British universities are renowned throughout the world both for their acclaimed research output and historical contribution to industry. The University of Cambridge, for example, has produced 90 Nobel Laureates, more than any other university in the world. Meanwhile, UK universities consistently feature in the world top 10 rankings and are the second highest destination for international students after the US.
Today, more and more people are going to university with 50% of those aged 17-30 now attending a higher education institution, compared to 12% in 1979. Like schools though, are universities providing today’s graduates with the necessary skills to forge successful careers in this age of digitalisation? Are they collaborating sufficiently with industry to improve graduate retention and stimulate regional economic growth?
Since the move away from public funding and the introduction of tuition fees in 1998, universities have been placed under greater scrutiny not only in terms of their governance but also their expected contribution to their local economies. The Government has now placed universities at the heart of its current industrial strategy to boost productivity and to rebalance growth away from London and into the regions.
There is increasing evidence to show that universities are playing an increasing role on job creation and in promoting entrepreneurship. This is being brought about via a number of initiatives including collaboration with local industry and government, direct investment and regeneration and via the use of incubators.
Aerial View of Bristol
One excellent example of this is the University of Bristol. The University already makes a significant contribution to the local economy. It is one of the largest employers in the city supporting some 13,000 jobs whilst it contributes some £750m to the region’s GDP. But its scope of influence now extends beyond education, research and direct employment. It is now a pioneering force in nurturing and developing tech start-ups via its highly successful business incubator, Engine Shed and internet accelerator, Bristol SETsquared.
Since its launch in 2003, it has been responsible for helping launch over 200 high-tech companies and create over 1,300 jobs. In 2017 alone, its various incubated companies raised close to £120m in investment and generated more than £75m in revenue. The overwhelming majority of these have remained in Bristol therefore helping to provide a positive contribution to the local economy.
The University is extending the impact of this with its plans to create Engine Shed 2 as well as a new £300m Digital Technology Campus next to Temple Meads Station, due to open in 2020. This is expected to deliver some 17,000 jobs over the next 25 years and add a further £100m a year to the city’s economy. Moreover, it will help to consolidate this part of Bristol as the main technology cluster in the city.
As active investors in the Bristol market, this is interesting to us for a number of reasons. On one level it is helping to stimulate local economic growth but, most significantly, it is helping to drive the next generation of tenants. Our challenge as landlords is to ensure our buildings are fit for purpose to attract these tenants for continued occupation and rental growth.
Our Charities Fund, PITCH, acquired an office building in 2017 adjacent to Temple Meads, in the heart of this technology quarter. The property is let to a variety of tech businesses seeking to be in close proximity to this increasingly creative and collaborative environment. As new businesses are launched and the Engine Shed continues to grow, we expect to see more and more companies ‘graduate’ from the incubator programme into their own offices further driving occupational demand and rental growth.
This is just one example of how universities are influencing business growth and job creation for the benefit of the local economy. We are seeing similar examples in a number of regional university towns and cities. The success of Oxford and Cambridge-incubator companies is well documented but we are also seeing similar trends in Manchester, Nottingham and Leeds, locations which are experiencing robust occupational demand and take up. These factors are helping to drive our regional office strategy and provide the conditions for continued out-performance.
Fund Manager of the Property Income Trust for Charities