New study puts Cambridge University’s economic impact at more than £50 billion
If the University of Cambridge did not exist more than £50 billion and over 150,000 jobs would be needed to replace its economic impact on the UK, according to a landmark study.
‘The Impact of the University of Cambridge on the UK Economy and Society’ report was released today following months of research by Cambridge-based research firm, Library House. The report is the first rigorous study of its kind to be conducted on a UK university and its development has been supported by the East of England Development Agency (EEDA), the Cambridge Network and the Greater Cambridge Partnership.
The report concludes that the University of Cambridge contributes a massive £951 million in direct expenditure to the UK economy every year. In the absence of the university, and consequently the absence of the Cambridge Cluster, the cumulative economic impact on the UK over the next 10 years would be a loss of £57.5 billion in Gross Domestic Product (GDP) and 154,000 jobs.
The results of the study provide further evidence of the importance of the university to the Cambridge Cluster. One impact resulting from the university’s teaching activities is an increased entrepreneurial spirit, which has played, and still is playing, an important role in the Cambridge region.
Cambridge Consultants, which was founded in 1960 by a Cambridge University graduate, inspired the establishment of more than ten other contract research organisations, the existence of which have been influential in the development of the Cambridge Cluster. This is now Europe’s leading biotechnology cluster and the university has played an important role, both directly and indirectly, in its formation, which now numbers about 900 innovation based companies. In 2004, these knowledge-based businesses generated £3.4bn in revenues, employed over 27,000 people directly and attracted 20 per cent of the venture capital invested in the UK. 250 companies have been started based on knowledge transfer from the university and survive today. Of these 250 companies, 175 are located within the Cambridge Cluster.
Other key findings of the study include:
• The University of Cambridge is a significant business in its own right with annual direct expenditure of £951 million
• It directly employs more than 11,700 people and in total supports more than 77,000 jobs in the East of England
• If the university did not exist, the impact of the loss of its expenditure and employment over the next 10 years (excluding the impact of the Cambridge Cluster) would require:
- Regionally – replacement of a net present value (NPV) of £21.2 billion in GDP and about 77,000 new jobs
- Nationally – replacement of an NPV of £4.4 billion in GDP and about 10,800 jobs
• To date 51 companies have spun-out directly from the university, of which 33 operate in the biotech sector and seven in the IT or telecommunications sectors.
• Cambridge-associated researchers have received more Nobel Prizes than any other university (81 in total)
Richard Ellis, chair of EEDA, said: “We already know that the University of Cambridge is one of the world’s leading universities, but this study gives us much more detail on its economic and social impacts on the East of England and UK economies. The report gives a fascinating insight into the contribution the university makes to the Cambridge Cluster and to hi-tech companies in the East of England. The entrepreneurial spirit has and continues to play an important role in the Cambridge Phenomenon, generating many new enterprises.
Charles Cotton, executive director of Library House, said: “This report demonstrates that the University of Cambridge ranks in the top three research universities in the world. Cambridge combines this global academic standing with a significant impact on the formation and continuing development of the Cambridge Cluster which magnifies its economic impact on the East of England and the nation.“