The economic impact of the University of Cambridge is almost four times that of the English Premier League, according to a new analysis that highlights the role higher education institutions play in accelerating innovation.
Consultancy London Economics calculated the impact of one of the UK’s most prestigious universities at almost £30bn annually and estimated it supported 86,000 jobs. Every £1 spent by Cambridge created £11.70 of economic value.
The findings come as the government looks to the higher education sector to help drive economic growth by boosting research and development. Chancellor Jeremy Hunt announced 12 low-tax investment zones in last week’s Budget focused on universities and research institutions in “priority” sectors of digital and tech, life sciences, advanced manufacturing, green and creative industries.
“It shows what’s possible for universities acting as anchor institutions,” said Diarmuid O’Brien, chief executive of Cambridge Enterprise, part of the university responsible for helping to convert research into business opportunities. “If you put in place proactive and strategic priorities you can drive a disproportionate return for the local economy,” he added.
O’Brien said the university, which commissioned the report, ensured that founders and departments benefited financially from their spinouts and were supported with access to business expertise, infrastructure and early stage or scale-up capital.
More than £23bn of the economic impact came from commercialising university research, particularly through companies “spun out” from it, the study found.
In contrast, the Premier League, regarded as one of the best UK cultural exports, added £7.6bn of value to the economy in 2019-20, according to professional services company EY.
Notable Cambridge university spinouts include Nyobolt, a fast-charging battery solution, and Abcam, a leading supplier of protein research tools.
Ahmed Goga, director of thriving regions at the CBI, said the investment zone plan should help strengthen other university clusters to match the “exceptional” ones that have build up around both Cambridge and Oxford universities.
Each zone will receive £80mn of “flexible” support from the government over five years, split between tax incentives and investment such as in skills and infrastructure aimed at attracting companies.
Goga said universities would need to work with partners to drive a cultural shift towards more entrepreneurship in these areas. “It’s essential that business is actively involved in the design and development,” he said.
Tim Bradshaw, the chief executive of the Russell Group of research intensive universities, said the zones would encourage UK research institutions to drive growth. “Targeted support through new investment zones will help these established and emerging clusters to scale up and deliver much greater benefits for nearby towns and cities and beyond.”