In 1900, just 1% of young people globally were enrolled at university. Over the course
of the next century, this exploded to 20% - recognition of the value of such an education.
5 key benefits of UK universities
Here are five of the key reasons why the UK government views universities as
such powerful engines of economic growth:
1. Building global political and business bridges
Political and business graduates from around the world have maintained strong
links with these institutions and the people they studied with - greatly benefiting
the UK’s society and economy.
Since 1945, Oxford University alone has provided further education to 45 future
Heads of State from 25 different countries.
2. Stimulating inward investment
The UK is one of the world’s top destinations for Foreign Direct Investment (FDI).
Universities ensure that the country has a strong talent pool available for companies
nationwide.
They are also a globally recognised source of research and are key to creating the industry
hubs and innovation hotspots sought by investors.
3. Vital part of the economy
Education is worth an estimated £17.5 billion to the UK economy, with universities
employing more than 410,000 people.
This sector contributes four times more than agriculture to the country’s gross domestic
product (Universities UK).
4. Increasing the population’s skillset
Universities generate economic growth by producing human capital or, in other words,
building a skilled workforce.
This also pays off for individuals, with UK graduates earning £9,000 more than non-graduates
each year (Department for Business, Innovation and Skills).
5. Supporting regional growth
Universities are vital to their local economies, with investment rejuvenating urban areas and
driving development.
Such institutions purchase local goods and services, provide local jobs and affect growth by
increasing the qualifications of students from the area - stimulating economic development.
Students also spend a large amount of money off-campus, which benefits local businesses.
How is the government supporting universities?
The government invests heavily in higher education, with one of the highest ranked university
systems in the world. The UK is now home to four of the world’s top 10 universities and nearly
a fifth of the top 100.
As a result, the UK’s total student population currently sits at 2.3 million – double the figure
from 1992.
It is also the second most popular destination for international students - a demographic that
is expected to grow to 6 million by 2025 (nearly double the number in 2010).
A 1% increase in the share of the workforce with a university degree can raise productivity by
between 0.2 and 0.5% (Universities UK).