I’ve been thinking a lot about universities lately. In part, it’s because I’m part-employed by one – teaching journalism at one of the North East’s five leading institutions alongside my work in the media sector – and in part because my household is a two-income one, reliant on universities for both salaries. (My partner teaches at another of the region’s universities.)
My engagement with my university is largely within the classroom. I try, where possible, to keep out of the more complicated – and dull – institutional and hierarchical conversations.
But at all the universities across the region, and in fact across the country, it’s been hard to avoid the reality of what’s going on in the higher education sector.
Fourteen years of Conservative Party rule – now come to an end – and particularly the last few years of increasingly hostile attitudes towards anyone not born in the UK have had a detrimental effect on the country’s university sector.
In January this year, the government introduced new rules preventing international students from bringing family members into the country, and hiked up salary thresholds to stay after you graduate. Both of these have had the intended effect: immigration has slowed.
But there’s been a perhaps unintended consequence. The university sector has been routed.
Multiple institutions nationally – including those in the North East – have found black holes in their budgets. (They are in some ways theoretical because many of the universities still have massive surpluses, but that’s a topic for another story.)
And so they’ve been trying to cut their cloth more according to current size, offering redundancy packages designed to more equitably balance budgets.
That’s bad news for the tertiary education sector. But this isn’t an academic news website like Wonkhe. It’s UKTN. And it’s here where the problems start for the wider tech sector.
The region’s universities like to crow about the positive impact they have on the region. That’s both on paper – a 2023 report commissioned by the North East’s five universities found unsurprisingly that they contribute £2.2bn annually to the regional economy – and on the ground.
You can’t walk through the centre of Newcastle, for instance, without seeing a university building, one being constructed, or being renovated.
Certainly, regional universities have a huge impact on the tech sector. Spinouts from universities pepper the North East’s tech meetups.
I was struck, writing my April column on biotech spinouts, by just how umbilical the link was between the universities and the startups and scaleups getting attention. This is great when the sun is shining. But now universities are retrenching.
North East spinout slowdown?
There’s a real risk, I fear, that the North East – not just its tech sector, although that is the case – is overexposed to its universities. And with the first ripples of retrenchment starting to show on the ground at universities, there’s a potential knock-on effect on the ideas and companies that are fostered within their walls.
It’s unlikely that the impact of this will be felt immediately. The seismic shock that the university sector is going through won’t result in immediate, obvious destruction. But instead, it’s weakened the foundations of what can be built.
It takes time for students to go through a university degree programme, to graduate, and to conjure up the idea for their business. And so it wouldn’t surprise me if we start to see a slowdown in new ideas in the next three to five years of innovation coming out of the North East– because of a slowdown of innovation and spinouts coming out of our universities.
There are potential silver linings in the massed clouds overhead. The change of government could result in a change of attitude towards the education sector.
The harmful alterations to policies designed to play politics could be overturned, and universities bolstered once more. But I think it’s incumbent on those in the tech sector, here and elsewhere, to think about how to shore up support for startups outside the university sector. Otherwise, we won’t know what we’re missing until it’s gone.
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