£3bn student economy is key to attracting future investment
In considering what drives modern economies and shapes the best and most successful cities, Richard Florida now advocates ‘quality of place’ as the benchmark to replace quality of life. As one of the leading theorists on modern life, and author of several books about the 'creative class', his opinion counts.
Investors are already used to weighing quality of place among their considerations. It is key to attracting and retaining the best talent to cities, especially a highly educated and productive workforce.
Universities are consistently at the heart of these clusters, where talented people draw energy and inspiration in equal measure, and develop the technologies that have proved so adept at disrupting the old and shaping the new economy.
Edinburgh may seem small in terms of total population (just over 500,000 by the most recent count), but with its global reputation as the world’s festival city, and four highly regarded universities, it consistently underlines its credentials as a world-class city. Its universities now have more than 60,000 students in residence, and 40 per cent come to study here from outside the UK.
The University of Edinburgh has been popular with international students since it was founded in 1582, making the city the sixth oldest university town in the English-speaking world. It is now among the top 25 universities in the world, and Edinburgh is ranked 33rd in the 2015/16 QS World's Best Student Cities index. (According to a recent poll of overseas students, the UK as a whole is regarded ahead of any other English-speaking rival destination for all three levels of education.)
Edinburgh universities contribute more than £3.3bn GVA to the UK economy, and more than 40,000 jobs."
The value of this cosmopolitan concentration of expertise can be quantified. According to recent research conducted by BiGGAR Economics, the University of Edinburgh alone accounts for £2bn GVA annually. When Heriot-Watt University, Edinburgh Napier University and Queen Margaret University are included, the total rises to £3.3bn GVA to the UK economy, and more than 40,000 jobs.
Global reach, local benefits
In an increasingly competitive marketplace, universities need to constantly evolve to meet student expectations: new technology and fields of research require continual investment in facilities and capital spending on infrastructure; helping to attract and retain the best academic staff.
The University of Edinburgh’s estates strategy is expected to see cumulative capital spend rise to more than £1.5bn by 2025. (In 2016 it stands at approximately £300m.) In the past three years Heriot-Watt University’s Riccarton campus alone has seen close to £100m of investment and Edinburgh Napier University’s 2020 Strategy foresees an expansion of 20 per cent in the next four years, so it plans to invest more than £100m in its estate over the next decade.
It’s not only universities investing in the student economy; so too is the private sector. A recent survey by Chestertons found that Edinburgh offers high demand and the best returns in the UK for investors seeking opportunities in private student accommodation.
Edinburgh is home to the UK's most highly qualified and productive workforce with 55 per cent of the working population holding a degree level qualification or equivalent."
Such vast capital spending helps drive the local economy, as does the expanding student population. (Student spending on food, entertainment, travel and clothes injects more than £275m in the city economy annually.) It is designed to support the student experience, and enhance the quality of learning, reinforcing a reputation for academic excellence that is reflected in the quality of graduates and the quality of research they deliver.
All four of Edinburgh’s universities undertake research of world-leading quality, the impact of which reaches far beyond university walls to support knowledge transfer partnerships, licensing agreements and start-up enterprises.
As a result Edinburgh is home to the UK's most highly qualified and productive workforce and is internationally renowned for the quality of its talent base. (55 per cent of the working population hold a degree level qualification or equivalent.)
Knowledge transfer
According to the 2014 Research Excellence Framework, 83 per cent of research at the University of Edinburgh and 82 per cent conducted at Heriot-Watt University is classified as either ‘world-leading’ or ‘internationally excellent’.
Both Edinburgh Napier and Queen Margaret University saw more than half of their research programmes classified as world-class, and both have specific research areas scoring in excess of 90 per cent.
Taken together, Edinburgh’s four universities also prove a fertile breeding ground for entrepreneurial activity and business start-ups, supporting nearly 1,000 business launches over the past 45 years – the vast majority of which are still successfully trading. Some, such as pureLiFi and FanDuel, have gone on to establish themselves as some of the UK’s most exciting and fastest-growing technology companies.
In the past 12 months, 44 spinout and start-up companies were established through the University of Edinburgh's enterprise support network alone – itself a record. Investment in these companies also hit a record high, totalling £237m.
Whether in start-ups or established companies, many students now choose to stay and find work in the city when they graduate. This thriving, young and well-educated population, spread right across the city, brings many of the social benefits that Richard Florida values so highly. Writing recently in Monocle he says: “Today, more than ever, we need to feel welcome and be able to self-express. The energy of the city comes from this capacity to express, to think and act outside the norm, to be ourselves, to forge new identities, to create.”