‘Building a high-wage economy starts with British universities’
Earlier this month, Prime Minister Boris Johnson announced the government’s new plan for growth in the post-Covid economy. The takeaway is that the UK must create a ‘high wage, high skill, high productivity’ economy.
The ambition of developing a high wage economy while also solving the UK’s ‘productivity puzzle’ will be celebrated by executives and university professors alike. Productivity and higher wages lead to increased innovation, economic growth and the birth of companies that can take on the tough challenges facing the world, from an aging population to climate change.
In a globalised world, however, a high wage economy relies on access to the highest calibre of talent. It means attracting the best and the brightest, who often come from a diverse range of backgrounds. The most crucial hurdle for the UK’s longer-term economic success will be attracting, training, and retaining international university graduates that can be called upon to innovate.
The quality of UK higher education is extremely important for students hoping to catalyse a strong career. This is reflected in international demand for British university places, which increased even during the peaks of the COVID-19 pandemic. The academic year ending in 2021 saw an 11% year on year increase in international applicants. What’s more, 70% of UK-based international graduates have been reported to have intentions to seek employment in the country following their degrees.
Given such positive growth in the supply of well-educated workers into the labour force, we must ask how we can retain such talent in order to reap the long-term economic benefits of a proficient workforce. Many highly skilled employees eventually end up leaving the country seeking better opportunities elsewhere. Nearly two in fiveinternational students have found obstacles to achieving a job during, or even gain no work experience at all after their studies. The ineffective batch of incentives currently in place to retain talent is at the heart of the UK’s economic challenge.
Under the current system in the UK, even Albert Einstein himself might not have had the chance to grow his talents had he studied here. He was a poor student, but he had space for his talents to be nurtured and to become the brilliant physicist we remember today. Thanks to the opportunities that were granted to him, he was allowed to develop the theories that have fundamentally changed the way we view and understand our world. We must do everything we can to keep the Einsteins of the future in the country.
As an employer and investor in the UK, I do not think that there is enough that is being done to generate a healthy and competitive talent pool to sustain the UK’s start-up ecosystem. It is unrealistic to expect all graduates to change the fundamentals of physics, but access to a deep international pool of talent is integral to the growth of any developing technological field.
An example of how to do that would be to commit to long term support for the UK’s start-up culture. Since the start of the pandemic, we have seen extraordinary growth of venture capital investments with aggregate deal size exceeding £20bn in 2021 alone. Existing measures like the Enterprise Investment Scheme and Venture Capital Trusts have helped to encourage UK investors to back the start up sector. The onus is now on the Government to ensure these schemes remain attractive to investors into the future.
A long term flow of capital into the sector will improve graduates’s confidence in committing themselves to a career in tech. Gone will be the days of thinking that the only stable career route will be to climb the corporate ladder, replaced by the increasingly attractive start-up ecosystem.
To get students ready for these fields, I would encourage sector-specific large scale investment in skills and training. This cannot be done without the help of universities, as the UK needs more engineers, data scientists, and coding experts to build the digital economy of the future and more visionaries, entrepreneurs, and theorists that will guide us there. If we’re to help Boris Johnson to build a high wage economy, the first step will be to remain competitive for global talent.