 2.3% in 2007

• generated 2.7% of all UK employment and 757,268 full-time-equivalent jobs

• generated £10.7 billion of export earnings for the UK

• received less than half its income from public sources

The report also compares HE’s contribution to GDP to that of other sectors:

Higher education’s contribution to GDP (O) is clearly significant. Further analysis was undertaken to assess the impact of universities on GDP compared with a number of other UK sectors. As Figure 11 shows, the higher education institutional contribution to GDP (O) in 2011–12 was comparable to that made by legal activities, greater than that of office administration and less than telecommunications. The industry figures were sourced from the ONS Use Tables for 2010 and hence should not be regarded as a direct like-with-like comparison as the higher education figures are for the year 2011–12. However, Figure 11 is broadly indicative and is helpful in illustrating the relative position of universities in terms of their contribution to GDP. This is an industry-to-industry comparison (ie the secondary GDP generated by the universities or their students is not included).

 

HE v other sectors

It’s a really impressive piece of work and reinforces the critical place of higher education in the UK economy. The report is also accompanied by a set of more detailed reports which examine the impact of universities on the economies of the English regions.

Looking specifically at the East Midlands there is an important section reminding us of the huge impact of international students on the local economy:

The current strength of East Midlands higher education institutions in attracting students from further afield to study in the region also means that they are attracting additional money into the region and boosting export earnings.

• In 2011–12 the region’s universities attracted over 25,945 students from outside the UK. The fees paid by international students to the universities are captured in the university accounts and their impact is included in analysis of the overall institutional impact at sectoral level. (Non-EU students alone paid the universities £221 million in fee income in 2011–12.) Payments to the universities for halls of residence accommodation, or money spent in university cafeterias, bars etc are likewise captured in the institutional impact. However, in addition to any fees or other monies they pay to the university, international students spend money off-campus. This can be on private sector rental, food, entertainment, consumer goods, travel etc. In 2011–12 this off-campus expenditure of international students was estimated as £293 million.
• The off-campus expenditure of international students generated £440 million of output (of which £358 million was in the region) and over 3,719 full-time jobs throughout the UK (of which 2,975 were in the East Midlands). International student expenditure generated £204 million of GVA in the UK. (£147 million regional GVA.)

The summary of the economic output of universities in the East Midlands includes some pretty big numbers:

East Midlands Impact

East Midlands Impact

All very helpful and interesting.

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GPA v Degree Class: a “Goldilocks” solution?

As UK looks at GPA, US considers degree class

There has been a debate in UK Higher Education for the past few years about the merits of moving away from traditional degree classifications to a US style Grade Point Average (GPA). A recent piece in the Guardian notes the arguments for moving to GPA in the UK:

Employers say that it is very difficult to differentiate between students. The 2:1 degree classification, for example, fails to distinguish between someone who attained 60%, and another who achieved 69.9%. In a competitive jobs market, employers want more information about the candidates they are considering for jobs. This means knowing whether candidates came at the low or high end of a classification. Moving to a grade point average would give that extra detail, showing students’ average grade to two decimal points as they proceed through their degree.

There are many other positive arguments too and a group of universities is currently involved in trialling the approach alongside current models.
grads
It is more than a little surprising therefore to see an argument about moving the other way.  A piece in The Atlantic by Heidi Tworek is quoted by EAB and looks at the merits of moving from GPA to UK-style degree classification in order to address grade inflation. The so-called “Goldilocks” solution:

Other schools have gone to the opposite extreme. Bennington College and Reed College, along with eight others, have abolished grades altogether. Tworek argues that the best solution is somewhere between the existing models—a “Goldilocks” solution that bridges the extremes. And she thinks it might be found already at universities in England. In the United Kingdom, students receive one of only three marks: first, second, or third. Second is by far the most common grade; 76% of students graduate with a second-designated degree. Only the truly exceptional students—about 19%—receive a first-class degree. The system carries several benefits, argues Tworek. Employers do not look down on second-marked degrees, generally accepting it as a mark of quality. Furthermore, the simpler system “removes the narcissism inherent in minor differences,” she writes. Finally, the system still distinguishes degrees just enough to give students, teachers, and employers a sense of the student’s performance.

Similar arguments are therefore deployed in both cases with proponents suggesting that employers will like the results better, grade inflation will be challenged and differentiation between students enhanced. So, GPA or degree classification, which way will it go?

Universities learning from cities

More alike than you think?

The Chronicle of Higher Education has a diverting piece on what cities can teach Higher Education. Essentially the argument is that there are many similarities and that a long term view is necessary to deliver success:

Cities and colleges are more alike than people think. Both are considered economic engines that also offer rites of passage and an escape from parochialism. Both host sports teams and their own police forces. Recently the overwhelming debts run up by cities and by students have forced themselves on the public’s attention. Yet despite the significant woes of Detroit and the impending bankruptcies of other American cities, no one is expecting urban living to disappear or be radically transformed. Higher education, however, is not so lucky. Some doomsayers predict the rise of a completely online educational system, spurred by the spread of massive open online courses.

 

Universities really don't want to be like Detroit

Universities really don’t want to be like Detroit

But perhaps one of the most interesting elements is made in relation to the student facilities “arms race”. The piece quotes a recent report which found that there are nearly 160 leisure-and-recreation projects under way on US campuses, representing an investment of some $1.7-billion:

Should we blame students for the party atmosphere on many campuses? That might be tempting, but it ignores the “Club Ed” ambitions of some presidents. Dorms, in many cases, have become full-scale resorts. What is a student to think when seeing, for instance, Texas Tech University’s leisure pool and “lazy river”?

See this recent post on this topic for more on campus facilities. But the real issue here is about looking at the big picture and not being distracted by short term issues:

Cities have also invested in projects that were meant to attract people yet do nothing to encourage the social drama that is the real attraction of cities. We must remember, however, that successful cities are not always the most efficient—that is, efficient in a hasty way. New York has, along with London, some of the most expensive real estate in the world tied up in parkland. Should Central Park be sold off to pay the city’s debts? No, there is more to a city than balancing a budget and more to balancing a budget than balancing it in one year. Whatever gains might be achieved by the quick sale of parkland would be offset by the long-term erosion in quality of life.

Just so with higher education. Philosophy and art may have no direct relation to a job qualification, but an education without them is as soulless and inhumane as the housing projects that were inflicted on generations of the poor.

Much to learn then perhaps.

Mobility Really Matters

The Imperfect University: Staff getting on their bikes

(an updated version of a post from a while back)

One of the things professional services colleagues sometimes complain about is that whereas  academic staff can be promoted in post – and indeed can progress all the way from lecturer to professor in the same academic department – they can’t. Instead to advance their careers administrators have to move – either elsewhere in the institution or to another university. This is often presented as a problem whereas I have to say I think it is much more of a positive position. Whilst there is something to be said for having people in post in administrative roles in central or academic departments who know their jobs inside out, who carry a sense of the institutional history and provide the continuity between rotating professors as heads of department, there is also a difficulty in such longevity in one particular role. Essentially the challenge is this – many intelligent, creative and able administrators, no matter how committed to a particular department or institution, can, unless they are given new challenges and fresh stimulus in their job, sometimes become dull, stale and bored. They may, no matter how able, become less productive over time as tedium and routine replaces challenge and excitement. I should stress that this is not always the case and is challenged as a proposition by some of my colleagues.

In my view the way to address this issue is not to argue for the opportunity for professional services staff to be promoted in role (although if their job does change radically then the regarding opportunity will exist) – this is the wrong way of approaching the matter. Rather there should be the possibility of moving staff regularly to new roles in different parts of the university to provide them with new challenge and stimulus. Ultimately this not only gives people more satisfaction in their work and makes them more productive but, because it broadens their experience too they become more employable in other roles and stand a better chance of securing a more senior role in their current or another institution.

Times Higher Education carried a piece a while ago on the development of university leaders and noted the success of the University of Warwick in this regard. One of those things for which the administration at Warwick under Mike Shattock and subsequently was famed was the propensity for moving staff around to ensure they gained new experiences and enjoyed exposure to new ideas and new work opportunities to keep them interested, stimulated and challenged. This was my experience at the University (I had seven different jobs in just under nine years at Warwick) and I found the experience hugely beneficial.

This is hard to do though. Given the structures in universities which often involve significant devolution to academic units and therefore means that administrative staff can be located in dispersed teams at Department, School or Faculty level the managed redeployment or rotation of staff can be extremely difficult to organise. Professional specialisms – in HR, Finance, IT, and Estates – make such rotation even harder although I would suggest that the previous decline of the generalist administrator has been reversed and it is perfectly possible for specialists to transfer into and succeed at more generalist roles (although rarely vice versa).

The Higher Education sector in the UK employs over 380,000 staff of whom 200,000 work in non-academic roles and professional services (HESA 2010/11 data). Whilst the career route is well defined and understood for academic staff (albeit an extremely tough profession to enter), entry to HE administration is less well defined. There is a national pay spine but grades for administrative staff vary across the sector. The entry level for graduates is generally understood but no common graduate scheme exists, unlike in the NHS which has had a well-developed national scheme for prospective NHS managers operating successfully for many years. A small number of institutions have operated local graduate trainee programmes down the years but they have not really taken off in any significant way.

In the absence of any national graduate entry programme and the challenges with managed rotation one alternative approach is to introduce a variety of work opportunities at the beginning of administrators’ careers. As well as providing a clear opportunity for entry to a career in higher education administration this was part of our motivation at the University of Nottingham for introducing our own local Graduate Trainee Programme in 2008.

An extract from the last advertisement for the programme gives a flavour of the opportunity:

This Graduate Trainee Programme offers an invaluable opportunity to prepare talented, hard-working and enthusiastic Nottingham graduates for a management role within this stimulating setting.

The programme is aimed exclusively at University of Nottingham graduates interested in developing a career in university administration. It offers an invaluable insight into this dynamic management activity whilst developing an understanding of:

  • markets
  • income streams
  • resource allocation processes
  • client bases including students, funding bodies, commercial partners and employers.

The programme offers four trainees the opportunity to experience key components of university operation and build an understanding of the institution’s strategy.

Over 12 months the trainees undertake a planned rotation of placements in different areas of the University, reporting to senior staff. Placements will be across Professional Services and Schools, and trainees may have the opportunity to work at one of the University’s international campuses in Malaysia or China.

Placement areas may include:

  • Academic Services
  • Business Engagement and Innovation Services
  • Research and Graduate Services
  • Human Resources
  • Finance and Business Services
  • Student Operations
  • Governance
  • Marketing
  • Admissions

Successful trainees will gain the transferable skills necessary to move on to positions within the University with a clear understanding of how a large university operates. Outstanding performance on the programme may facilitate a longer term opportunity at Nottingham.

This kind of programme gives trainees a wide range of experiences early, sets them up well, gives them a rounded view of university operations both from departmental and central perspectives. It also makes them extremely employable and almost all of the graduates of the Nottingham GTP have gone onto subsequent employment within the University or at other HE institutions.

Having run successfully for four years at Nottingham this model has now been adapted and developed as a national scheme, Ambitious Futures, supported by AHUA (the Association of Heads of University Administration) and now involving over 20 universities (including Nottingham) in recruiting for the 2015 intake.

The UK higher education sector really does need such a scheme and this programme is already developing a cadre of senior managers for the future who have not only undertaken a variety of roles in their home institution but have also had a range of experiences in another university too.

Excellent universities need outstanding managers who have broad experience and are able to take an institutional view where necessary. Mobility and dynamism of staff is key to achieving this and is in interest of both professional staff and their institutions. Ambitious Futures offers the prospect of achieving this in a widespread and sustainable way which can only be beneficial for universities in the UK.