East of England Development Agency

The report is the first rigorous study of its kind to be conducted on a UK university and its development has been supported by the East of England Development Agency (EEDA), the Cambridge Network and the Greater Cambridge Partnership.

The report concludes that the University of Cambridge contributes a massive 951 million in direct expenditure to the UK economy every year. In the absence of the university, and consequently the absence of the Cambridge Cluster, the cumulative economic impact on the UK over the next 10 years would be a loss of 57.5 billion in Gross Domestic Product (GDP) and 154,000 jobs.

The results of the study provide further evidence of the importance of the university to the Cambridge Cluster. One impact resulting from the university's teaching activities is an increased entrepreneurial spirit, which has played, and still is playing, an important role in the Cambridge region.

Cambridge Consultants, which was founded in 1960 by a Cambridge University graduate, inspired the establishment of more than ten other contract research organisations, the existence of which have been influential in the development of the Cambridge Cluster. This is now Europe's leading biotechnology cluster and the university has played an important role, both directly and indirectly, in its formation, which now numbers about 900 innovation based companies. 250 companies have been started based on knowledge transfer from the university and survive today. Of these 250 companies, 175 are located within the Cambridge Cluster.

Other key findings of the study:

The University of Cambridge is a significant business in its own right with annual direct expenditure of 951 million

It directly employs more than 11,700 people and in total supports more than 77,000 jobs in the East of England.

If the university did not exist, the impact of the loss of its expenditure and employment over the next 10 years (excluding the impact of the Cambridge Cluster) would require:

Regionally - replacement of a net present value (NPV) of 21.2 billion in GDP and about 77,000 new jobs

Nationally - replacement of an NPV of 4.4 billion in GDP and about 10,800 jobs

(Note - The national figures are lower as they assume other institutions would take on some of the responsibilities of the university in its absence)

To date 51 companies have spun-out directly from the university, of which 33 operate in the biotech sector and seven in the IT or telecommunications sectors.

More than 7,700 university students and staff actively participate in voluntary activities which benefit their communities and help nearly half a million people each year

Cambridge-associated researchers have received more Nobel Prizes than any other university (81 in total).

Richard Ellis, chair of EEDA, said: 'We already know that the University of Cambridge is one of the world's leading universities, but this study gives us much more detail on its economic and social impacts on the East of England and UK economies.

'The report gives a fascinating insight into the contribution the university makes to the Cambridge Cluster and to hi-tech companies in the East of England. The entrepreneurial spirit has and continues to play an important role in the Cambridge Phenomenon, generating many new enterprises. I look forward to seeing future generations of graduates build upon this success and expand the cluster throughout the region with new enterprises and technologies.'

Charles Cotton, executive director of Library House, said: 'This report demonstrates that the University of Cambridge ranks in the top three research universities in the world. Cambridge combines this global academic standing with a significant impact on the formation and continuing development of the Cambridge Cluster which magnifies its economic impact on the East of England and the nation.'

Ian Leslie, pro vice chancellor for research, Cambridge University, said: 'The university's contributions to society and the economy are diverse. It is fascinating to see how our wide range of contributions are viewed from outside, and I am confident the Library House study will move the thinking on the value of universities forward.'

Library House developed the Higher Education Impact Model structure and analysis method following a world-wide review of other models. It examines the two principal activities of a university - teaching and research, looking at their direct and indirect, economic and societal impacts.

The Higher Education Impact Model produced to carry out this research has now been made publicly available and is free for other universities and higher education establishments to use, to assess their own economic and social impacts. Go to www.impactmodel.org



About EEDA
The East of England Development Agency (EEDA) is the driving force behind sustainable economic regeneration in the East of England: Bedfordshire, Cambridgeshire, Essex, Hertfordshire, Norfolk and Suffolk. The vision for the East of England is to create a leading economy, founded on a world class knowledge base, creativity and enterprise to improve the quality of life for all who live and work here.

About Library House
With over 4,000 private companies and more than 3,000 investors covered by its online service Library House Public Company Intelligence, Library House is the pre-eminent source of profiles and research on high-growth private companies. Library House helps professionals discover, compare, and monitor private companies as they progress through their lifecycle from initial investment to, partnering, trade sale or public offering. Since its founding in 2002, Library House has provided investors, advisors, business development professionals, universities and government the most complete view and direct access to the fast-growth companies in the U.K. through its database, reports, events and analysis.

About the Report
The 64-page study provides substantial detail on the social and economic impact of the University. The following is a high-level summary:

Economic Impact
The University is one of the largest employers in the East of England region and a significant business in its own right. In 2004, the University directly employed more than 11,700 people, with that number reaching 77,000 with indirect employment included.

GDP Impact
Another perspective on the financial impact of the University is that of the income tax contribution of a Cambridge graduate. The average Cambridge graduate receives more in government teaching grant support than the average UK graduate but contributes substantially more in income tax during their working life. The additional teaching grant support produces a return on investment, measured in income tax paid of a multiplier of approximately 13.9x.

Cambridge Cluster
Since 1960 the University has played a pivotal role at the centre of Europe's leading technology cluster. The Cambridge Colleges contributed directly to the creation of the Cambridge Cluster through the Cambridge Science Park (Trinity) and the St John's Innovation Centre. Today the Cluster numbers close to 900 technology companies and in 2004 generated 3.4Bn in revenues and employed over 27,000 people directly and attracted 20% of the venture capital invested in the UK.

Societal Impact
Cambridge University's social contribution is also significant. Cambridge alumni value social contributions highly. Students, staff and alumni participate actively in their communities, spending an estimated 200,000 hours of their time every year on community and volunteer activities, helping 470,000 people in their communities. Cambridge University is also actively engaged in public education and events such as the Cambridge Science Festival attract 15,000 visitors annually, encouraging them to understand science better.

Methodology of report
Library House developed the Higher Education Impact Model and associated analysis methods based on a modular approach which examines the direct and indirect economic and societal impacts of the University. This is the most comprehensive report carried out in the UK on the impact of a university and builds on tried and trusted methodologies used in previous studies on US universities.

*******

For further press information please contact:
Lisa Davidson, press officer at EEDA, tel: 01223 200871, email: lisadavidson@eeda.org.uk