The Government’s newly-released Industrial Strategy is a weighty and significant document laying out a vision for industrial overhaul and setting an array of challenges to refit the UK economy for the 21st century. A profound need for higher education is interwoven throughout – large parts of the strategy are essentially undeliverable without a large, strong and broad university system and the Strategy is clear about the need for guidance and graduate support to maximise the chances of success. And one of the crucial policies tackles localism, stating that we will ‘Agree Local Industrial Strategies that build on local strengths and deliver on economic opportunities.’
This is a simple statement with wide implications. For higher education, it represents both a great challenge and a massive opportunity. Universities will be expected to have a significant local impact as a supplier of skills, innovation and insight. Their often-underappreciated and overlooked role as significant local employers will also become more important. But how important is a local perspective to institutions? Surely universities – especially the most established and most high profile institutions – have a national, or even international, focus? It is assumed that students choose the best course for them, regardless of location, and then travel again when they graduate to where the jobs are within the UK labour market.
However this assumption is not a true reflection of what takes place. Most universities recruit most of their students relatively locally, and most of their graduates also work locally. This has profound implications for understanding the interactions between institutions and their local economies and how we ensure staff are properly trained and skilled to make the best of that. The degree to which universities are interwoven with their local context can be illustrated by relatively simple data from HESA returns on the Student Record and Destination of Leavers of Higher Education (DLHE) survey.
You can split graduate employees in a given area into 4 groups as follows.
Loyals. They were domiciled and studied in same region and now work there as well. They made up 45% of 2015/16 graduates (same as last year)
Stayers. They move away from their home region to another region to study and stayed there to work. They made up 13% of 2015/16 graduates, up from 12% last year
Returners. They move to another region to study and then returned home to work. 24% of 2015/16 graduates were Returners, the same as last year
Incomers. They move away from home to study, and then move again, to a new region, to work. They made up 18% of 2015/16 graduates, down from 19% last year. 42% of all Incomers work in London.
This shows that the idea of the highly mobile graduate is not the norm. In all 58% of graduates from 2016 went to work in the region they studied in and 69% went to work in the region they were originally domiciled. Only 18% of graduates went to work somewhere they were not already connected to.
And this has significant implications. If the majority of graduates work in the same region they studied, then the higher education system is largely supplying labour to local rather than national labour markets.
This is where the difference between those labour markets becomes important, because the UK is not one large labour market – it is an interlocking ecosystem of overlapping, but distinct, labour markets each with its own character, opportunities and challenges.
Let’s take an example. Manchester and Bristol are the two dominant skilled labour markets in their respective regions. Over half the workforce in both cities have a degree or equivalent. Both have a diverse range of available opportunities. But they have differences in which opportunities are available.
Professional level jobs taken by UK domiciled first degree graduates from 2015/16 who started their careers in Manchester and Bristol.
Bristol is stronger in engineering and the arts. Manchester has a much stronger marketing sector and a stronger legal industry. And when you look at the data in more detail, you can see that Bristol graduates are much more likely to work in small businesses than graduates working in Manchester, whilst in Manchester medium-sized and large businesses are more important. And when you look at the data and realise that the large majority of graduates who go to work in both cities either studied locally or grew up locally, it becomes plain that the two labour markets are discrete and there is little interchange of workers. Almost everyone who went to university in Manchester and gets a job in Bristol was originally from the south west, and the reverse is true for graduates moving from Bristol to Manchester.
This implies a change in thinking about our institutions. We need to make sure staff are trained to be profoundly aware of their local economies and social contexts, even at our internationally-focused research institutions, as these local areas are their main sources of UK students and the main recipients of our skilled graduates. We need to consider student support and guidance and how to help students who return home after graduating. These graduates – particularly those who return home to higher education cold spots or areas with weak skilled labour markets – are much the most likely to struggle to make careers post-graduation. Whose responsibility is it to help a student from rural Lincolnshire who goes to university in the south-east and returns home on graduation to a difficult labour market? How should we support them? These are the kinds of questions that the Industrial Strategy – and the realities of student and graduate behaviours and the labour market – need us to confront and answer to make universities more effective.