The economic impact of Group of Eight universities
A report from London Economics
Australia’s Group of Eight universities contributed $66.4 billion to the national economy in a single year through the flow on effects of their research, graduates, international students and employment, a new report has found.
The report from London Economics also reveals that for every $1 spent on research, around $10 came back in benefits to the private sector.
It found that for every person employed in Go8 universities, 2.4 jobs were created in the broader community and that for every three international students studying at a Go8 institution, there was $1 million flow on effects in the economy.
“It’s the first time we have been able to clearly articulate what we have always known: that universities are economic powerhouses and a valuable investment for taxpayers,” says Go8 Chief Executive Vicki Thomson.
“We always knew, for example, that our research income was a strong positive for the nation. What we did not know was the actual worth. This analysis shows it is extremely high with every $1 delivering almost $10 in benefits in a single year for the private sector.”
Professor Ian Jacobs, Chair of the Go8 and UNSW Vice-Chancellor says the report is further evidence that funding for our universities is not a burden or a charitable donation. “It is a wise investment in the future of the nation which yields substantial economic return alongside many other benefits for the people of Australia. The scale of the economic benefit explained in the report will surprise some and be of interest to many in government, industry and higher education”.
The London economics report is further evidence that funding for our universities is not a burden or a charitable donation – it is a wise investment in the future of the nation which yields substantial economic return alongside many other benefits for the people of Australia.
Professor Ian Jacobs, UNSW Sydney, Go8 Chair
While Go8 universities have been delivering higher education and research benefits to our communities for more than a century, this is the first time that we have been able to quantify the benefits of a single year’s activity to the country’s economy. What strikes me is not just the direct value of our graduates and our research, but the broader impact of these on society and social cohesion through productivity and knowledge spillover effects, which total $31bn. This far outstrips public expenditure on Go8 universities, and benefits all Australians, importantly including those who have not had the chance to go to university.
Professor Dawn Freshwater, The University of Western Australia, Go8 Deputy Chair
Australia’s greatest asset is its innovative population, well educated in a world class University system. The benefits of being a clever nation almost incalculable. But even narrowly defined, the economic contribution of our eight research universities is enormous.
Dr Michael Spence AC, The University of Sydney
The report affirms the essential roles of Group of Eight universities in generating jobs, nourishing economies, and enhancing productivity.
UQ is known as a leader in translation and commercialisation of its research, and I am proud that our people lead four of the nine research and innovation case studies highlighted in the London Economics report. They are making global contributions to health, farming and fibre production, and crucial infrastructure.
But – of course – the impact we have on our communities, through our students and graduates, is what we experience every day, and rejoice in.
Professor Peter Hoj, The University of Queensland
Understanding economic flows is an essential first step to making good policy. The London Economics report makes clear the contribution of Group of Eight universities across the nation – and asks, inevitably, how we make more of this flow for the benefit of Australia.
Professor Glyn Davis AC, The University of Sydney
The London Economics Report demonstrates that investment in universities not only contributes to economic growth, but that Australian universities make measurable direct and indirect impacts through their research and education nationally and internationally.
Professor Margaret Gardner AO, Monash University
This report provides an important analysis of the immense value of Go8 universities – and that we give back to the economy and society much more than the funding we receive. Research-led universities uniquely combine innovation, human capital and global connectivity and therefore have a special role to play in the transformation of our society and the forging of a prosperous future for generations to come. The London Economics report demonstrates just this, recognising the importance of higher education to economic development – in terms of direct jobs, the value of our research, and the growth that can be directly connected to our graduates. What we produce is now absolutely critical: smart, well-educated people who can carve out a future in the workforce, innovation programs that can give rise to economies that create instant jobs for us and for our kids, and global connectivity that is enormous in a world that is globalized.
Professor Peter Rathjen, The University of Adelaide
The value of universities is multi-faceted, and easily taken for granted. We open a world of opportunity that reaches outside of our campuses and into Australian homes and businesses. Whether creating highly skilled and valuable graduates, or new companies and technologies, The Australian National University (ANU) is making sure its excellence enriches the nation.
As Australia’s national university we serve the nations interests by producing world-leading research and education that has international impact. We see every day the value of the investment in excellence. However quantifying that value in terms of dollars and cents is not simple. This research, funded by the Group of Eight universities, provides a greater insight into the economic reach of universities. What unites all world-leading research is curiosity and a desire to make a difference to our global community. That motivation is translated directly into job generation in our communities, innovation gains and economic gains every year to Australia.
While this report gives a picture of the magnitude of the economic contribution that universities make to Australia’s future, the vibrant contribution made by PhD students and their influence on the world is harder to quantify. Whether it is a step towards curing disease, or it is research that contributes to our understanding of the history, politics and humanities, every step forward increases the intellectual wealth of our nation.
Professor Brian Schmidt AC, Australian National University
About London Economics
Based in London, and with offices and associate offices in five other European capitals, it advises a global client base on economic and financial analysis, litigation support, policy development and evaluation, business strategy, and regulatory and competition policy.
Its consultants are highly-qualified economists who apply a wide range of analytical tools to tackle complex problems across the business and policy spheres. Its approach combines the use of economic theory and sophisticated quantitative methods, including the latest insights from behavioural economics, with practical knowhow ranging from commonly used market research tools to advanced experimental methods at the frontier of applied social science.
London Economics has extensive experience in the higher education sector. Over the past decade, it has analysed the labour market returns to higher education qualifications and an assessment of the graduate premium and net Treasury benefit on behalf of the UK government’s Department for Education.
Other projects for the UK’s Department for Education and Department for Business, Innovation and Skills include an assessment of the value of education exports to the UK economy; the impact of publicly funded training on firm and industry level productivity; and the spillovers associated with publicly funded education and training.
London Economics is currently undertaking research that assesses the determinants of international demand for UK higher education (for the Department for Education), and is one of the organisations currently delivering the Department for Education’s Centre for Vocational Education Research (looking at the returns to vocational qualifications and the evaluation of the newly introduced Apprenticeship Levy).
It also delivers higher education analyses for university membership associations and think-tanks. It undertook the recent analysis of higher education fees and funding for the Russell Group (representing the UK’s 24 leading research intensive universities); an analysis of the use (and misuse) of higher education metrics for GuildHE, as well as an assessment of the public costs and benefits associated with international students attending UK higher education by parliamentary constituency for the Higher Education Policy Institute.
London Economics regularly provides expert witness to the House of Commons Education Select Committee (on issues relating to the student loan system and Brexit), as well as the House of Lords Economic Affairs Committee (on the value for money in higher education).
London Economics has also provided a number of economic and social impact analyses to individual higher education institutions, including the University of Birmingham, Cardiff University, the Open University, and Queen’s University Belfast. It is currently delivering similar analyses for the University of York and the University of Warwick.
External to its education focus, it has worked with almost every UK central government department.
Its client base includes:
- UK Department for International Trade
- UK Department for Health
- UK Space Agency
- European Space Agency
- European Commission and European Parliament
In Australia it has consulted to the Australian Bureau of Meteorology.