Universities as engines for economic growth
This blog was kindly authored by Laura Trevelyan, Chancellor of Cardiff University.
2025 was something of an annus horribilis for Britain’s universities. It felt as though barely a week went by without another alarming report on a university facing a ballooning deficit, compulsory redundancies, shrinking student numbers, or worse. Yet beneath the depressing headlines there is a good news story to tell, about how our universities are vital economic engines. I’ve seen this first hand in my ten months as Chancellor of Cardiff University. Britain’s productivity is currently low and recent economic growth has been anaemic. But universities can help put Britain back on the map by commercialising their cutting-edge research, encouraging investment in biosciences and AI which can create the well-paying jobs we need.
Living in America with a son in college, I’ve had a front row seat during a turbulent year for American higher education. The Trump administration’s determination to bring what it sees as woke institutions to heel by whatever means necessary is to Britain’s advantage. Talent will go where the opportunities are. Professor Baljit Khakh, a global authority on brain function, was recently appointed Director of the UK Dementia Research Institute at Cardiff University. Professor Khakh studied at Cardiff as an undergraduate and as Professor of Physiology and Neurobiology at UCLA made fundamental advances in understanding how our brains work. Thanks in no small part to the UK Government’s Global Talent Fund, Professor Khakh chose to come home. His work on dementia will, we hope, change lives while powering Welsh and UK science to new heights.
As Cardiff’s Chancellor, I have learned just how much higher education in Britain contributes to the UK economy – an estimated 265 billion pounds annually of which Cardiff’s share is 3.7 billion.
Not only do we provide employers with skilled graduates who pay higher taxes, but we are ourselves one of Wales’ largest employers – almost 1 in every 135 jobs in Wales depends on Cardiff University. Our domestic and international students spend money in Cardiff. Like all of Britain’s universities in their different ways, Cardiff is an anchor institution for our community. Yet it is our role as a research university which holds even greater potential for unlocking economic growth.
I confess that I had no idea what a spinout was until I attended a showcase event in Cardiff Bay on a sunny September evening. Now, I know that a spinout is a new company formed by academics to commercialise intellectual property and technology developed through university research. At Cardiff, we have 164 spinouts and staff and student start-up companies. I was bowled over to learn that a Cardiff spinout called Draig Theraputics (Draig is Welsh for dragon) has raised 140 million pounds from investors for a clinical stage trial into a new drug which could treat neuropsychiatric disorders – conditions like depression and ADHD.
That’s just one example of how research has an impact in the real world, driving entrepreneurship and innovation, and if a new drug comes to market, transforming lives. At Cardiff, we honour our Welsh language and heritage when naming spinouts. Nisien.AI (named for the brother Nisien in the Mabinogion story who fosters peace and reconciliation) works in cybersecurity to make the online world safer by reducing threats and encouraging constructive dialogue. Cardiff is far from being alone in developing spinouts – the latest register details 2,269 companies founded or owned by 100 UK higher education providers. Of course, some of these companies may fail to reach their potential – but others will flourish. This data helps us understand how Britain’s universities are generators of innovation in the economy.
It’s not all doom and gloom within British higher education. Yes, our funding model is broken and we’re trying to figure out a new one. But there are exciting developments afoot which could bring new hope to millions while generating economic growth. In December, the first patient was treated in a clinical trial for a pioneering virus technology targeting cancer cells. The technology was originally developed by Cardiff University scientists. Our future is bright.
Comments
Jonathan Alltimes says:
1) Economic output growth varies a lot by region, which means the economic functions of universities are not likely to be exactly the same, depending on employers, factor endowments, and tacit knowledge. For the 25-year trend, see the ONS data here: https://www.ons.gov.uk/economy/grossdomesticproductgdp/bulletins/regionaleconomicactivitybygrossdomesticproductuk/1998to2023#gross-domestic-product-by-uk-country-and-region
2) The best functional determinant for economic output growth from the universities is teaching very high level methods and facts for knowledge creation relevant to old and new industries.
3) Large-scale sectoral research funded by government grants should preferably be conducted within research institutes outside of the universities, which combine specialisms and train PhD students. Universities have the autonomy to fund their own research.
4) Commercialisation of research should occur outside of the universities and research institutes.
5) The nations should move to supporting further education colleges with which universities should consider collaboration.
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Ron Barnett says:
I have just returned from Amsterdam (having been involved in one of its ceremonies there).
In conversation, I mentioned that all the higher education political and policy talk in England (and I distinguished England from the other UK regions) is about economic growth and skills – and I was received with utter blankness.
‘What kind of skills?’ I was asked. Those for economic growth, I responded. Again, utter blankness.
Actually, the conversation then got into the nitty-gritty as to how that could be, as to whether distinctions were made between different kinds of skills, and as to ‘surely, there is mention of ‘knowledge and understanding?’ …
It’s conversation such as this, with colleagues only a train ride away, that reminds one – if one needed any reminding – that England, as I explained to my hosts, is – with the USA – an outlier in its embrace of a neoliberalism to shaping its higher education imaginary.
I’d like to ask – in these HEPI columns – just when might we see a university leader or a think-tank director espouse a view of the university and higher education for cultural enhancement (a la Robbins), or wisdom, or human flourishing, or critique, or for imagining quite new possibilities in re-orienting the university in the context of worldly and Earthly crises; but then such questions would be bound to fall on stony ground …
This is a new time, a new age, an age of great peril for this planet in so very many ways. Where, when, might we see the imaginative offerings that even begin to be adequate to the challenges that humankind is facing?
Ron Barnett
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Jonathan Alltimes says:
At the beginning of the medieval universities, students were educated for occupations in politics (seven liberal arts), theology, medicine, and the jurisprudence of civil law. Students learnt the skills of rhetoric and dialectic, and for more advanced study, the art of disputation, for it was disputation in civil law which could settle disputes about property and could temper the despotic kings as warlords. Disputation could settle political, theological, economic, and even empirical disagreements peaceably. All the ideas to which you refer can be incorporated into learning for an occupation, but are not its purpose. The founders and leaders of Bologna, Padua, Paris, and Oxford saw the possibility an institution which could be partially independent and autonomous of the household, state, church, and business. The guild for the college of the community of study, encapsulated in the transactional form of the university is unique to European society and culture and was powerful cultural source. Robbins was looking backwards to a time when education for the elites did not need to concern itself any longer with the economic, except for the administration of the British Empire, as industry had overtaken the agrarian and mercantlist economic culture of the lords. Universities could think and teach about other things and so they abandoned the skills which had enabled us to think out loud, to persuade, to dispute, to judge, and to agree.
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