The role of HE in economic development- the RDA perspective on A New University Challenge23rd September 2008Alison Webster

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The East of England - some headlines

• Approx. 5.5 million population• 43% live in rural areas (58% live in communities <

10,000)• No large cities, highest number of market towns in UK• Relatively prosperous at regional level but significant

pockets of deprivation (eg coastal towns)• ODPM growth areas all impact on the region• Population growing 50% faster than UK

Economic context – East of England

Strengths

• Global leading companies and university departments

• 3rd highest business spend on R&D of all European regions

• High economic activity rates

• UK's leading ports

• Inspirational places / some of the UK's finest natural habitats

Challenges

• Intensifying global competition

• Economy dominated by SMEs

• Poor post-16 skill base compared to competitors

• Infrastructure deficit

• Most vulnerable to climate change of all UK regions

• Pockets of deprivation

New RES Vision and headline targets

Vision

“An ideas driven region that is internationally competitive,harnesses the talent of all and is at the forefront of thelow carbon economy.”

Headline targets to 2031• Prosperity & productivity: raise annual growth in GVA

per capita and GVA per employee• Employment: raise employment rate of the over-16 population

• Environment: reduce CO2 emission levels by 60%

Background drivers…….

• Learning Supply– Seven universities and 3 HEIs across six counties– Poor take-up of vocational learning and higher education –

significant ‘cold spots’– Extensive HE delivered through FE– ‘Net exporter’ of graduates at first destination (54%)– 50% HE participation target (set in 2003) unattainable

• Business Demand– Consistent skills shortages at L4, 5 and above– Labour force forecasts – more higher level skills required– Increased in-migration of highly qualified people

Productivity – where are we on GVA ?

Headline GVA per head: Residence Based 2006

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…but don’t be complacent….

Headline GVA per head: Workplace Based 2006

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How are we doing ?

• Leitch Targets by 2020• 40% of adults qualified to L4+

• L3+ - no target– 1,900k additional L3s

– 500k more apprenticeships

• 90% of adults qualified to L2+

England East

25.6% - 2005

28.9% 26.6 % - 2007

England East

47.8% 44.6% - 2007

England East - 2007

55.2% - 2005

68.1% 66.3% - 2007

The workforce & their skills• Highest employment rate in UK at 79.6%

– But uneven spread across region– And dominated by low value added jobs

• Good school performance overall, – But poor take up of vocational skills, and science, technology, engineering and maths (STEM) post- 16

• 70% of skills shortages reported by employers are for skills at level 3 and below– But 30% are higher level skills shortages at level 4 and above– greatest

in management (16%)– Significant skills shortages in our most prosperous areas– And proportion of graduates in the workforce is lower than UK average

except in St Albans and Cambridge

• A low skills equilibrium = low productivity =low GVA

• Future labour demand forecasts changing shape of the workforce– Fewer low/unskilled – Increased technician levels– Increased graduate and post-graduate

• We cannot meet the productivity needs for global competitiveness through new young entrants to the labour market alone.

• Demography suggests that the cohort of young• people moving through FE and HE peaks in 2010.

• Leitch 70% of 2020 workforce already working - Spring 2008 – 74%, and rising.

• We need to drive up workforce learning especially at L3 and L4 if we are to increase productivity

to

The hill to climb

Current Strategy - Genesis

• EEDA RES – HE an issue for regional economy– 54% net outflow

– HE skills shortages

– HE cold spots – linked to economic cold spots

– Population expansion – early growth areas policy

• 50% participation target – PM’s announcement 2003• EEDA/AUEE:

– KPMG undertake review of Universities expansion plans – identify 39,000 shortfall in HE places

• EEDA/AUEE – with HEFCE and universities on potential for HE growth 2003 – 6

• EEDA HE Expansion Strategy to Board September 2006

The new university landscape:

• Does not replace HE delivered through FE, improved and refreshed (Foundation degrees, e-learning etc), alongside FE Capital developments.

• Adds five new ‘branded sites’ in cold spots, aligned to FE Colleges – 25,000 new HE places

• Branded to reach local businesses and learners

• Curriculum specifically tailored for non-traditional students:– Older learners, employed, voluntary/community, businesses

– Strong FD curriculum

Current HE Strategy - Progress• 2006 Strategy outlined five new HE sites, where EEDA

would contribute:– Southend – approved and completed– Suffolk (UCS) – approved/progressing – Phase 1 and LEAPs– Peterborough – approved and almost contracted– Harlow – approved not contracted– Thurrock – developing proposition– Also limited FE support (Lowestoft, WSC, COWA)

• The sites together bring a further 13,500 ftes p.a. to the region (approx 30,000 more students at any time)

• Strong element of non-standard HE – FDs, workforce learning, business engagement.

Why is this important ?• Human Capital

– Improved career options– Improved earning capacity– Reduced tendency for unemployment

• Business Prosperity– Supply of graduates Knowledge transfer to improve products

and processes– R&D and applied research to improve global competitiveness– Spin-outs and Spin-ins

• Local Economy– Attracts new businesses– Percentage of graduates remain in local jobs

10% increase in graduate workforce adds 13% to productivity

What the region gains

• Increased, accessible HE provision for: – Widened and increased participation– Enhanced progression routes to HE provision from FE – Non-standard graduates, employees, businesses engaged

– HE provision designed with local businesses, sector and emerging economic drivers in mind

– Closer links between businesses and HE R&D and applied research for innovation

– Increased graduates in the workforce, increased productivity, improved GVA

Future challenges…

• RDA potential for future co-funding

• Building on and sustaining our investments so far

• Refreshing our HE strategy – it’s not just about places and capital

• Focus on improving FE to HE progression.

• Increasing L4+ skills for those in the workplace

Thank – you for listening

Any questions?

alisonwebster@eeda.org.uk