Prosperity Scotland 2006.pdf - Universities Scotland

•Reduced crimeOne economist summed up this economic impact as follows 9 :“A theory of sorts has been handed down that assumes a linear pathway from university research to commercialinnovation to an ever-expanding network of newly formed companies. This is a naïve and mechanistic view ofthe university’s contribution to economic development. While the university is a key institution of the CreativeEconomy, what’s not so widely understood is the multifaceted role that it plays. It is not there merely to crank outresearch projects that can be spun off into companies…. The presence of a major research university is a basicinfrastructure component of the Creative Economy – more important than the canals, railroads and freewaysystems of past epochs – and a huge potential source of competitive advantage… The Boston high-tech miracle isdue in large measure to MIT. Silicon Valley is unthinkable without Stanford University, its long-time creative hub.”The impact in Scotland is important. There is evidence of clusters being formed around biotech and electronics sectorsin Glasgow, Edinburgh, Dundee and Aberdeen in particular. These clusters have universities as their ‘hub’ and would beunlikely to exist without the university.Figure 10: Location of research centres of excellencerelation ot biotechnologyFigure 11: Location of specialist biotechnology companiesall centresleading biotechnology research universitiesSource: Based on Ernst and Young 1999Part Two: options - comparing economic impactPart One sought to demonstrate and measure the economic impact role of higher education by drawing togetherevidence from existing studies. However, we are of course very well aware that higher education is not the only sector inScotland which has a role to play in economic development. We therefore commissioned new work to put investment inthe economic impact role of higher education in the context of other possible investments.To do this we used an input/output model of the Scottish economy. This is not ideal for measuring the economic impact ofhigher education because it does not measure the secondary effects of higher education investment but only the primaryeffects of higher education as an employer and purchaser. This means that the effect of only one of the five modes ofimpact identified in Part One is captured. Nevertheless, as all existing economic models of the Scottish economy havethis limitation this was the only option.A number of ‘shocks’ were made to the model to see what would happen if extra public investment was made in anumber of different areas for which the Scottish Parliament has responsibility. The options selected were highereducation, health, transport, an income tax cut and a business rate cut. The results are shown in Figure 12.Page 10