Tag: Economic

  • A government running out of road still sets the economic weather for higher education

    A government running out of road still sets the economic weather for higher education

    For a party that it’s become fashionable to criticise for failing to have prepared for power, Labour has in fact set an awful lot of ambitious policy machinery into motion over the last 16 months.

    There’s barely been a month go by without some large-scale reform to how the country is governed, organised, and understood as a sum of diverse parts and competing pressures, and we’ve had our work cut out thinking through the implications of each for the higher education sector: from devolution to industrial strategy, from health reform to an explicit tying together of skills and migration (which has barely got started yet), from a new communities strategy to belatedly moving skills policy to the Department for Work and Pensions.

    Whatever your views on the merits and mechanics of these, and the many other initiatives that different departments have launched, they are all downright interesting – and pose a plethora of questions for how higher education fits in and demonstrates value.

    But all need time. The overall ambitions of devolution are still on their starting blocks as councils pitch their ideas for new geographies; the industrial strategy was explicitly badged as bearing fruit in 2035; the NHS workforce plan that should really have been alongside the 10-year health plan has been delayed to the spring – and so on and so on. No-one involved in pulling together all these long-term reforms did so under the assumption that all the pieces would be in place within one parliamentary term.

    Yet here we now are, with the commentariat consensus being that both Keir Starmer and Rachel Reeves are toast, and public sentiment pointing emphatically in that direction as well – though this is not to say the party cannot regain momentum under a new leader. The sector is already asking questions about how to prepare for a Reform government (as discussed in the most recent instalment of our new HE Influence newsletter, I should mention).

    The post-16 white paper presented a somewhat upbeat vision of what the government would like higher education’s role to feel like across the country, but was weaker on any kind of immediate reform, proposing instead that traditionally glacial changes to research funding, a piece-by-piece strengthening of the Office for Students’ remit, and putting FE, HE and business in the same room would do much of the heavy lifting, given time and goodwill.

    All this feels like a recipe for the sector to retreat to more comfortable home territory over the next few years, fighting battles over the international student levy, the size of teaching grants, and the shape of the REF, and gradually giving up on pushing for a central role in the government’s overall vision for the country, given the increasing probability that dreams like a planned and unswerving industrial strategy will all be swept away in 2029.

    Quite what’s to be done about all this is a question for another day – with the Budget looming on Wednesday, and admittedly still three and a half years in office remaining for Labour, the other thing that’s worth reflecting on is quite how much the choices the Chancellor makes around tax, public spending, debt, and general macroeconomics will determine the success – or otherwise – of higher education institutions in England over the next few years. These big tickets items all impact the sector deeply, however much the temptation might be to throw one’s hands up in the air, snipe about a “tax” on overseas recruitment, and start looking at what opposition parties can be convinced of.

    Labour on labour

    There’s a pretty strong case to be made for the most consequential policy decision for universities since Labour came to power being the decision to hike employer national insurance contributions in last autumn’s budget. Clearly it has cost universities a small fortune, and the move also sucked up a sizeable slice of the government’s various funding “boosts” for schools and FE colleges – and the NHS and elsewhere – leaving less putative generosity to go around.

    But perhaps most importantly of all, the ENICs rise has decimated the labour market for young people – in the court of public opinion at least – by making new hires and part-time workers more expensive, all while AI is supposedly making them obsolete.

    The result is that university graduates – and the institutions ever more judged on those graduates’ success – are seen to be in a right old state. The Guardian was the latest to take a run at this last week, with tales of qualified grads banging their heads against the job application wall, accompanied by analysis from the paper demonstrating that almost half of all jobs lost since Labour came to power were among the under-25s. Down in the small print we see that this is driven almost entirely via reduced employment of 16- and 17-year-olds, but the vibes aren’t good, even if less hyperbolic analysis from the likes of the Institute of Student Employers and Prospects Luminate paints merely a concerning, rather than cataclysmic, picture.

    The sad fact is that, longer term, this deluge of negative publicity about the value of a degree – alongside a necessary tailing off of the supposed “graduate premium” as a viable sector talking point as the minimum wage heads ever up – will inevitably move from being fodder for anti-HE journalists to actually driving changes in young people’s decision-making (even if a tight jobs market in the short-term often pushes graduates back towards postgraduate study) and scar the sector’s ability to make its case for its value.

    The result is that keeping a watchful eye on Labour’s economic moves around the costs associated with employment – both on Wednesday and beyond – has become a matter of some importance for higher education. Further increases in the national living wage over the next few years, lower-profile changes to business taxation, and even wildcards like any surprise revenue-raising changes to the growth and skills levy, all hold the possibility of making this problem worse. All while leading to higher costs for universities and making it harder for students to work alongside their studies, despite this being ever more necessary.

    Pound in pocket

    Rachel Reeves finally taking the plunge with an income tax rise, as a good proportion of the Labour backbenches were calling for, seems to have definitively fallen off the table for the Budget – with a handful of consequences worth noting for the sector.

    First, it will almost certainly mean that future spring and autumn statements will be equally fraught, as the Treasury fails to leave clear blue water between its spending plans and its spending rules. By not maintaining a sensible “headroom”, public finances will remain permanently at the mercy of external shocks and OBR downgrades, and we’ll probably be back here in less than six months’ time wondering what levers will need to be pulled. At least at some point in the Parliament, said levers will end up being haircuts to departmental budgets rather than new taxes or further borrowing.

    Following on from this, the use of a basket of smaller revenue-raising measures to partially fill the gap left by not raising income tax increases the likelihood that this shortfall gets filled by employment-related measures – that is, all the issues we’ve been over above, which have serious consequences for universities as large employers who are not quite in the public sector (as may be the case this week if rumoured changes to salary sacrifice rules go ahead).

    And the other effect that an income tax rise would have achieved, which the “smorgasbord” approach will not to the same extent, is bringing down inflation.

    Inflation is arguably the most serious financial threat that higher education institutions face. Even if many within the sector, both in internal conversations and public pronouncements, are often quite happy to let audiences believe that measures like the dependants ban are what’s most responsible for blowing a hole in HE finances, the fundamentals weren’t sound even before the post-pandemic recruitment glut.

    While tuition fees and maintenance loans in England (and, at least for one year, Wales) are now linked to inflation, or more precisely to inflation forecasts – Office for Budget Responsibility predictions on Wednesday will set the levels for 2026–27 – the idea of any measures to compensate for all the shortfalls baked in over several years of rocketing price rises appears to have been permanently nixed.

    And it’s worth bearing in mind that the index link does not mean that either student maintenance or teaching funding will actually keep pace with inflation in the coming years. For one thing, OBR forecasts have repeatedly underestimated inflation, and there’s no corrective mechanism in the system. For student maintenance, even if predictions come true, other features of the system mean that the average, rather than maximum, maintenance loan continues to be worth less each year.

    For teaching funding, it’s important to stress that Labour has in no way committed to keeping the overall package inflation-proofed. While tuition fees are the major part here, other elements such as high-cost subject funding took a real-terms tumble this year, and no-one is predicting that the reforming the Strategic Priorities Grant means upward movement on how much it’s worth – the reverse is far likelier, given DfE’s commitments elsewhere.

    University staff have had a decade or more of below inflation pay rises, and there doesn’t seem any serious capacity or appetite among higher education employers to do fundamental work here – the year-on-year squabbles will continue, and high levels of inflation over the coming years will eat further into staff remuneration and the attractiveness of higher education careers.

    And inflation-linked rises in tuition fees will also change applicant behaviour. One thing we’ll start getting a sense of on Wednesday will be the likelihood of when fees will cross the (supposedly) psychologically important barrier of £10,000. Back in March, the OBR was expecting RPIX to run at 2.7 per cent in Q1 2027, and 2.8 per cent in Q1 2028, which would lead to tuition fee caps of around £9,790 in 2026–27 and around £10,065 in 2027–28. We won’t know for certain until autumn 2026, but the picture will start to come into focus.

    Now the significance of fees being materially above, rather than roughly equal to, £10k is perhaps overstated. But DfE isn’t really sure – it has reportedly commissioned modelling on how students will respond to rises, but the results aren’t due until the spring.

    All in all, there’s a whole host of reasons why Budget decisions and their effect on inflation, as well as the OBR forecasts themselves, have become heavily intertwined with the future behaviour and wellbeing of higher education staff and students.

    Gilt trips

    Perhaps the most overlooked publication of the last few years for really understanding how the Treasury thinks about higher education is the Institute for Fiscal Studies analysis of how the interplay between interest rates and Treasury gilts affect the cost of student loans.

    In a nutshell, it costs far more for the government to borrow than it used to (the 15-year gilt yield has continued to rise since the IFS did its sums in January 2024), and so it’s very reluctant to allow for too much expansion in the student loan book – it’s a far cry from when the broad strokes of student finance were put in place by the coalition government, and this was basically thought of as free money.

    This goes a long way to explain why the government is so reticent to use the student loan book in any radical way – and thus we see things like a real-terms freeze in tuition fees being presented as if it’s an almost saint-like act of generosity to the sector, or the foundering of DfE’s tepid-but-probably-genuine desire to properly boost maintenance loans.

    We’re waiting for the specifics (hopefully) of maintenance grant implementation on Wednesday, but the cost of government borrowing feels like it has played a role in the last year of behind-the-scenes policy deliberations here. In the run-up to last autumn’s Budget, there was plenty of speculation, and government nods to the press, about the potential for movement on the overall maintenance package and grants in particular. Clearly the battle with the Treasury was lost, and DfE was told to come up with an alternate source of funding – hence the international student levy. What we don’t yet know is to what extent grants will replace, rather than supplement, loans – if what we see is a switch from one to the other, the expense to the public purse of borrowing is a likely primary driver, especially given the hidden costs associated with annual tuition fee rises. While the sector isn’t really getting any more money in real terms, this isn’t to say that the government’s finances are not being stretched by indexing fees.

    What this all means is that, unfortunately, the sector needs to keep an eye on the gilts market. The supposed flip-flop on raising income tax has already done some damage here, and the government repeatedly needing to borrow more than it expected to is another issue. There’s a wider question of perceived government competence around balancing the books that drives behaviour too – confidence is in short supply as it is, and it will get worse if the Starmer era implodes. This all equates to longer-term uncertainty about the use of the student loan book.

    Even if you’ve given up on the Labour government in its current form, and are pinning hopes on a future government being more receptive to calls for support and investment in both universities and students, Number 10 and the current Treasury team are still setting the economic weather. While much of the sector will be waiting for the moment Rachel Reeves stops speaking on Wednesday to see the fee levy policy paper – assuming there is one, and the can doesn’t get kicked – there are many reasons to think the wider public finances are a much more important determinant of the future of higher education. And it’s one that isn’t painting a particularly cheery picture at the moment.

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  • Universities and economic growth in the Commonwealth

    Universities and economic growth in the Commonwealth

    Join HEPI for a webinar on Thursday 11 December 2025 from 10am to 11am to discuss how universities can strengthen the student voice in governance to mark the launch of our upcoming report, Rethinking the Student Voice. Sign up now to hear our speakers explore the key questions.

    This blog was kindly authored by Professor Colin Riordan, Secretary General, The Association of Commonwealth Universities.

    Governments throughout the Commonwealth are faced with a familiar dilemma. Once seen as central to nation-building, poverty reduction and technological self-sufficiency, universities in many countries face scepticism and waning public support. At a time when cost of living pressures are relentless, institutions are increasingly seen as ‘a kind of elite luxury that the taxpayer pays for’, as Michael Ignatieff recently put it. But that narrative misses the point. New evidence shows that investment in higher education delivers measurable, long-term economic growth – the kind that no government can afford to ignore.

    Education as economic infrastructure

    The evidence is revealed in a new study, undertaken by London Economics at the request of The Association of Commonwealth Universities, to investigate the link between investment in higher education and economic growth.

    The study found that a hypothetical 1% increase in the proportion of the population obtaining tertiary education qualifications (tertiary attainment) in 2025 would boost Commonwealth GDP by US$28 billion in 2029. That’s in addition to further increasing annual gains along the way, a clear sign that higher education returns compound over time.

    Why does this matter? Well, it is clear that many, if not all, of the pressures on universities stem from a paucity of resources following on from the 2008 financial crisis (from which many large economies have still not recovered); from the Covid pandemic; and from an upturn in conflicts across the world that are costly drains on the public purse. The difficulties are exacerbated by locally specific problems, including natural disasters such as drought, flooding, and extreme weather events, as well as political events such as Brexit, trade wars, and political instability.

    Governments have to find ways to restore their position in the face of these headwinds, and higher education can easily be depicted as part of the fiscal problem rather than of the solution. Demonstrating the return on investment in higher education will allow education ministers to go well-armed into the conference chamber with their finance ministers and national leaders.

    Beyond the balance sheet

    There are other economic arguments for universities, of course. Their knock-on effects through research and innovation, as employers, and as attractors of foreign direct investment, all come in addition to their core educational function. Universities improve public health outcomes, generate productivity gains, and strengthen civic life. But making the case for higher education as central to national prosperity is essential at a time when governments are facing seemingly intractable difficulties.

    The message, then, is clear: far from being a luxury perk for the elite, expenditure on higher education is an investment in critical national infrastructure. Building opportunities in higher education equates to building a road to future prosperity. Unlike eye-catching projects involving new roads, railways, bridges or airports, however, increasing the proportion of the population with higher education qualifications requires a leap of the imagination, and an array of arguments to be marshalled.

    Certainly, a clear vision of how the world will be different as a result of such an investment is critically important. Voters and populations want to know what difference more university places will make to their lives. It is up to politicians to set out that vision, but they themselves must first be persuaded, and so we must marshal further helpful arguments to support them.

    A shared responsibility

    Firstly, the investment does not have to come solely from the public purse. Tertiary attainment is the proxy that implies prior increases in expenditure on higher education, which could include private investment, partnering with overseas institutions, changing the proportion of the cost for which the individual is responsible, or imaginative loan schemes. Reformulating incentives and requiring efficiencies could certainly be in the mix. So, no education minister should need to envisage themselves going cap-in-hand to the finance department.

    On the contrary, they can offer the prospect of contributing to the public coffers in due course. Depending on the size of the country and the proportion of tax take, this could range from the US$ billions in a country like India to hundreds of millions in Bangladesh and many tens of millions in Kenya.

    A call to reimagine policy

    In a country like the UK, the GDP boost of a hypothetical 1% increase in tertiary attainment in 2025 would amount to £4.9 billion in 2029. This means that increasing capacity in higher education is fiscally prudent as well as being the most important tool we have to future-proof the economy and improve productivity in an age of AI-driven technological transformation. But in low-income countries, the multiplier effect is even higher, and so the argument for investment is stronger still.

    Commonwealth countries with rapidly growing youth populations face an urgent need to expand tertiary access if they are to harness their demographic dividend. Targeted investment in higher education is one of the most effective levers to drive inclusive, sustainable economic growth. The evidence supports stronger collaboration between governments, universities, and international funders to build tertiary systems that deliver for national economies.

    With all necessary caveats in relation to correlation versus causation, the results of the London Economic analysis are compelling. Governments that embed higher education policy into national economic planning and industrial strategies, and invest in universities as economic assets and hubs for talent development, innovation and productivity, will do more than balance their budgets: they will secure their future.

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  • The Economic and Social Impact of Small Colleges in Rural Communities – Edu Alliance Journal

    The Economic and Social Impact of Small Colleges in Rural Communities – Edu Alliance Journal

    By Dean Hoke, October 13, 2025 – In the small towns of America, where factories have closed and downtowns often stand half-empty, a small college can be the heartbeat that keeps a community alive. These institutions—sometimes enrolling only a few hundred students—serve as economic anchors, cultural centers, and symbols of hope for regions that might otherwise face decline.

    From the farmlands of Indiana to the mountain towns of Appalachia, small colleges generate economic energy far beyond their campus gates. They attract students, faculty, and visitors, stimulate local business, and provide the trained workforce that rural economies desperately need. They also embody something deeper: a sense of identity and connection that sustains civic life.

    Economic Impact: Anchors in Fragile Economies

    Small colleges are powerful, if often overlooked, economic engines. Their presence is felt in every paycheck, every restaurant filled with students and parents, and every local business that relies on their purchasing power.

    Across the United States, nearly half of all public four-year colleges, over half of all public two-year colleges, and a third of private four-year colleges make up the 1,100 rural-serving institutions as identified by the Alliance for Research on Regional Colleges (ARRC). These colleges educate 1.6 million students, accounting for more than a quarter of total U.S. enrollments. Yet their role extends far beyond classrooms and degrees.

    Rural-serving institutions are frequently among the largest employers in their counties, especially where other industries have faded. In areas where 35% or more of working-age adults are unemployed, 83% of local colleges are rural-serving, making them pillars of economic stability. Unlike large universities in metropolitan areas, their spending is highly localized—on utilities, food service, maintenance, and partnerships with small vendors.

    Economic models underscore their importance. The Brookings Institution found that high-performing four-year colleges contribute roughly $265,000 more per student to local economies than lower-performing institutions, while two-year colleges add about $184,000. In many rural towns, every institutional dollar recirculates multiple times, magnifying its effect.

    Beyond direct payroll and procurement, small colleges attract outside dollars. Students and visitors rent housing, dine locally, and shop downtown. Athletic events, alumni weekends, and summer programs bring tourists who fill hotels and restaurants. The IMPLAN consulting group estimated that when a college closes, the average regional loss equals 265 jobs, $14 million in labor income, and $32 million in total economic output—a devastating hit in thin rural economies.

    Human Capital and Workforce Development

    If small colleges are the economic engines of rural communities, they are also the primary producers of human capital. They educate the teachers, nurses, business owners, and civic leaders who sustain local life.

    The Federal Reserve Bank of Richmond describes community colleges as “anchor institutions” that shape regional labor markets. Many partner with local employers to design training programs that meet specific workforce needs—often at minimal cost to businesses. In one case study, a rural college collaborated with an advanced manufacturing firm to tailor instruction for machine technicians, ensuring a steady local labor supply and convincing the company to expand rather than relocate.

    Rural-serving colleges are also critical in addressing educational disparities. Only 22% of rural adults hold a bachelor’s degree, compared with 37% of non-rural Americans. This gap translates directly into income inequality: according to the U.S. Department of Agriculture’s Economic Research Service, nonmetro workers with a bachelor’s degree earned a median of $52,837 in 2023, compared with substantially higher earnings for their urban counterparts. In states such as Indiana, Ohio, and Pennsylvania, rural degree attainment lags 10 to 15 percentage points behind state averages.

    Beyond Economics: RSIs as Equity Infrastructure

    Rural-serving institutions are more than economic engines—they are critical equity infrastructure, often providing the only realistic pathway to higher education for students the system has historically marginalized.

    RSIs enroll far higher proportions of high-need students than their urban counterparts. Nearly 50% of undergraduates at RSIs receive Pell Grants, compared to 34% nationally. These institutions also serve disproportionate numbers of first-generation students, working adults, and students from underrepresented communities who lack access to flagship universities.

    For many rural students, the local college isn’t a choice—it’s the only option. Geographic isolation, family obligations, and financial constraints make residential college attendance impossible. Research shows that every ten miles from the nearest college reduces enrollment probability by several percentage points. For students without transportation, without broadband for online learning, or without family support to relocate, the local institution is existential.

    When rural colleges close, equity suffers most. Displaced students, if they re-enroll at all, face higher debt burdens and lower completion rates. Wealthier students can transfer to distant institutions; low-income students stop out. Communities of color, already underserved, lose ground.

    Policymakers often evaluate colleges through narrow metrics: completion rates and graduate earnings. But this ignores mission differentiation. RSIs serve students that flagship universities would never admit, in places that for-profit colleges would never enter, at prices that private colleges could never match. Investing in rural-serving institutions isn’t charity—it’s infrastructure investment in equity, ensuring every region has pathways to economic mobility. If America is serious about educational equity, it must recognize RSIs as essential public infrastructure, not discretionary spending.

    Despite these barriers, rural institutions remain lifelines for upward mobility. They offer affordable tuition, flexible programs for working adults, and pathways for first-generation students who might otherwise forgo higher education.

    However, the pressures are real. Rural students face tighter finances, higher borrowing costs, and fewer grant opportunities. Nearly half of rural undergraduates receive Pell Grants, but average aid remains lower than that at urban institutions. Many graduates leave rural areas to find higher-paying jobs, a “brain drain” that weakens local economies. Yet for those who stay—or return later—their impact is outsized, driving new business formation, civic leadership, and generational stability.

    Example: Goshen College and Elkhart County, Indiana — A Model of Mutual Benefit

    The following example illustrates the positive interdependence of a small college and its surrounding community—how shared growth, service, and opportunity can strengthen both the institution and the region it calls home.

    Few examples better demonstrate this relationship than Goshen College in northern Indiana. Founded in 1894 by the Mennonite Church, Goshen sits in Elkhart County, a region best known for its manufacturing and recreational vehicle industries. While the area has long been an economic hub, its continued success depends heavily on education and workforce development—both areas where Goshen College has quietly excelled for more than a century.

    Goshen employs more than 300 full-time and part-time faculty and staff, making it one of the city’s largest private employers. Its local purchasing—from food services to maintenance and printing—injects millions of dollars annually into the county’s economy. The student body, drawn from across the Midwest and around the world, supports rental housing, restaurants, and small businesses throughout the region.

    According to the 2024 Independent Colleges of Indiana Economic Impact Study, Goshen College contributes roughly $33 million each year to the regional economy through employment, operations, and visitor spending. Beyond the numbers, the college enriches community life. The Goshen College Music Center and Merry Lea Environmental Learning Center are regional treasures, hosting performances, lectures, and research programs that attract thousands of visitors annually. During the COVID-19 pandemic, the college partnered with local health officials to serve as a testing and vaccination site—further demonstrating its civic commitment. Its nursing, environmental studies, and teacher preparation programs continue to meet critical workforce needs across Elkhart County and beyond.

    Goshen College stands as a model of how a small private college and its community can thrive together. Its example underscores a broader truth: when rural colleges remain strong, the benefits extend far beyond campus—bolstering jobs, sustaining income, and enriching the civic and cultural life that define their regions.

    Social and Cultural Role: The Heart of Civic Life

    Beyond numbers, the social and cultural influence of rural colleges may be their most irreplaceable contribution. In many counties, the college auditorium doubles as the performing arts center, the gym as the public gathering space, and the library as a community hub.

    Rural colleges host art shows, festivals, lectures, and athletics that bring people together across generations. They sponsor service projects, tutoring programs, and food drives that connect students with their neighbors. For residents who might otherwise feel isolated or overlooked, the local college provides a sense of belonging and civic pride.

    Research from the National Endowment for the Arts underscores that local arts participation strengthens community bonds and well-being. Rural colleges amplify that effect by providing both venues and expertise. Their faculty often lead community theater, music ensembles, or public workshops—bringing culture to places that might otherwise lack access.

    The COVID-19 pandemic vividly demonstrated this social bond. While large universities shifted to remote learning with relative ease, small rural colleges had to improvise with limited broadband access and fewer resources. Yet many became essential service providers—hosting testing centers, distributing food, and maintaining human contact in otherwise isolated communities.

    In these moments, small colleges revealed what they have always been: not just educators, but neighbors and caretakers.

    Challenges: Fragility and the Risk of Decline

    Despite their immense value, small rural colleges operate under fragile conditions. Their scale limits efficiency, their funding sources are volatile, and demographic shifts threaten their enrollment base.

    Enrollment Declines and Demographic Pressures.

    A steep decline in traditional-age students is projected to start by 2026, with the number of new high school graduates expected to fall by about 13 percent by 2041, according to The Chronicle of Higher Education, March 3, 2025, article “What is the Demographic Cliff”. For rural colleges already competing for a shrinking pool of students, this decline threatens their enrollment base and financial viability. Many have already experienced double-digit enrollment drops since the Great Recession. Rural public bachelor’s/master’s institutions enroll 5% fewer students today than in 2005, while community colleges struggle to recover from pandemic-era losses.

    Financial Constraints.
    Small colleges rely heavily on tuition revenue and relatively modest endowments. According to the Urban Institute, the median private nonprofit four-year college holds about $33,000 in endowment assets per student, compared with hundreds of thousands of dollars per student at elite universities such as Amherst or Princeton. For many rural private colleges, endowment resources are often well below this national median. Their financial models depend heavily on tuition and auxiliary income, leaving them vulnerable when enrollment softens. Fundraising capacity is also limited: alumni bases are smaller and often less affluent than those of major research universities, making sustained growth in endowment and annual giving more difficult to achieve.

    Operational Challenges.
    Compliance, accreditation, and technology costs weigh disproportionately on small staffs. Many rural colleges lack the personnel to pursue major grants or expand programs quickly. Geographic isolation compounds difficulties in recruiting faculty and attracting external partnerships.

    Brain Drain and Opportunity Gaps.
    Even when colleges succeed in educating local students, retaining them can be difficult. Many leave for urban areas with higher wages and broader opportunities. The irony is painful: the better a rural college fulfills its mission of empowerment, the more likely it may lose its graduates.

    Closures and Community Fallout.
    When a small college shuts its doors, the ripple effects are severe. Studies estimate average regional losses of over $20 million in GDP and hundreds of jobs per closure. Local businesses—cafés, landlords, bookstores—suffer immediately. Housing markets soften, municipal tax revenues drop, and cultural life diminishes. It can take a decade or more for a community to recover, if it ever does.

    Reversing the Talent Flow: Retention Strategies That Work

    The brain drain challenge is not insurmountable. Several states and institutions have pioneered retention strategies that show measurable results.

    Loan forgiveness programs specifically targeting rural retention have gained traction. Kansas’s Rural Opportunity Zones offer up to $15,000 in student loan repayment for graduates who relocate to designated counties. Maine provides annual tax credits up to $2,500 for graduates who live and work in-state. Early data suggests these programs can shift settlement patterns, particularly in high-demand fields like nursing and teaching.

    The most effective models involve tri-party partnerships: colleges provide education and career counseling, employers offer competitive wages and loan assistance, and municipalities contribute housing support or tax relief. In one Ohio example, a regional hospital, community college, and county government created a “stay local” nursing pathway that reduced turnover by 40% over five years.

    Place-based scholarships are also emerging as retention tools. “Hometown Scholarships” provide enhanced aid for students from surrounding counties who commit to working regionally after graduation. When paired with community-engaged learning and local internships throughout the curriculum, these programs cultivate regional identity—shifting the narrative from “I have to leave to succeed” to “I can build a meaningful career here.”

    Federal policy could amplify these efforts. A Rural Talent Corps modeled on the National Health Service Corps could leverage student loan forgiveness to address workforce shortages while stabilizing rural economies. The brain drain will never disappear entirely, but intentional investment can shift the calculus from inevitable loss to manageable flow.

    Policy Pathways and Strategies for Resilience

    Sustaining small colleges—and the communities they support—requires creativity, collaboration, and policy attention.

    1. Deepen Local Partnerships.
    Rural colleges thrive when they align closely with regional needs. Employer partnerships, dual-enrollment programs, and apprenticeships can connect education directly to local labor markets. In Indiana and Ohio, several colleges now co-design health care and manufacturing programs with regional employers, ensuring steady pipelines of skilled workers.

    2. Form Regional Alliances.
    Small institutions can collaborate rather than compete. Shared academic programs, cross-registration, and joint purchasing agreements can reduce costs and expand offerings. Examples such as the New England Small College Innovation Consortium show how collective action can extend capacity and visibility.

    3. Diversify Revenue and Mission.
    Rural colleges can strengthen financial resilience by expanding adult education, microcredentials, and workforce training. Many are converting underused buildings into community hubs, co-working spaces, or conference centers. Others are developing online and hybrid programs to reach place-bound learners in neighboring counties.

    4. Increase State and Federal Support.
    Federal recognition of Rural-Serving Institutions within the Higher Education Act could unlock targeted funding similar to programs for Minority-Serving Institutions. States should adapt funding formulas to reflect mission-based outcomes—rewarding colleges that serve low-income, first-generation, and local students rather than penalizing them for small scale.

    5. Encourage Philanthropic Investment.
    Foundations and donors have historically overlooked rural institutions in favor of urban flagships. Increasing awareness of their impact could mobilize new giving streams, particularly from community foundations and regional philanthropists.

    6. Invest in Infrastructure.
    Broadband access, housing, and transportation are essential to sustaining rural higher education. Expanding digital infrastructure allows colleges to deliver online learning, attract remote faculty, and connect to global markets.

    Looking Ahead: The Role of Small Colleges in Rural Renewal

    As rural America seeks to reinvent itself in the 21st century, small colleges are uniquely positioned to lead that renewal. They combine local trust with national expertise, and they possess the physical, intellectual, and moral infrastructure to drive change from within.

    Their future will depend on adaptability. Colleges that align programs with regional industries, embrace digital learning, and form strategic alliances can thrive despite demographic headwinds. Institutions that cling to older models may struggle.

    Yet the measure of success should not be enrollment size alone. A rural college’s value lies in its multiplier effect—on jobs, community life, and civic identity. For many counties, it is the last remaining institution still rooted in the public good.

    Conclusion: Investing in Irreplaceable Infrastructure

    Small colleges in rural America are far more than schools. They are community builders, employers, cultural anchors, and symbols of local resilience. Their closure can hollow out a county; their success can revive one.

    The rural-serving institutions identified by ARRC represent a quarter of U.S. enrollments but touch nearly half the nation’s geography. They serve regions facing population loss, persistent poverty, and limited opportunity—yet they continue to educate, employ, and inspire.

    The choice facing policymakers, philanthropists, and citizens is simple: either we invest in these engines of opportunity, or we risk watching the lights go out in hundreds of rural towns.

    The question is no longer whether we can afford to support small rural colleges but whether America can afford not to.

    Sources and References

    • Alliance for Research on Regional Colleges (ARRC). Identifying Rural-Serving Institutions in the United States (2022).
    • Brookings Institution. The Value of Higher Education to Local Economies (2021).
    • Federal Reserve Bank of Richmond. Community Colleges as Anchor Institutions: A Regional Development Perspective (2020).
    • National Student Clearinghouse Research Center. High School Benchmarks 2022: National College Progression Rates.
    • National Endowment for the Arts. Rural Arts, Design, and Innovation in America (2017).
    • Lumina Foundation. Stronger Nation: Learning Beyond High School Builds American Talent (2024).
    • National Skills Coalition. Building a Skilled Workforce for Rural America (2021).
    • IMPLAN Group, LLC. Measuring the Economic Impact of Higher Education Institutions (2023).
    • U.S. Census Bureau. Educational Attainment in the United States: 2023 (American Community Survey Tables).
    • Bureau of Labor Statistics. Employment and Earnings by Educational Attainment, 2023.
    • Goshen College. Economic Impact Report 2022 and institutional data from the Office of Institutional Research.

    Dean Hoke is Managing Partner of Edu Alliance Group, a higher education consultancy, and a Senior Fellow for the Sagamore Institute located in Indianapolis, Indiana. He formerly served as President/CEO of the American Association of University Administrators (AAUA). Dean is a champion for small colleges in the US. and is committed to celebrating their successes, highlighting their distinctions and reinforcing how important they are to the higher education ecosystem in the US. Dean is the creator and co-host for the podcast series Small College America.

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  • Economic Uncertainty Spurred Campus Cuts in September

    Economic Uncertainty Spurred Campus Cuts in September

    Judging from the widespread job and program cuts announced last month, higher education continues to face economic uncertainty on multiple fronts, from declining enrollment to federal funding issues.

    September saw layoffs, program cuts and other budget moves at a mix of institutions. While some of the institutions listed below are regional universities battered by declining enrollment, others are among the nation’s wealthiest; they pointed to federal research funding cuts, soaring endowment taxes and other factors as the impetus for recent cutbacks.

    Here’s a look at cost-cutting measures announced across the higher ed sector last month.

    Washington University in St. Louis

    One of the nation’s wealthiest universities is laying off hundreds of employees.

    WashU chancellor Andrew Martin announced last month that the private university had cut 316 staff positions and closed another 198 vacant roles as part of an effort to restructure or reduce budgets. He wrote that the cuts, which extend to WashU’s Medical Campus, total “more than $52 million in annual savings.”

    The chancellor cited both external and internal pressures.

    “These include the changing needs of our students, emerging technologies, and innovations in teaching and learning,” Martin wrote. “Others come from internal decisions and structures that have, over time, created ineffective processes and redundancies in the way we operate. In addition, we’re still facing significant uncertainty about potentially drastic reductions in federal research funding.”

    Uncertainty over federal research funding looms even as the university has lobbied heavily on Capitol Hill. Among individual institutions, WashU has been one of the top spenders on higher education lobbying this year, pumping $540,000 into those efforts across the first two quarters. (Third-quarter lobbying numbers are not yet available.)

    Despite a $12 billion endowment, WashU follows well-resourced peers, including Johns Hopkins, Northwestern and Stanford Universities, in enacting steep layoffs.

    Brown University

    Squeezed by a budget deficit and reeling from a battle with the Trump administration over allegations of antisemitism that included a temporary federal research funding freeze and ended with the university making concessions, Brown is laying off 48 employees and axing 55 vacant jobs.

    The cost-cutting measure comes after the Ivy League institution in Rhode Island already eliminated “approximately 90 mostly vacant positions” earlier this year, according to an announcement from senior administrators. Following the cuts, Brown is walking back freezes on hiring, travel and discretionary spending.

    Officials announced they plan to monetize “non-strategic real estate holdings” and pause “spending on plans to move the University to net-zero emissions,” among other efforts, including “prioritizing fundraising for current-use gifts that have an immediate positive budgetary impact.”

    Brown is among the nation’s wealthiest universities, with an endowment valued at $7.2 billion.

    University of Oregon

    Grappling with a budget deficit of more than $25 million, the public flagship announced plans to lay off 60 employees and close another 59 vacant positions, The Oregonian reported.

    The move comes after the university cut dozens of jobs earlier this year.

    “Through careful consultation with deans, department heads and the University Senate, we were able to substantially close our budget deficit without eliminating any degree programs,” UO senior officials wrote last month. “And while we are cutting 20 filled career faculty positions and 14 unfilled tenure track faculty positions, we are not eliminating any filled tenure track faculty positions.”

    Berklee College of Music

    College leaders cited “rising costs, a dynamic enrollment environment, and shifting national policies” in announcing the layoffs of 70 employees at the storied music school last month.

    The layoffs reportedly amount to 3 percent of the Berklee College of Music workforce and include employees on campuses in Massachusetts, New York and Spain, according to Boston.com. Of the 70 employees laid off, all were staff members and no faculty jobs were cut.

    Southern Oregon University

    After declaring financial exigency in July, officials finalized a plan at the public university in Ashland to cut $10 million in operating costs over four years, Jefferson Public Radio reported.

    The cuts will reportedly affect 70 faculty and staff jobs, though not all are currently filled. In addition to layoffs and the elimination of vacant jobs, the university also plans to scale back programs by cutting 10 majors—including chemistry and mathematics—and dropping a dozen minors.

    University of Arizona

    The public university in Tucson is cutting 43 jobs after Congress eliminated funding for the Supplemental Nutrition Assistance Program, The Arizona Daily Star reported.

    The program, known as SNAP-Ed for short, was removed from the federal budget earlier this year. Termination of the program cut off about $6 million in annual funds to the university to provide education-related services, faculty members told the newspaper.

    Arizona’s job cuts come as the university recently managed to zero out a $177 million deficit that administrators discovered in late 2023, which prompted sweeping cost-cutting measures.

    University of Louisiana at Lafayette

    The public university eliminated six jobs and closed the Office of Sustainability and Community Engagement last month as it navigates a $25 million deficit, The Acadiana Advocate reported.

    Other offices were restructured.

    The newspaper reported that officials have already identified $15 million in cuts to help close the deficit. Most divisions across the university will be required to reduce operational expenses by 10 percent.

    Cuyahoga Community College

    Following other public institutions in Ohio, CCC is axing 30 associate degree programs in low-enrollment areas, as mandated by Senate Bill 1, which the State Legislature passed earlier this year, Signal Cleveland reported.

    The cuts, announced last month, include a mix of programs ranging from advanced manufacturing to creative arts. Multiple apprenticeship programs are also being shut down.

    East Carolina University

    Officials at the public university in Greenville announced plans last month to cut $25 million from the budget amid declining enrollment and other factors, The Triangle Business Journal reported.

    Belt-tightening measures will be implemented over three years and will include “permanent reductions, academic program optimization, and organizational adjustments,” ECU officials announced last month. Administrators did not specify the number of potential layoffs ahead.

    Yale University

    Increased taxes and federal funding uncertainty are driving cost-cutting measures at the Ivy League university in Connecticut, where officials last month announced retirement incentives to eligible faculty as the university braces for an 8 percent tax on endowment income.

    Yale is one of the few universities with a multibillion-dollar endowment that will feel the tax at its highest level. The increase is a significant jump from the prior endowment tax of 1.4 percent.

    The university is also delaying major construction projects, among other money-saving moves.

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  • Jennifer Westacott on economic roundtable – Campus Review

    Jennifer Westacott on economic roundtable – Campus Review

    Universities should offer shorter, cheaper and more accessible courses that recognise prior learning to help boost Australia’s productivity, Canberra’s economic roundtable has agreed.

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  • A Loss for Independent Economic Accountability

    A Loss for Independent Economic Accountability

    The sudden disappearance of updated economic series from ShadowStats.com in late 2023 represents a significant loss for those seeking alternative metrics on inflation, unemployment, GDP, and money supply. For nearly two decades, John Williams offered alternative calculations using older methodologies—like pre-1997 CPI and the pre-1993 U-6 unemployment series—that pushed back against official narratives from Washington.

    As of mid-2023, Williams had announced server transitions and communication delays. But since then, there have been no new numbers. The ShadowStats homepage now feels like a ghost town—quiet in a moment when alternative data is arguably more vital than ever.

    A Counterpoint to Politicized Official Data

    In early August 2025, President Donald Trump fired Erika McEntarfer, the Biden-appointed Commissioner of the Bureau of Labor Statistics, following a disappointing July jobs report and significant downward revisions to previous months. McEntarfer was accused, without evidence, of manipulating the numbers. The move alarmed economists across the political spectrum and cast new doubts on the independence of federal data reporting.

    ShadowStats long operated in this shadowy realm—challenging official statistics not just for technical flaws but for what Williams saw as systemic obfuscation. Critics often scoffed at his high inflation numbers and methodology, but many respected the necessity of an outsider audit, especially as trust in federal institutions wanes.

    Now, with McEntarfer gone and the BLS under renewed political pressure, the absence of ShadowStats leaves a void for watchdogs, skeptics, and independent researchers. Whatever one thought of Williams’ conclusions, his presence forced a more honest conversation.

    Independent Scrutiny, Silenced

    ShadowStats wasn’t perfect. Economists questioned its internal consistency, and some warned that it exaggerated inflation by double-counting or overestimating price pressures. But Williams’ work was never meant to replace the BLS—it existed to question it. Without that challenge, what’s left?

    The timing of the silence is especially troubling. As jobs reports become politicized, as inflation is gamed to manage perception and investor sentiment, as federal agencies come under threat of dissolution or reorganization, the independent mirrors held up to power are fading.

    And make no mistake: even flawed mirrors can reflect uncomfortable truths.

    Where Do We Go from Here?

    The disappearance of ShadowStats doesn’t just affect monetary theorists or Austrian school economists. It matters to ordinary Americans who sense that the numbers don’t match their lived experiences—at the pump, in the grocery store, in their paychecks. It matters to working-class families whose struggles are minimized by rosy job reports. And it matters to journalists, educators, and activists who rely on independent data to inform the public honestly.

    If ShadowStats doesn’t return, its legacy will still endure as a case study in resistance—however imperfect—against technocratic opacity. But the need for independent, adversarial data has not gone away. It’s only grown louder.

    We shouldn’t have to wait for another fired statistician—or another economic crisis—to demand better numbers and more transparency. The silence of ShadowStats should be a warning. Independent oversight must be rebuilt, or we’ll be flying blind into the next storm.

    Sources:

    • Shadow Government Statistics, John Williams. www.shadowstats.com

    • Washington Post, August 1, 2025. “Trump fires BLS chief after weak jobs report.”

    • New York Magazine, August 2, 2025. “Trump’s Firing of the BLS Commissioner Is Bound to Backfire.”

    • Business Insider, August 2, 2025. “Why the market is shrugging off Trump’s firing of the BLS chief.”

    • Wikipedia: Shadowstats.com. https://en.wikipedia.org/wiki/Shadowstats.com

    • Moneyness blog by JP Koning. “Cross-checking ShadowStats.”

    • MarketWatch, August 3, 2025. “There’s no sure cure for what ails the U.S. jobs report.”

    • AP News, August 1, 2025. “Economists warn BLS independence at risk after Trump ousts chief.”

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  • Civic engagement offers a firm foundation for universities contributing to regional economic growth agendas

    Civic engagement offers a firm foundation for universities contributing to regional economic growth agendas

    When searching for friendly support or warm words from politicians, the media, and the public, UK universities are increasingly being left empty-handed.

    Last year’s modest increase in tuition fees allowed universities a temporary reprieve after years of tightening financial constraints but came with a firm warning that standards must improve and was quickly wiped out by rises in National Insurance. Meanwhile, culture wars and negative perceptions on quality and graduate outcomes continue to dominate discourse around the sector, fuelling criticism of universities from all directions.

    Richard Jones, vice president for regional innovation and civic engagement at the University of Manchester posited last week that university leaders may be tempted to look for easy savings in their civic impact work – initiatives that engage with and benefit their local community but ultimately fall outside of a university’s traditional mission of teaching and research. But as he argues, this would be a profound mistake.

    The outlook in recent years for universities may have been challenging, but hope lies in Labour’s focus on place-based policy. Place has driven flagship funding decisions and policies including the Spending Review and the Industrial Strategy, with more money being devolved from Whitehall to the regions in pursuit of growth. New Mayoral Strategic Authorities have been empowered to take the reins on transport, investment, spatial planning and skills, with the promise of further autonomy as they mature. A new Green Book – government’s methodology for assessing public investments – is being updated and will broaden the criteria to look more favourably at investments outside London and the South East.

    Universities are perfectly placed to be the drivers of Labour’s regional growth ambitions. The priority sectors in last week’s Industrial Strategy – including advanced manufacturing, life sciences, and clean energy industries – are some of UK universities’ best strengths. Moreover, as anchor institutions located in the heart of communities, universities are physically well-placed to address causes of economic decline.

    Civic engagement for economic growth

    The civic university movement, which champions collaboration between universities and their localities, has an established framework for institutions looking to ramp up civic impact initiatives with their civic university agreements. More than 70 civic university agreements are already in place between universities and their local authorities, with universities in Manchester, Nottingham, Sheffield, Exeter, Derby and London, among others, providing a range of examples for institutions to learn from.

    A UPP Foundation series of roundtables held in four regions across England recently has also highlighted that the civic university movement remains active, with a wealth of civic activity taking place across the country. Universities are finding creative ways to engage with their local communities, with examples including offering to host events in university spaces, or running a café that demystifies the benefits of nuclear energy while providing employment and training for local people. For institutions nervous about signing up to lengthy and potentially costly partnerships, participants at the roundtables instead stressed that smaller gestures can be just as meaningful. Rather than draining resources, civic activity can in fact alleviate funding pressures when universities work together to learn from one another.

    Irrespective of geography, participants were united in their contention that universities should collaborate with their local partners to develop civic initiatives, working collaboratively to address the real day-to-day problems communities want help with, such as helping local businesses transition to net zero.

    Labour’s devolution agenda also offers an opportunity for universities to become visible bridges working across regions and political geographies. While mayoral devolution has been lauded in cohesive urban centres like Manchester and Birmingham, there are concerns the model will work less well in rural areas where proposed Mayoral Combined Authorities will intersect with traditional county borders. For such regions, universities can both serve as bolsters to wider regional identity and can benefit from the flexibility of their own geography that may span mayoral regions.

    The opportunities are there for universities to re-embed civic activity into their core work under Labour’s agenda – but it needs brave leadership to embrace them. In the face of tough financial decisions, university leaders must champion the benefits of civic activity. The late Bob Kerslake, chair of the UPP Foundation’s Civic University Commission 2018–19, deeply understood the potential and necessity for universities to be rooted in their local communities. For a higher education sector that has spent recent years on uncertain footing, tapping into Kerslake’s vision could provide a more certain path forward.

    The UPP Foundation’s full report UPP Foundation Spring 2025 Roundtables: The Role of Universities in Regional Placemaking explores the key themes of the roundtable discussions. You can download the report here.

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  • McDonald’s Faces National Boycott as Economic Justice Movement Builds Momentum

    McDonald’s Faces National Boycott as Economic Justice Movement Builds Momentum

    McDonald’s, the fast-food titan with global reach and billion-dollar profits, is the latest corporate target in an escalating campaign of economic resistance. Starting June 24, grassroots advocacy organization The People’s Union USA has called for a weeklong boycott of the chain, citing the need for “corporate accountability, real justice for the working class, and economic fairness.”

    Branded the Economic Blackout Tour, the campaign seeks to channel consumer power into political and structural change. According to The People’s Union USA, Americans are urged to avoid not only McDonald’s restaurants but also fast food in general during the June 24–30 protest window. Previous actions have focused on companies like Walmart, Amazon, and Target—corporate behemoths long criticized for their low wages, union-busting tactics, and monopolistic behavior.

    John Schwarz, founder of The People’s Union USA, has emerged as a vocal critic of corporate greed. In a recent video statement, Schwarz accused McDonald’s and its peers of dodging taxes and lobbying against wage increases. “Economic resistance is working,” he declared. “They’re feeling it. They’re talking about it.”

    The movement is tapping into deep and widespread frustration—fueled by stagnant wages, rising living costs, and mounting corporate profits. While many Americans struggle with student loan debt, inadequate healthcare, and job insecurity, companies like McDonald’s have been accused of shielding their profits offshore and benefiting from political influence in Washington.

    This is not the first time McDonald’s has come under fire. The company has faced criticism from labor rights groups for paying low wages, offering unpredictable schedules, and relying heavily on part-time or precarious employment. More recently, pro-Palestinian activists have also launched boycotts, citing alleged ties between McDonald’s franchises and Israeli military actions in Gaza.

    As part of the current boycott, The People’s Union USA is pushing for a broader shift in spending—away from multinational corporations and toward local businesses and cooperatives. In line with previous actions, the group is also encouraging Americans to cut back on streaming, online shopping, and all fast-food purchases during the boycott period.

    With Independence Day on the horizon, Schwarz and his allies are framing the protest as not just economic, but patriotic. “It’s time to demand fairness,” Schwarz said, “and to use our economic power as leverage to fight for real freedom—the kind that includes fair wages, democratic workplaces, and tax justice.”

    While McDonald’s has not released an official response to the boycott, a 2019 letter from company lobbyist Genna Gent suggested the chain would not actively oppose federal minimum wage increases. For Schwarz and his supporters, such declarations ring hollow without meaningful action.

    The July target for The People’s Union USA? Starbucks, Amazon, and Home Depot—three more corporate giants with long histories of labor disputes and political entanglements. The next wave of boycotts will extend throughout the entire month, further testing the staying power and impact of this new consumer-led resistance.

    At a time when higher education, particularly the for-profit and online sectors, often channels students into low-wage service jobs with crushing debt, these campaigns raise larger questions about the role of universities in perpetuating corporate power and economic inequality.

    The Higher Education Inquirer will continue to follow these developments, especially as they intersect with issues of labor, student debt, corporate influence, and the broader fight for economic justice in the United States.

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  • Universities should be architects of economic and social transformation

    Universities should be architects of economic and social transformation

    Britain’s universities stand at a critical juncture.

    The traditional funding model faces unprecedented pressure as costs spiral and resources dwindle, while successive government policy reversals on international students and graduate visas have created a destabilising environment.

    These converging forces threaten the very foundations of our higher education system.

    Simultaneously, Education Secretary Bridget Phillipson is challenging universities to deliver more with less – driving economic growth and enhancing student outcomes amidst severe financial constraints. The message is unambiguous – transformation is no longer optional.

    The uncomfortable reality is that with public funding constraints tightening and international income streams becoming increasingly unpredictable, universities can no longer sustain outdated operational models.

    To survive and thrive in this challenging landscape, institutions must fundamentally reimagine their approach – aligning their educational offerings with national priorities and market needs, adopting innovative commercial service models, and leveraging emerging technologies at scale.

    Pioneering a new paradigm

    Aston University’s recent report, Pathways to Success, provides a compelling blueprint for institutional evolution in response to these pressures. By transforming into a more agile, resilient, and globally connected institution, Aston has prioritised both student success and tangible socio-economic impact.

    This strategic pivot beyond traditional funding sources toward a partnership-driven approach has already generated over £1 billion for the regional and national economy, with ambitious plans to double this impact by 2030.

    Today’s most effective universities function as anchor institutions within vibrant innovation ecosystems. The Birmingham Innovation Precinct exemplifies this approach, seamlessly integrating innovative research, commercial ventures, and community development.

    Aston has expanded this concept with its “city within a city” model — a dynamic urban environment featuring public spaces, start-up accelerators, business incubators, community maker spaces, and comprehensive residential, health and recreational facilities.

    This integrated ecosystem drives placemaking and productivity through collaborative place-based innovation.

    Across Britain’s post-industrial cities, such innovation districts are becoming powerful engines of regional economic renewal. Aston’s focus on talent retention has resulted in approximately 70 per cent of graduates remaining in the West Midlands, providing essential high-level skills to local industries for the long run.

    This retention significantly enhances economic resilience, while the university’s three-year support scheme after graduation ensures sustained impact through graduate success.

    The university has constructed a comprehensive innovation ecosystem that accelerates research commercialisation, featuring the Aston Knowledge Transfer Partnership Unit, Aston Business Hub, Enterprise Hub, and Aston University Ventures, as well as a portfolio of partnered accelerators such as SPARK The Midlands Accelerator.

    Collaborative efforts with other institutions through the Midlands Innovation consortium and its investment arm Midlands Mindforge, alongside large-scale research commercialisation projects funded by Research England and Innovate UK, further amplify this impact.

    The results speak for themselves – KTP projects are projected to generate £266 million in pre-tax profit for partner companies and create 541 new jobs within three years, with participating companies achieving an average 1,107% return on investment.

    The quadruple helix: A new framework for innovation

    Forward-thinking institutions are increasingly adopting the “quadruple helix” model — an innovation framework that integrates academia, industry, government, and society.

    This approach has transformed our stakeholder engagement, focusing efforts on health technology, net zero initiatives, digital and engineering technologies, and biological sciences — areas aligned with national priorities and offering substantial employment opportunities.

    We demonstrate leadership in sustainability, on track to achieve net-zero carbon emissions by 2028, becoming the first university in the region to achieve this milestone, supported by a £35.5 million investment through the UK Public Sector Decarbonisation Scheme.

    We have also secured funding to establish the first national Transdisciplinary Research Hub and Doctoral Training Centre, enabling and supporting decarbonisation projects across vast networks of businesses and healthcare providers throughout the West Midlands.

    Those who fear that commercialisation threatens academic independence misinterpret this model. Robust governance frameworks protect intellectual integrity while facilitating meaningful partnerships that enhance rather than compromise research excellence through measurable impact.

    However, widespread adoption of this approach faces significant obstacles, particularly outdated performance metrics that continue to prioritise publication counts and academic citations over student outcomes and real-world impact.

    The forthcoming sector reforms must address these antiquated incentive structures if Britain is to maintain global economic competitiveness.

    Building a sustainable innovation pipeline

    The project-based funding model that dominates British research support creates chronic uncertainty, undermining long-term planning and investment.

    What we urgently need are strategic, decade-long commitments that provide the stability necessary for substantial infrastructure development and deep industry collaboration.

    The government’s forthcoming 10-year R&D budget must prioritise strengthening university-business collaboration. Only through such sustained investment can Britain cultivate the robust innovation pipeline essential for economic revitalisation.

    Universities must simultaneously align their educational offerings with evolving market needs for advanced skills.

    While the government’s focus on skill levels 1-5 is important, it remains insufficient. High-value sectors — artificial intelligence, advanced digital technologies, advanced manufacturing, and medical technology — require sophisticated capabilities that can only be effectively developed at scale through university-industry collaboration.

    University-led programmes, co-designed with industry partners, can deliver intensive training in these critical domains through more agile, flexible, digitally enabled learning approaches.

    The corporate challenge

    We must confront an uncomfortable truth: the firewall between industry and education is rapidly vanishing. Global technology giants, such as Google, Amazon, Microsoft, IBM, and Siemens, are already among the world’s largest training providers.

    Before long, they will either embed their programmes inside universities or create rival institutions that funnel graduates directly into high-value jobs. Students will inevitably gravitate toward whichever pathway offers the strongest prospects for employability and rapid career progression.

    The response must be proactive rather than defensive. Universities should forge strategic partnerships with businesses, policymakers, and private education providers to develop flexible, omni-channel learning models that integrate traditional campus experiences with industry-embedded learning opportunities, supported by sophisticated digital delivery platforms.

    For centuries, British universities have been intellectual powerhouses shaping minds and advancing knowledge. But the future of our higher education system now depends on a fundamental mindset shift.

    Institutions must become more commercially astute and globally connected, while remaining deeply rooted in their communities where their civic mission finds its most powerful expression.

    We must embrace industry and community like never before. That means forging strategic partnerships, embracing commercial imperatives, and converting research and skills into measurable socio-economic benefits.

    We can no longer rely solely on our storied academic traditions. If British universities are to thrive in the twenty-first century, they must transform and become active architects of economic and social transformation — or risk fading into obsolescence as relics of a bygone age.

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  • The economic cost of an unequal R&D workforce

    The economic cost of an unequal R&D workforce

    The argument for investment in R&D goes as follows.

    The more innovative an economy is the greater level of economic output it will produce. The more output an economy produces the wealthier a country will be and by extension its citizens will enjoy higher wages, better public services, and a greater quality of life.

    Innovation is dependent on two things. The first is the infrastructure to make innovation happen. The great universities, laboratories, equipment, and less prosaically the roads, broadband, and public transport, that facilitate the physical transfer of ideas. The second is human capital. The educated workforce that can turn the raw materials of our collective knowledge into new products and services which make the economy strong and society better.

    The ideal scenario has two major assumptions. The first is that the products of innovation will be widely felt in the economy to spur economic growth and these benefits will be felt by the workers who are not taking part in R&D intensive activities. In other words, private activities have a spill over benefit to the public at large. The second is that human capital will be allocated efficiently where the best people to do R&D will be placed in the best roles and the market will reward them for their time.

    This means that work in R&D should return higher wages through the input (people’s labour) and through its output (a more productive economy.) A new independent report for DSIT has raised questions on whether the benefits of R&D are felt evenly either by its producers or the population at large.

    Skill issue

    As the report highlights there is little empirical evidence on the kind of R&D workforce the UK needs. The evidence of which kinds of people in which kinds of roles will spur which kinds of R&D activity is poorly understood across geographies, it is poorly understood which specific skills are needed, and it is poorly understood which skills are needed to meet the R&D challenges of the future.

    This is surprising when we learn that 56 per cent of all business R&D spend is spent on staff and the number of people working in roles essential for R&D activity has grown by over a million in the past eleven years. Owing to changes in R&D accounting methodology it’s hard to suggest whether R&D activity or spending intensity has increased at the same rate. It is however true that there are regional imbalances in R&D spending, R&D intensive roles generally pay more, and despite an increase in the R&D workforce the UK’s overall productivity levels remains frustrating low.

    Successive government industrial strategies, incentives, and supply-side reforms, aimed at any kind of redistribution of the proceeds of R&D activity may not have been an effective counterweight to the incentives of business to simply invest where they will see the largest private returns.

    Imbalances

    There is a distinct problem that the R&D workforce is imbalanced. Some parts of the R&D economy, particularly roles like software, have an underrepresentation of women, a significant number of people with level four and above qualifications, and growth is rapid in London and the South East. There is both a demographic and geographic equality issue which means the benefits of R&D investment are not broadly felt across the UK population.

    This is bad on its own terms. It is not a good outcome for society that the public investment in R&D through subsidies, tax credits, capital investment, infrastructure, and the myriad of kinds of corporate welfare, is producing a workforce which has gendered earning inequalities amongst even the highest paid R&D workers (albeit this less than some parts of the labour market), where growing investment is concentrated in the most economically prosperous part of the country, and where there is significantly more instability for the least qualified workers.

    As the report points out, academic literature demonstrates that a more diverse workforce is good for economic growth, productivity, innovation, and entrepreneurship. The inequality of inputs limits the UK’s innovation potential, which in turn impacts how widely the benefits of R&D are felt. Compounding this innovation trap is the UK’s poor record at in work training, geographic inequalities in access to jobs, challenges with university pipelines into specific skills, and geographic imbalances in hard to fill vacancies.

    Universities

    The solution to a more dynamic R&D workforce does not fall exclusively at the door of universities. As the report highlights, universities are churning out large numbers of graduates in subjects aligned to the R&D intensive roles. However, there is a significant undermatching in those graduates then being able to deploy their skills in the labour market. There is also a significant gender imbalance in university recruitment into STEM programmes which then leads into the imbalances in the workforce.

    Interviewees for the report also suggested that university CPD for R&D industries could help close skills gaps and redefining their commercial approaches with SMEs could help with the workforce challenges. Yes, but it also doesn’t feel like universities should be responsible for the permanent reskilling of their graduates. Again, in work training in the UK is low.

    The labour market in R&D is the product of every step up to someone entering the workforce and then the conditions once they are in it. At the current trajectory the UK will have an ever large R&D workforce but the expansion in its size will not occur conterminously with a geographic or demographic expansion of its impacts.

    Universities are not factories that churn out graduates with neatly aligned skills to the ever changing demands of the labour market. However, this report does convincingly point out that the UK’s economy benefits from diverse firms and more diverse firms will only happen with more diverse graduates.

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