Universities return $66 billion to the Australian public, new research claims

| August 16, 2018

UNSW Sydney Vice-Chancellor and President Professor Ian Jacobs promoted the successes of Australian universities but urged university leaders to more effectively communicate the ways universities contribute to and serve Australian society, in a speech in Canberra on Tuesday.

Speaking at the National Press Club in his capacity as Chair of the Group of Eight (Go8) universities, Professor Jacobs shared the findings of a new London Economics report, The Economic Impact of the Group of Eight Universities.

Professor Jacobs said that in 2016 it cost $12.4 billion to operate the Go8, of which the federal government provided $6.7 billion. The London Economics report, released on Tuesday, found that the work of the Go8 universities delivered a return of over $66 billion to the nation – a 10-fold return on the government’s investment.

In practical terms, the annual return equates to welfare payments for the aged, enough to pay for the government’s entire education budget or entire defence budget or covers twice the cost of Medicare.

“The take-home message is simple – there are few more worthwhile investments in Australia today than higher education,” said Professor Jacobs, who noted the returns came in the areas of research, teaching and learning, educational exports, and direct university spending.

The report found that every dollar of public funding invested in universities for research generated $9.76 across the rest of the Australian economy and every 1000 jobs created in a Go8 university supported more than 2400 jobs throughout Australia.

The report also highlighted the economic contributions of more than 100,000 international students studying at Go8 universities. For every three overseas students studying at a Go8 university, $1 million of economic activity was generated in other parts of the Australian economy. On average, the non-fee expenditure per student during their studies was $51,000 – $8.5 billion for the 2016 cohort. The expenditure supported more than 29,000 jobs.

The report comes a week after Prime Minister Malcolm Turnbull touted the importance of international educationto Australia’s relationships with the Indo-Pacific region, particularly China, during a speech at UNSW.

In that speech, Mr Turnbull said: “Australia’s capacity to capitalise on the opportunities of the Indo-Pacific depends on strong links to the region.”

But for the dynamic impact of the university sector, the work often went unrecognised or was hidden from the view of the Australian public, Professor Jacobs said. He said there was a misperception that universities had failed to adapt to meet contemporary needs.

“There appears to be a lack of understanding of what universities offer our nation socially and economically,” said Professor Jacobs. “We have not taken the community – the taxpayers who fund so much of what we do – along on our journey. We need to improve communication with the community we serve and make the $66 billion annual return from Go8 activity real to the Australian public.”

Professor Jacobs ended his National Press Club address with a “call for significant escalation in business-university collaboration in cooperation with government” to close the gap between discovery and commercialisation. If not, Professor Jacobs warned, Australia would continue to lose commercial opportunities to overseas competitors.

“We need to support the entire research pipeline from discovery, to translation, to application, to commercialisation,” said Professor Jacobs. “The pipeline is crucial to advances which change lives, create jobs, and support a modern 21st century economy.”

Professor Jacobs, who has served as Go8 chair since February, said the group was committed to ensuring Australia maintained its place as one of the most prosperous, advanced and socially responsible countries in the world.

“Our commitment is made as hubs of knowledge and independent thought, as champions of freedom, openness, human rights and justice, as a force for increasing prosperity and equality,” said Professor Jacobs. “We believe universities can serve Australian society in navigating the challenges and opportunities of our age.”

The full Economic Impact of the Group of Eight Universities report is available on the Group of Eight website.