Future Ready: the Path to Growth
Leveraging research-intensive universities' global reach
Universities derive enormous advantages for the UK from collaboration across borders, attracting talent and FDI and fostering the types of economic activity that international investors value most.
Higher education is also a major export activity in its own right: the DfE estimates that higher education generates nearly £22bn through education-related exports annually.
"The UK’s globally excellent universities can be a magnet for foreign direct investment and private equity. It’s vital government empowers universities to operate in this space to unlock what is currently untapped potential."
Jen Tippin, Group Chief Operating Officer, NatWest
Supporting universities to draw in foreign investment and trade
Universities already play an important role in attracting foreign investment to the UK, receiving just over £1.5bn in non-UK income for research grants and contracts in 2022/23 alone. They are part of the high-skill high-productivity ecosystem that is crucial to driving UK growth.
Investors particularly value the types of innovative, R&D-heavy sectors where universities play a particularly large role. When asked in the EY Attractiveness Survey, investors’ top three recommendations for the UK to maintain its competitive position were:
- supporting high-tech industries and innovation (such as cleantech and healthcare)
- supporting SMEs (of which university spinouts and start-ups are often among the most innovative)
- increased R&D funding
Having access to a skilled workforce is a key factor for investors: 36% of overseas investors into R&D projects in the 2017-21 fDi Markets database said a skilled workforce was a primary motivator.
Developing a more joined-up strategy and a stable international framework
In recent years, ever-changing policy and rhetoric about international students, visas, exports and security, and uncertainty over UK membership of international research programmes such as Horizon Europe, has held back universities from realising their full potential for the UK.
The current review of the International Education Strategy provides an opportunity to consider how the UK might better maximise impact from the full range of universities’ global activities. Members of our Expert Panel suggested a coordinated, and joined-up, ‘global’ strategy is needed.
This should encompass research and innovation partnerships and opportunities for philanthropic and business investment, as well as international students and transnational education arrangements.
In the meantime, we welcome government’s positive messaging in support of international students. However, changes to immigration rules introduced by the previous government, alongside other global factors, have driven international student numbers down significantly. In addition, increasing UK visa costs for international talent may also discourage skilled researchers, and the necessary talent to create and scale startups,
from coming to the UK.
It is vital that the government continues to offer a welcoming environment for international students and staff with stable, affordable and internationally competitive visa routes. The current Graduate Route offer is vital to the UK’s position as a destination of choice for international students and must be retained as a priority.
Strengthening partnerships in Europe and beyond
Access to EU research and innovation programmes brings huge advantages for the UK. They boost jobs and opportunity across the country, build UK research capacity and capabilities and keep us at the forefront of key technological advances such as AI and clean energy.
Horizon Europe is the world’s largest collaborative R&D programme, covering a full range of technology readiness levels – from fundamental research, through proof-of-concept, to much more applied activity.
An early declaration of intent to associate to Framework Programme 10 will help secure and enhance relationships with EU partners. Full participation, with as few areas excluded as possible, would also complement UK-EU efforts to coordinate across military, economic, climate, health,
cyber, and energy security.
There are also opportunities to strengthen research and innovation collaborations with like-minded countries elsewhere in the world.
Solutions
What can research-intensive universities offer?
- Develop partnerships with multinational businesses and other international partners to attract economic activity to the UK.
- Continue working with government, businesses and partners across Europe to drive up participation in EU programmes.
- Support government in the development and delivery of a global strategy for universities
What can the government do?
- Maximise universities’ role in helping attract FDI and integrate this into the Industrial Strategy.
- Integrate research-intensive universities’ role in attracting overseas investment into a wider global strategy for universities.
- Offer stable, affordable and internationally competitive visa routes for the international talent crucial to delivering UK economic growth.
- Retain fiscal headroom to associate to FP10 from 2028.