Australia’s hidden asset: Universities are the new wealth of nations
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Australia’s hidden asset: Universities are the new wealth of nations

Australia’s hidden asset: Universities are the new wealth of nations

President and Vice-Chancellor of UNSW and Chair of the Group of Eight Universities, Professor Ian Jacobs, addressed the National Press Club in Canberra on Tuesday.

Here is an edited transcript of his speech.


Good afternoon ladies and gentlemen.

I want to start by acknowledging that we stand on the land of the Ngunnawal people, and pay my respects to them as the traditional custodians of the land and to their elders past and present.

My thanks to the National Press Club for this invitation. It is a privilege to be here to deliver my address titled: Australia’s hidden asset: Universities are the New Wealth of Nations.

I do so in my capacity as Chair of the Group of Eight (Go8) universities, but I want to emphasise that we see our eight universities as just one part of the spectrum of post-secondary education – including vocational, TAFE and other outstanding universities – all equally crucial to the future of Australia. We support an integrated approach across the full spectrum of educational offerings, noting that university is just one of many routes to a successful and worthwhile life and career.

But today, I am here to deliver a number of important messages about the impact of the Go8 universities.

My first message is about our economic impact, billions of dollars, as set out in a report commissioned from London Economics, which I launch today.

The second message is about the need for our universities to more effectively communicate the way that we contribute to and serve Australian society.

The third is a call to action to increase business-university collaboration, and drive the research pipeline from discovery to commercialisation to maximise Australia’s future prosperity.

But before I make those points, I want to talk about the role of higher education as a pillar of the economic well-being and social progress of nations.

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Higher education contributes to the economic and social wellbeing of countries. Source: Shutterstock

Australia is a higher education exemplar. Just 0.3 percent of the world population but home to 25, that is 5 percent, of the top 500 ranked universities globally – 16 fold above our size. On a per capita basis, our Go8 universities are better represented in the QS Top 100 ranking of universities across the world than the higher-education giants of the US and the UK.

The history of Australia’s universities began in 1850 when William Charles Wentworth sought to establish the University of Sydney to give “the opportunity for the child of every class” to become “great and useful in the destinies of this country”. I share Wentworth’s vision and feel passionately about this objective being achieved in Australia, and on a global scale.

We are witnessing the massive expansion of universities in China and now India – alongside an extraordinary pace of economic development. It is indisputable that education is a key to breaking entrenched disadvantage, and a major contributor to reducing inequality worldwide.

Adam Smith’s book The Wealth of Nations – published in the 1700s – maintained that if individuals act in their own interests, the whole nation will benefit.

In his recent book The New Wealth of Nations Indian economist, Surjit Bhalla, argues that the true key to prosperity today is providing individuals with an education.

Education is the new wealth of nations.

As Bhalla notes: “The industrial revolution transformed lives – primarily in the western world. But the education revolution has transformed lives all over the world.”

When the University of Sydney was established, just 10 percent of the world was literate and wages had been stagnant for centuries.

Today, 86 percent of the global population is literate, millions of people have been lifted out of poverty and human capital, achieved through education, is even more valuable, globally, than any financial asset.

Like financial assets, it yields an income and myriad other benefits. Unlike financial assets, it cannot be hoarded or lost and is a powerful force for equality.

As our prime minister acknowledges “the most valuable resource we have in our nation is not under the ground… it is walking around on top of it”.

Knowledge – the original renewable resource – is our most precious commodity in this high-tech world. And Australia, courtesy of our post-secondary education sector, generates it in abundance.

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Only 10 percent of the world was literate when the University of Sydney was established. Source: Shutterstock

So, against that backdrop, I come to my first message, about the economic impact of the Group of Eight universities.

Life-changing, society-advancing endeavours are the fundamental contributions of our universities. But, as a sector, we are also rightly asked to justify ourselves in financial terms. Our economic impact tells a compelling story. A story which may surprise some and, I hope, excite many.

Earlier this year, we commissioned an independent report by London Economics – a world-leading specialist policy and economics consultancy – on the impact of the Group of Eight. The take-home message is simple – there are few more worthwhile investments in Australia today than higher education.

In 2016, it cost A$12.4 billion to operate the Group of Eight universities, of which public funds from the government provided A$6.7 billion. The London Economics report reveals that the work of the Go8, delivered a return of over A$66 billion to the nation.

That is a 10 fold return on the government’s investment.

That A$66 billion return came from four areas: research, teaching and learning, educational exports, and direct university expenditure. I will share some highlights and the full report is available today.

Astonishingly, every one dollar of public funding spent on Go8 university research generated A$9.76 across the rest of the Australian economy.

Every one dollar of public money invested in our research generates a roughly 10 fold return for the Australian economy. And I should note that London Economics adopted a conservative methodology.

Clearly, funding research is an astute investment in the future of the nation.

But that is not where the impact ends. Every 1,000 jobs created within a Group of Eight university supports more than 2,400 jobs throughout Australia.

And while the Go8’s more than 100,000 overseas students bring a depth and breadth to campus life that is impossible to quantify, it is their economic contribution we focus on in this report.

For every three overseas students studying at Group of Eight universities, A$1 million of economic activity is generated in other parts of the Australian economy. That is because as well as working hard our international students experience our lifestyle.

Beyond tuition fees, our students go out to cafes, restaurants and to see movies. They pay rent and bills, buy food and use public transport. And their friends and family come to visit as tourists.

According to the London Economics report, the average non-fee expenditure per student during the course of their studies is A$51,000 – totalling A$8.5 billion for our 2016 student cohort, supporting more than 29,000 Australian jobs. These are not jobs for academics or university administrators. They are jobs out in the community – chefs, waiters, taxi drivers, shop assistants, workers in construction, private enterprises and tourism.

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International students are financially beneficial to Australia. Source: AFP/William West

And the economic return is not just confined to the period that international students study in Australia.

The prime minister, speaking about international education last week, said that Australia’s ability to capitalise on the opportunities of the Indo-Pacific depends on strong links to the region.

In his words, “The education sector has the capacity to influence this like few other industries.”
The connections forged – the money spent, the jobs created – are impacts of a dynamic university sector.

But they often go unrecognised or are hidden from view. And the fault for that lies with us.

And so, the second message I want to convey today begins with a mea culpa. There are some exceptions, but on the whole, universities have not excelled at communicating their worth – and I believe it contributes to the current climate of criticism.

There is a perception, not just in Australia, that universities have failed to adapt to meet contemporary needs. And there appears to be a lack of understanding, of what universities offer our nation socially and economically.

We have not taken the community – the taxpayers who fund so much of what we do – along on our journey.

We need to improve communication with the community we serve and make the A$66 billion annual return from Go8 activity real to the Australian public.

One powerful way to explain this is to show what that amount of money would allow the government to provide for the Australian people on a yearly basis.

It is sufficient to entirely cover welfare payments for the aged.

It is twice the cost of Medicare.

It is more than enough to pay for the government’s entire education budget or its entire defence budget.

Such is the economic power of the education and research at just eight Australian universities.

But beyond the dollars we must communicate the real-world social impact of Australian universities.

Our photovoltaics researchers, for example, have constructed solar cells for more than 40 years, even when nobody understood the potential of their research.
Now this work has a key role in addressing climate change, providing progressively cheaper renewable energy generation across the world.

Another example, close to my heart having spent most of my career caring for women with cancer and researching in this area, is the Gardasil vaccine.

This is an extraordinary tale of scientific brilliance, healthcare advances and partnership between academia, industry and government – none of which, I should emphasise, had anything to do with me.

It is a great Australian story based on the brilliant research of Ian Frazer and the late Jian Zhou whose work at the University of Queensland made it possible to develop a vaccine to prevent this devastating disease. It has been a resounding financial success with returns to Australia exceeding A$1 billion to date. But, its benefits are much greater than that.

Preventing cervical cancer means less stress on health care, less productivity loss through illness and less reliance on welfare payments.

But transcending all of this is the human element of the Gardasil discovery. I have witnessed, firsthand, how devastating cervical cancer can be. I saw too many women in the UK die of this cancer, despite the latest therapy. And over more than a decade of partnership in Uganda – where treatment and screening remain largely unavailable – I have seen women experience dreadful, unnecessary suffering and death from an entirely preventable disease.

Tragically, there are still over 500,000 cases of cervical cancer per year worldwide and over half of those women will die. Gardasil has the potential to save the lives of women in Australia, Uganda and every other country.

It offers prevention for women in countries with and without proper healthcare.

For the mother I diagnosed – whose own mother had died of cervical cancer and who feared desperately for the health of her daughter – the Gardasil vaccine means peace of mind.

How do you put a dollar figure on that?

You simply cannot put a price tag on the prevention of pain and suffering – for the person diagnosed or their loved ones.

And, yet, surely that is of the greatest value.

That is the real impact of our research.

That is how it benefits the Australian people and how it can become a gift to people around the world.

Is there anyone who would claim the time, energy and funding that went into Gardasil or solar energy research for that matter was wasted?

A recent Science and Technology Australia survey showed that 94 percent of respondents believe science and technology is important to their wellbeing and 78 percent think we should be investing more in research.

So why is there a disconnect between that public support and real-world investment?
It is up to the university sector to communicate clearly to Australians:

  • the research that is being done
  • why it is important
  • and why they should champion the cause of research in Australia.

For our part, Go8 universities, can better communicate our work and our pride in our research achievements.

There are many:

  • University of Melbourne’s life-changing cochlear implant.
  • The University of Sydney’s non-invasive positive pressure treatment for sufferers of sleep apnoea.
  • Monash University’s work to improve access to mental health services.
  • ANU researchers’ quest to preserve Indigenous Australian languages at risk of extinction.
  • University of Adelaide’s world leading winemaking and viticulture research.
    UNSW work in zero-waste recycling and producing green steel

Right now, Go8 researchers are also working in diverse areas from:

  • reversing early tooth decay
  • and eco-friendly alternatives to chemical insecticides
  • to mitigating extreme heat in Australian cities
  • through extraordinary work to produce 3D replacement skin
  • and automation crucial to Australia’s mining industry
  • to cost effective, sustainable ways to repair sewage pipes, and
  • very much in our minds right now helping farmers with water usage.

We are equally proud of the high-calibre alumni that Go8 universities produce.

Of 15 Australian Nobel Prize winners – one of whom is Vice-Chancellor of the ANU, Brian Schmidt – 10 were Go8 educated.

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A recent Science and Technology Australia survey showed that 94 percent of respondents believe science and technology is important to their wellbeing and 78 percent think we should be investing more in research. Source: Lucas Vasques on Unsplash

Eight of the last 10 Australian Prime Ministers were Go8 alumni and our former students continue to achieve across the board, amongst them:

  • the start-up, Tritium, building super-fast charging stations for electric vehicles
  • the first female CEO of the Macquarie Group
  • Akshay Venkatesh born in Delhi, educated in Australia and a graduate of the University of Western Australia who recently won the equivalent of the Nobel Prize for mathematics, the Fields Medal…congratulations Dawn and UWA colleagues.

This is a mere fraction of what Go8 universities have produced – and given we graduate more than 96,000 students each year, our footprint will continue to grow.
It is a good news story and one we want to share.

So, to my third and final point. That is to call for a significant escalation in business-university collaboration – in cooperation with government, to drive the discovery-to-commercialisation pipeline, so as to maximise our country’s future wellbeing and prosperity.

Australia has successfully built a university research base which is the envy of much of the world. But, there is enormous potential in Australia’s research sector that remains untapped. Australian universities have great strength at the discovery end of the research pipeline.

In industry research, the focus is at the commercialisation end. There is a gap in between. We need to support the entire research pipeline – from discovery, to translation, to application, to commercialisation.

This pipeline is crucial to advances which change lives, create jobs, and support a modern 21st century economy and it is key to our ability to compete with emerging Asian nations and existing strength in Europe and North America.

While Go8 universities have enjoyed important successes with our research being commercialised here in Australia and creating jobs here in Australia, there are many stories of lost commercial opportunity because we have not had the money or the willing partner to complete the discovery-commercialisation pipeline. The solar research I mentioned is a case in point.

Developed in Australia but eventually finding commercialisation success overseas.
Do we want the economic return on the ‘next big thing’ discovered by Australian researchers to land here and create jobs here or in another country? If the answer is “here” – and of course it is – then we, as a nation, need to take action.

We thank successive governments for their vision in investing in research capacity in Australia and ask them to continue to invest in this area where Australia has a globally competitive edge.

Today, we face the reality that not only has Australia’s investment in R&D declined for the first time in two decades, but we lag internationally. We spend just 1.9 percent of GDP on R&D while the OECD average is 2.3 percent, with Israel’s spend way up at 4.25 percent. Fear of failure may be one obstacle to investment in research.

The opportunity is clear provided Australia can mobilise the investment required to generate the available return.

We have to stop seeing the funding of research as tantamount to a charitable donation. It is not. It is a sound business investment and, more importantly, an investment in the future of the nation. The A$24.5 billion per annum return on research investment in Australia’s Go8 universities could be many times higher.

In fact, the London Economic Report estimates that an extra A$500 million invested in research in our universities – of the order of the scale of the MRFF – would generate a return of approximately A$5.3 billion. If we increased R&D spend by 0.5 percent of GDP, just up to the OECD average, the return would be much greater.

There is enormous potential to maximise the impact of research through:

  • investing more in the discovery to commercialisation pipeline
  • clearly communicating the role university research plays as a key economic driver
  • and incentivising academia and industry to work together.

The Go8 will lead by example to move forward the conversation on business-university engagement.

In October this year – in partnership with the Business Higher Education Roundtable – we will host a summit of industry and university leaders, together with Australian Government officials. We will explore ways to maximise the return for our nation on Australia’s discovery to commercialisation pipeline.

In conclusion, the Group of Eight universities believe it is time to forge a new relationship with government, business and the Australian people. In making this commitment we offer the London Economics Report as evidence of our confidence in the economic value of education and research.

Our commitment is made as hubs of knowledge and independent thought, as champions of freedom, openness, human rights and justice, and as a force for increasing prosperity and equality. We believe that universities can serve Australian society in navigating the challenges and opportunities of our age.

The Go8 universities is committed to ensuring that Australia maintains its place as one of the most prosperous, advanced and socially responsible countries in the world and that Australians understand, value – and take pride in – the leading role of the higher education sector, in fulfilling that aspiration.

Thank you.

By Ian Jacobs, Vice Chancellor, UNSW

This article was originally published on The Conversation. Read the original article.

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