- This guest blog has been kindly written for HEPI by Professor Warren Manning, Provost for Innovation and Research at the University of Derby, and Dr Jenna Townend, FHEA, Principal Adviser to the Vice-Chancellor at the University of Derby.
- The blog is part of a series of blogs by senior sector figures responding to the themes in HEPI’s recent report on foreign direct investment.
On Tuesday, 16 May 2023, HEPI – in conjunction with Universities UK and Kaplan – will be launching new modelling from London Economics on the economic contribution of international students to the UK. For more details, including how to book a free place, see here.
The UK’s economic growth and its global position as a leader of science and innovation cannot be secured without skills. National policy articulates the importance of the UK attracting foreign direct investment to ensure growth of the economy in cutting-edge industries and, in parallel, ensuring citizens can gain the skills they need to progress in work at any stage of their lives.
A refreshed approach to Foreign Direct Investment within the sector, such as the one advocated in HEPI’s recent report on FDI into UK Research and Development, provides an opportunity for universities to unite their civic and global missions to address these concurrent priorities.
As has been pointed out elsewhere in this series, the narrative that universities do not, or are unwilling to, work together no longer holds water. Regionally motivated collaboration is the key element of working across universities, local and regional organisations and government departments to deliver investment and growth opportunities.
However, while collaboration across government and local and regional growth partners, such as Midlands Enterprise Universities, is key, the correct skills foundations must be in place within our industries in order to attract and deliver on FDI opportunities. This is where the importance of universities delivering on delivering high-quality skills as a means of both attracting investment, leveraging local and regional strengths and addressing regional inequalities comes in.
Current skills shortages within the UK are well documented, with the Federation of Small Businesses reporting that 80% of small firms faced difficulties recruiting applicants with suitable skills during 2021/22. There are significant gaps in higher skills areas, particularly in higher productivity sectors such as Life Sciences, Digital and Clean Energy. However, while Arts, Humanities and Social Sciences subjects rarely get a mention in discussions about FDI, the value of attracting FDI into service and public sector areas should not be overlooked as institutions, such as the University of Derby, consider their areas of priority.
Regardless of the sector, though, a skilled workforce with high-growth potential must demonstrate that they can grow capacity if they are to succeed in demonstrating a return on investment. Operating in an increasingly complex environment, product concepts, design, development and delivery require higher skills applied in roles ranging from operative, to technician, to researcher. Skills needs extend across the full range of qualification levels.
To respond to these needs at the pace required, it is critical for universities to engage with industry to ensure their curricula are industry informed and meet the higher skills need of students and local and global economies. This principle is at the centre of the University of Derby’s approach to learning and teaching.
Our Nuclear Skills Academy launched in partnership with Rolls-Royce in September 2022, and has a minimum 10-year commitment to training 200 new apprentices per year on Level 3 to 6 awards from technician to advanced degree level, and across the areas of nuclear engineering and business. The East Midlands Institute of Technology, opening in September 2023, will also deliver against levelling up the critical engineering, manufacturing and digital skills needed by employers. These are excellent examples of the approaches universities can adopt to building a foundation of high-quality skills as a means of attracting and securing FDI.
Skills challenges also reflect and reinforce the UK’s economic inequality, which plays out across our regions. Building skills and capacity for growth at a regional level is a crucial positive step to increasing FDI and also to addressing regional inequalities. Working with universities, organisations such as Midlands Enterprise Universities and Midlands Innovation, as well as the Department for Business and Trade, and Department for Science, Innovation and Technology, are fundamental to attracting investment to areas outside ‘the golden triangle’.
Derby was recently named as the new headquarters of Great British Railways, an accolade that will deliver high-skilled jobs and contribute to addressing economic inequality in the region. Such developments not only deliver regional growth, but also build national and international reputation as a means of attracting further investment as well as opening more opportunity for social mobility.
An eco-system of contributing factors therefore needs to combine to attract FDI, encompassing not just cross-organisation collaboration, delivery of high-quality skills and provision of excellent R&D infrastructure, but also a thriving workforce with the capacity to deliver on industry ambitions.
Yet in HEPI’s recent report on FDI, it was highlighted in an interview analysis of the main drivers of FDI for investors that while ‘Research Ecosystems’ were considered very important by investors, ‘Quality of Life’ was identified as being of low importance. This is problematic. Investors’ emphasis on high-quality research centres and universities is understandable, given their legitimate need to see a return on their investment. However, the need for both industry and universities to take a long-term and whole system approach to economic growth and productivity also means it is fair to challenge this. If investors and industry are concerned with a sustainable pipeline of talent which relies, at least in part, on the quality of our schools and communities, then quality of life is perhaps deserving of being considered with greater importance.
This is an important point in a regional context, particularly for Derbyshire as one of the most deprived counties in England, with areas of the county falling within the 10% most deprived areas in England. Without paying attention to the quality of life of the region’s citizens, who contribute to the economy through delivering in highly skilled jobs, we risk exacerbating long-term inequalities around education, health and employment. Universities are central to addressing this challenge, given their roles as place-based, anchor institutions in their cities or regions and their strong relationships with local economic growth partners.
If we invest in high-quality skills and building capacity as the foundation for our ability to scale-up our strengths and our offer to potential investors, we will certainly be in a stronger position to attract FDI. We have an opportunity to align the core teaching, research and civic missions of our universities, alongside regional strengths and priorities, to cement the sector’s reputation as a world leader of innovation and research.