Tag: investment

What central banks and universities have in common

Universities have unique responsibilities as powerful institutions that connect communities, decision-makers and the private sector

This post originally appeared on the Yorkshire Universities website. I am delighted to have recently joined Yorkshire Universities as an Associate.

Last month Andy Haldane, Chief Economist at the Bank of England, gave a speech at the University of Sheffield asking if all economics, like politics, is ultimately local. The speech attracted attention for its discussion of whether we can capture and model detailed data on the economy at a far more local level. But there are two other points in the speech worth exploring further.

The first is recognition that higher education, alongside financial services and the creative industries, are sectors that ‘exhibit the highest economic complexity and thus potentially generate the highest value-added’. Economic complexity means the amount of embedded knowledge. Translated into places, a high level of economic complexity means a diverse set of highly-specialised industries, and tends to result in a more prosperous place.

Secondly, Haldane discusses the Bank’s response to the ‘deficit in public understanding and the deficit in public trust’ that central banks are facing. The Bank has responded by rolling out citizens’ panels across the UK, with independent chairs from the local area. Some of this discussion mirrors the public discourse around the role of universities in society, with the flurry of institutions signing Civic University Agreements and reasserting their public missions a reaction to this. The Bank has had a network of 15 regional branches since 1825. Many universities have a long history of civic engagement. There has, however, been a clear need for both to demonstrate this more clearly to those who stand to gain the most in areas which have traditionally been served the least.

Taken together, these two points nicely capture two key roles of universities: generators of knowledge and the economic benefit that can result, and shapers of place and society. I make this point in a recent report for the British Council, noting that these two roles are significant because they challenge different ends of the traditional university mission: research and the so-called ‘third mission’ of economic and social engagement. The report looked at universities and the development of ‘smart’ cities across Europe, concluding that work between universities and city hall often draws on both of these missions, which prove to overlap and reinforce each other. The urgent calls for universities to ‘do more’ for their place, the challenges that local areas are facing, the strengths that universities have, and the work that they are doing, mean there has never been a better time for universities to build stronger links with their LEP, Combined Authority, and Metro Mayor partners.

When partnerships are missing

A couple of days after my report on universities and smart cities was launched, a smart city project in Toronto hit the headlines for all the wrong reasons. Plans for a Google-affiliated company to redevelop land near the waterfront met with opposition from citizen groups concerned about long-term motives and a lack of transparency. The Canadian Civil Liberties Association is suing three levels of government over its plans to build the smart neighbourhood.

So what went wrong? Clearly a lack of effective citizen consultation – a basic prerequisite for any smart city initiative – is part of the problem. I would also expect any successful project to have at least some involvement of universities. Given the complexity of any widespread urban development scheme, bringing in universities would have been a sensible move (but not a panacea), especially given the excellent work of Toronto’s universities in relation to the development of the city that I’ve explored elsewhere.

Proactive universities

If we take all of this together – the value of higher education to local economies, the need to build trust with people who live in these places, and ambitious regeneration projects that go wrong – we are reminded of the unique position of universities as powerful institutions that can connect communities, decision-makers and the private sector. In this connecting position, with an obligation to support all three but beholden to none, universities have difficult decisions to make. Given limited time and resources, these can require tricky trade-offs.

Often universities contribute to activity in local areas where they are not necessarily obliged to act, but in doing so can add great value. One such area is in place promotion and the attraction of foreign direct investment (FDI). Such activity can boost the prospects of communities and businesses (and increase the economic complexity of a place). It is also essential if we are to meet the government’s target to increase innovation and R&D investment to 2.4 percent of GDP. At Yorkshire Universities we are exploring the role that universities are playing, and the further contribution they can make, to increase trade and FDI in Yorkshire. In doing so, we are reminded again of the crucial dual role universities play, as generators of knowledge and shapers of place.

Photo via Unsplash

Commissions, conferences and the voice of universities

Universities can position themselves as integral to parts of the debate where their inclusion is less obvious

Last week Stephanie Flanders, former BBC economics editor, launched the emerging findings of the RSA Inclusive Growth Commission at the Core Cities summit in London. The Commission follows in the footsteps of the City Growth Commission, which informed much of the previous government’s policy on cities and devolution.

The findings argue that:

As a country we need to put social capital on a par with traditional physical infrastructure when we consider how to invest public resources in future growth. That means treating as investment, policies that are designed to bring poorer people and places up to the level where they can contribute equally to economic growth.

A similar message emerges in the ‘zero draft’ of the New Urban Agenda that will be set out at the major UN Habitat III conference in Quito next month:

We recognize that we must ensure equitable and affordable access to basic physical and social infrastructure for all, including affordable serviced land, housing, energy, water and sanitation, waste disposal, mobility, health, education, and information and communication technologies. We further recognize that provision must be sensitive to the rights and needs of women, children and youth, older persons and persons with disabilities, and other people in vulnerable situations such as refugees, migrants, and displaced persons, removing all legal, institutional, physical, and socio-economic barriers that prevent them from participating equally in urban life and the opportunities it offers.

(For more on why Habitat III is a big deal, see this excellent piece published on The Conversation.)

Many economists and policymakers have long advocated for increased investment in education and other social goods on par with physical infrastructure. The voices of the Inclusive Growth Commission and Habitat III will add weight to these arguments.

However, the beneficiaries of investment in social capital also need to speak up at the major conferences and forums. Bodies such as universities and hospitals can make the case for investment in their facilities, and the economic and social returns this generates. They can also position themselves as integral to other parts of the debate where their inclusion is less obvious, such as provision of public space: a strong case can surely be made for investing in open university campuses designed to bring people and ideas together and share knowledge. When I read these sentences in the New Urban Agenda draft, they seem almost written with universities in mind:

Public spaces, which consist of open areas such as streets, sidewalks, squares, gardens and parks, must be seen as multi-functional areas for social interaction, economic exchange, and cultural expression among a wide diversity of people and should be designed and managed to ensure human development, building peaceful and democratic societies and promoting cultural diversity.

Photo: Panorámica del Centro Histórico de Quito on Flickr