Universities and industrial strategy in the UK: review of evidence and implications for policy

As producers of human capital, innovation and as large institutions in their own right, UK universities can make important contributions across the five foundations that underpin the government's Industrial Strategy: people, ideas, place, business environment and infrastructure. While few would dispute the potential contribution of universities in all these areas, it is less clear how it can be maximised. The sector has witnessed a number of reforms in recent years and there is much debate about future policy, in particular with respect to its financing, expansion, globalisation and economic impact. This paper provides a synthesis of the relevant data and economic literature, together with implications for policy. To ensure that young people in the UK are able to realise their productive potential it is important to improve the accessibility of the university system for poorer students, and address variability in the quality of teaching (particularly as the sector expands). Financing reforms to date have not harmed accessibility, but a fairer maintenance system together with better information and advice for prospective applicants could help close the participation gap and improve matching of students to courses. Universities are a core part of the UK's innovation infrastructure, but more can be done to improve the commercialisation of research, and the diffusion of existing technologies. Policies in these areas should be designed with evaluation in mind. Finally, UK universities must remain open to talented international students and staff, who make a key contribution to the quality of the sector and its impact.