The economic impact of Cambridge University is almost four times that of England’s Premier League, according to new analysis which highlights the role of higher education institutions in accelerating innovation.
Consultancy London Economics calculates the impact of one of the UK’s most prestigious universities at nearly £30bn per year and is estimated to support 86,000 jobs. Every £1 spent by Cambridge creates £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 focusing on universities and research institutes in the “priority” sectors of digital and technology, life sciences, advanced manufacturing, green and creative industries.
“It shows what can be done for universities that are anchor institutions,” said Diarmuid O’Brien, chief executive of Cambridge Enterprise, the part of the university responsible for turning research into business opportunities. “If you prioritize proactively and strategically, you can generate disproportionate returns for the local economy,” he said.
O’Brien said the university, which produced the report, ensures founders and departments benefit financially from spinouts and are supported by access to business expertise, infrastructure and early stage or scale capital.
More than £23bn of economic impact comes from the commercialization of university research, mainly through companies “spun out” of it, the study found.
In contrast, the Premier League, considered one of Britain’s best cultural exports, added £7.6bn to the economy in 2019-20, according to professional services firm EY.
Notable Cambridge university spinouts include Nyobolt, a rapid battery solution, and Abcam, a provider of protein research tools.
Ahmed Goga, director of emerging regions at the CBI, said the investment zone plan should help strengthen other university clusters to match the “extraordinary” ones already built around the universities of Cambridge and Oxford.
Each zone will receive £80 million of “flexible” support from the government over five years, split between tax incentives and investments such as skills and infrastructure aimed at attracting companies.
Goga said the university should work with its partners to shift the culture towards more entrepreneurship in the region. “It is important that businesses are actively involved in design and development,” he said.
Tim Bradshaw, chief executive of the Russell Group of research-intensive universities, said the zone would encourage UK research institutions to grow. “Targeted support through new investment zones will help this established and growing cluster to expand and provide greater benefits to nearby cities and towns and others.”