Higher Education and the Economy

My Lords, I, too, congratulate my noble friend Lady Warwick on having initiated this debate. I fear she has been too successful for her own good; we only get four minutes each to speak, and most people here are used to speaking for an hour, not less. I suppose I have to declare a cluster of interests: not only am I a proud graduate of the University of Hull but I am also an ex-director of the London School of Economics and currently a life fellow of King’s College, Cambridge. We should give not three but four cheers for universities—if that concept exists, anyway—because universities are among the greatest unsung achievements of our society and our economy. If you look at the rankings of universities across the world, you can see we have two or sometimes three universities in the top 10, we have a number in the top 50 and even more in the top 100. Only the United States has more universities in those categories. We are a long way ahead of our continental competitors in France, Germany Italy or elsewhere. Universities in this country are certainly a success story. The importance of this debate is that it demonstrates that universities are not just a cost to the Exchequer but actually generate enormous revenue for the country. In a knowledge-based economy, you absolutely have to have large numbers of people in higher education because of that sheer economic output of skilled labour power. We know the other narrow but important economic impacts universities have, which have been mentioned: knowledge transfer and inward investment. I aman ex-head of the LSE, which was a highly internationalised institution. I am pleased to say that it has the highest application rate of overseas students, both for undergraduate and graduate courses. The result of those economic impacts is what some students in the US have identified as a multiplier effect. It is not just that universities bring students into their local community; the money spent in the community is calculated in some American studies to be worth £3 for every £1 that is brought into the area. I shall finish my short discourse by entering two pleas to the Government and the Minister. First, we must give due attention in this country to resisting the creeping commercialisation of universities, especially our top-end universities. We often look to the US to see what is best, but there is a gigantic debate going on there about the corruption of universities by commercial interests, led by the ex-president of Harvard, Derek Bok. People have written books like The University in Ruins. It is a very serious issue there. We must have clear boundaries to protect academic autonomy. If you do not do that, you undermine some of the most important benefits of universities. My second plea is not to limit the understanding of those economic benefits simply to those narrow ones I have just identified, and which were in my noble friend Lady Warwick’s speech. The more important economic benefits of universities are much more diffuse. I offer as an example the career of Tim Berners-Lee, who graduated from Oxford, worked on the margins of universities and industries and worked in CERN in Geneva and MIT. He is the inventor of the world wide web. He did not know what he was inventing, but it has had an absolutely tremendous and worldwide economic impact. For me, the top universities depend on creativity, adaptivity, and insulation from too many commercial pressures if their longer term economic interests are to be realised. I now move from a genius to a child in the classroom. A teacher asks Tommy, ““How old were you last birthday?””, and Tommy says, ““Seven””. The teacher asks, ““How old will you be next birthday?””, and Tommy says, ““Nine””. The teacher says, ““That's impossible!”” Tommy says, ““No it isn't, because today is my eighth birthday””. That is what I mean by lateral thinking and creativity—the basis of the impact that the universities have not only on society but on the wider economy.