Universities – the smartest investment

Universities – the smartest investment

Game-changing report highlights UNSW Engineering as a smart investment.

For the very first time in Australia, research universities can measure their contributions to the economy. In a game-changing report, Deloitte Access Economics provides compelling evidence that rather than being a funding challenge for governments, universities are a super smart investment.

The The Economic Contributions of Australia’s Research Universities report, commissioned by UNSW as part of the University’s new 10-year strategy, reveals the significant, long-term economic growth that is generated by applied research. The report revealed that universities across Australia deliver $160 billion a year to the economy through their research and innovation activities. This equates to 10 per cent of GDP. To put that into perspective, mining contributes approximately 7 per cent of GDP!

The Dean of Engineering, Professor Mark Hoffman, says he wasn’t surprised by the results. “I’ve long believed that universities are essential for driving innovation, productivity and the jobs of the future. The report confirms that investing in the sector results in significant returns to both the economy and society as a whole.”

Numbers like these demonstrate that public investment in research generates significant returns. The report revealed that for each dollar investment, university research generated between $5 and $10. UNSW alone generated a total of $15 billion for Australia’s GDP in 2014, and indicated that the gross returns of UNSW Engineering’s research activity would have been in the region of $85 to $95 million in the same year.

The report highlighted the economic benefit of the current research projects within the Faculty of Engineering and found that applied research has clear and demonstrable impacts on productivity and economic growth, particularly through technology. The report drew focus on photovoltaic solar cell research to demonstrate how research-driven technological innovation within the Faculty of Engineering demonstrated clear impacts on productivity and economic growth.

Since the 1990s, UNSW has not only contributed to improving the efficiency of solar panel production, but has also produced a large number of highly-skilled graduates who are contributing their skills and knowledge to this thriving industry. Since 2011, the manufacturing capacity modelled on UNSW’s designs has been growing at close to $1 billion per annum.

Another long-standing research program, microfiltration membrane research, started at UNSW in the 1970s and catalysed the development of membrane technology, which revolutionised the treatment of drinking water around the world. Following a breakthrough in low-pressure microfiltration membranes, UNSW became a world-leader in membrane research by making significant contributions to an industry which has transformed water treatment, and contributed to areas of environmental protection, manufacturing, and desalination.

The third profoundly successful research program detailed in the report is a powerful software kit, Kakadu, which was developed in the early 2000s. The software allows developers to build compatible applications that utilise the internationally adopted standard for image compression, JPEG 2000. It has become the market-leading software for JPEG 2000 image compression and has been licensed to more than 300 companies worldwide, including several companies in the film production and distribution industry. Kakadu has been commercialised by UNSW and has generated tens of millions of dollars in economic benefits for its users and UNSW over the past 10 years.

Professor Hoffman is unequivocal in how the report should be used to make a case for supporting investment in university research. “By quantifying the contribution of university research to the economy, the Deloitte Access Economics study finds that universities have an increasingly important role in driving innovation, productivity and increased living standards in Australia over coming decades. The report makes it clear that the issue is not that we can’t afford to publicly invest in our universities, but rather, we can’t afford not to.”

The report in numbers:

  • $160 billion was generated by knowledge and technology from university research in 2014
  • 10% of GDP in 2014 was attributed to the impact of university research
  • Every $1 invested in university research produces a $5-$10 return to the economy
  • $140 billion is what all university qualified workers in the economy added to GDP in 2014
  • $15 billion is the amount generated by UNSW for GDP in 2014
  • $1.76 billion generated in economic activity in 2014 from UNSW’s day to day operations and capital expenditure, creating 11,700 full-time jobs
  • More than $204 million per annum is added to the economy from the 4,900 UNSW students who graduate every year
  • 10% increase in university research spending would deliver a third of the productivity growth required to maintain Australia’s living standards to 2050
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