Investment in university research pays off
27 September 2018 | news
Earlier this year, Universities New Zealand (UNZ) asked Deloitte Access Economics to estimate the impact on New Zealand’s economy of research and innovation in universities.
In a report just released by UNZ, Deloittes found that:
- investment in university research between 1984 and 2015 cumulatively increased real GDP by $129 billion in 2017 dollars over the period
- the contribution of higher education research in New Zealand probably accounted for around $25.9 billion in 2017—8.9% of total GDP
- investment in university research generates a longer-term economic return of around 5.1 to 1—that is $5.10 for each $1.00 invested.
Deloitte calculated these benefits by identifying nationally and internationally the ways that university innovation contributes to economic growth. They found that the contribution was mainly through five overlapping areas:
- Knowledge and ideas that lift innovation and productivity in the firms. In some cases, these ideas are developed by university researchers working directly with firms and in other cases they be ideas that firms find in searches of relevant literature and then build upon.
- Graduates leaving university with ideas and knowledge, and applying these ideas in the firms that employ them or commercialising ideas in companies they start themselves.
- Proximal benefits—ideas and knowledge that spill over thanks to a mix of formal and informal interactions between firms and universities when they are sited close to each other.
- Direct commercial activity—income generated directly by universities through spin-off companies, licensing and patents.
- Policy setting—academic staff contribute to broader government economic, commercial, taxation, education and other policy settings that create a more favourable environment for firms to operate in and that encourage ideas and knowledge to be generated and circulated.
This report also finds that universities’ relationship with industry, the links formed with previous students and the public space they provide, often contribute more to local innovation than direct commercial activity does.
The report concludes that to unlock innovation in New Zealand in the future, it is important for policy-makers, universities and investors to consider focusing on strengthening the contribution of universities to innovation.