Earlier this week, a forecast from the Organisation for Economic Cooperation and Development stated that the UK would have the fastest growth of any major economy in 2021.
However, it also suggested that following the biggest decline in its economy since the great Frost of 1709, it would take longer than many of its global competitors such as Germany or the USA to regain the losses suffered during the Covid-19 pandemic.
Given this, it is clear that there will need to be a concerted effort by both government and the business community to regain lost ground over the next few years.
According to a report from Universities UK, a key actor in supporting businesses, employment and local regeneration will be higher education. By working in partnership with the public, private and voluntary sectors, it can be a driving force behind the recovery of the UK as well helping to level up the UK through skilled graduates and driving forward local regeneration projects.
Finally, and perhaps most importantly, it will drive up productivity and competitiveness through innovation, knowledge exchange and the creation of new businesses.
So what does this mean for Wales and how will its university sector contribute to the economy and society over the next five years?
In terms of supporting the NHS and schools to develop their capacity after a difficult fifteen months of dealing with crisis, it is estimated that more than 10,500 nurses, 4,250 medical specialists and 8,000 teachers will graduate from UK universities by 2026.
However, within the wider economy, there is clearly going to be a need for a more significant role for universities in supporting businesses with Wales having the highest proportion of employers (68%) who anticipate a need for upskilling in the next twelve months. In fact, it is anticipated that over a five year period, universities in Wales will have delivered the equivalent of 4800 years of professional development training and education courses to businesses and charities.
Welsh universities will also provide £238 million of support to small enterprises, businesses and not-for-profits including access to specialist advice, the latest facilities and equipment to develop innovative products, and bespoke research projects.
In addition to these activities, the higher education sector in Wales is expected to attract £670 million of national and international public funds to spend on collaborative research with businesses and non-academic organisations although this remains well below what universities should be doing.
Wales continues to perform poorly in terms of attracting money for innovation with Welsh research organisations having received only 2% of funding from Innovate UK (the UK’s innovation agency) over the period 2004-2021. More worryingly for a Welsh Government that is committed to creating more green jobs in the economy, only 1.2% of all UK innovation funding for clean growth and infrastructure has come to Wales.
More encouragingly, universities in Wales are forecast to form over 1,500 new firms – which is proportionately the best startup rate of any of the home nations – although the challenge as always will be to convert these spinoffs and graduate enterprises into growing companies.
Of course, the report is just an estimate of the potential contribution of higher education but it is clear that with increased backing, universities could be a major driving force in enabling a stronger and faster recovery for Wales from the pandemic. So what could or should be done to support this?
Firstly, Welsh universities need to continue and grow their collaborations in research and innovation, skills, training and business support with partners across the private and public sector. However, with much of that activity previously being supported by European Structural Funds in Wales, a new approach will need to be developed to ensure that they access funding under new programmes such as the UK Shared Prosperity Fund.
Secondly, whilst the UK Government should take the lead in efforts to improve and maintain funding to rebalance regional research and innovation funding via national agencies, it is also important that the Welsh Government, universities and businesses come together to drive home the point that this historical underfunding is no longer acceptable and to make a case, along with other poorer regions, for a fairer share of grant support.
Thirdly, Welsh universities should look for opportunities to focus even more of their
spending within the local economy especially through ensuring a greater level of procurement with Welsh SMEs.
Finally, and perhaps most importantly, there needs to be a greater level of collaboration between Welsh local authorities and the university sector. For too long, this is a relationship that has not been nurtured sufficiently by both parties and given the impact that higher education can have in boosting local job creation in a variety of ways, this needs to be a priority for the future.
Therefore, the report suggests that the higher education sector in Wales can be a major force for the renewal and recovery after one of the most turbulent periods in the nation’s history. And with the right support, encouragement and partnerships, it can be a catalyst for positive change at a time when the Welsh economy needs it more than ever.