BIRMINGHAM CITY UNIVERSITY’S SOCIO-ECONOMIC IMPACT SUMMARY REPORT JUNE 2020 Birmingham City University’s Socio-Economic Impact

TABLE OF CONTENTS

Executive summary 2

1. Introduction 8 1.1 Regional context 8 1.2 Structure of this report 9

2. The University’s economic contribution 11 2.1 The University’s direct impact 11 2.2 Indirect Impact: procurement from local suppliers 16 2.3 Induced impact: payment of wages by BCU and 18 its suppliers 20 2.4 The University’s total expenditure impacts 23 2.5 ‘Additional’ students’ expenditure impacts 25 2.6 Attracting visitor spending 26 2.7 Summary of total economic impact 31 3. Boosting the productive potential of Birmingham and the West Midlands 32 3.1 Providing skills required by the labour market 35 3.2 Entrepreneurship education 36 3.3 Upskilling the labour force through continuous professional development 37 3.4 Driving business growth and entrepreneurship 38 3.5 Steamhouse – STEAM innovation facility 38 3.6 BCU’s cultural impact 38

4. Conclusion 43

Appendix 1: Economic impact across three geographies 44 Appendix 2: Methodology for calculating BCU’s multiplier impacts 45

1 Birmingham City University’s Socio-Economic Impact Birmingham City University’s Socio-Economic Impact

EXECUTIVE SUMMARY

Prior to the coronavirus crisis, Birmingham’s economy was along its supply chains and through its payment of wages. When growing strongly. Over the five years from 2013 to 2018, it we consider BCU’s impacts in the West Midlands and the UK as expanded by an average of 2.9% a year in real terms—well above a whole, this multiplier increases to 1.7 and 2.6, respectively. 6,700 the national rate of 1.8%. In 2018, the Birmingham local authority , area produced 1.5% of the UK’s total GDP and was home to 4 810 The expenditure undertaken by the University, the students it In the 2017/18 academic year, 582,000 jobs (1.7% of the UK total). attracted into the area, and their visitors is also found to have Total number of jobs in 6,700 (28%) of all BCU students stimulated a total of 4,810 jobs in Birmingham in 2017/18. This Birmingham that were came from Birmingham. Another This report looks at one of the factors that has contributed equates to 0.9% of all employment in the city that financial year. supported by BCU in 8,000 or 33% came from the rest to Birmingham’s recent success: Birmingham City University Looking more widely, BCU’s expenditure supported a total of 2017/18. of the West Midlands region. (BCU). Our study quantifies the University’s economic 7,030 jobs in the West Midlands region that year, and 8,690 jobs contributions to the city, the wider West Midlands region, and in the UK as a whole. the UK as a whole. It does so by looking at all the economic A further 2,220 jobs were 69% of the 2017 alumni who were in activity that is stimulated by the University’s expenditure, and The University is found to have an employment multiplier of 1.5 supported elsewhere in the employment or in further education that of the students and visitors it attracts into the area. in Birmingham—in other words, for every 10 people the University West Midlands region. reside in the West Midlands region directly employs, its expenditure stimulates a further five jobs in six months after graduation. The University plays a vital role in boosting the productive the city. For the West Midlands region and the UK as a whole, potential of local people. In the 2017/18 academic year, the BCU’s employment multipliers are 2.0 and 2.7, respectively. University drew 6,700 (28%) of its students from the city, and a further 8,000 (33%) from the rest of the West Midlands region. The University also stimulates significant tax revenues. In Six months after graduating, 69% of BCU students remained 2017/18, we calculate it stimulated some £135 million for the within the West Midlands region, adding to the skilled labour Exchequer—sufficient to pay the average salaries of around pool available to local employers. 97.4% 4,500 nurses. £532m Proportion of BCU’s full-time UK BCU also plays a vital role in fostering innovation in BCU’S PRODUCTIVITY IMPACTS students who were in employment In 2017/18, the University Birmingham and the West Midlands region, with its wide- or further study six months after supported a £532 million ranging research helping both to generate new ideas and apply The skills the University imparts makes its graduates extremely graduating in 2017. contribution to UK GDP. them in a business setting. The University’s STEAMhouse centre, sought after. Six months after their graduation in 2017, 97.4% of opened in Digbeth in 2018, has become home to Birmingham’s its full-time students from the UK were in employment or further innovation community—and is set to expand into new facilities study. This places BCU seventh in the rankings of all multi- By this metric, BCU ranks 65.4% or £286 million of the GDP at the Belmont Works upon completion of the project’s £60 faculty universities in the UK, with a higher percentage than any seventh among the UK’s generated occurred in Birmingham. million second phase. other university in Birmingham. multi-faculty universities.

BCU’S EXPENDITURE IMPACTS The University delivers extensive business support programmes for firms (particularly small- and medium-sized In the 2017/18 academic year, we calculate that spending enterprises, or SMEs) in the local area. Over the three years by the University, the students it attracted into the area, from 2016/17, BCU delivered 1,103 instances of business support, and their visitors stimulated a £286 million contribution to with SMEs benefiting from 10,215 hours of expert assistance Birmingham’s GDP. This equates to 1.0% of the total economic from the University. This support helped bring 16 new products activity generated in the local authority that year. When BCU and services to market, while also enabling the expansion of supply chain and wage-related consumer spending outside businesses offering existing products. Birmingham is also considered, the University’s total GDP impact reached £392 million for the West Midlands region, and £532 million for the UK as a whole that year.

When assessing its total economic impact on the city of Birmingham, BCU is found to have a “GDP multiplier” of 1.4. This means that for every £1 million the University’s own activities contribute to the city’s economic output, its expenditure supports a further £400,000 contribution to GDP

2 3 Birmingham City University’s Socio-Economic Impact

BCU fosters entrepreneurship in students through its BSEEN programme, and delivers a very high number of graduate start-ups each year. During 2017/18, 55 businesses were started , by BCU graduates through the BSEEN programme, as well as 513 000 students’ own independent ventures. This was far in excess of Total number of attendees at the UK-wide average of 22, and greater than for any of the 11 cultural events organised by BCU other universities in the West Midlands region. in 2017/18. STEAMhouse, BCU’s innovation centre, provides entrepreneurs and start-up companies with free access to specialist equipment and expertise, including purpose-built prototyping spaces, materials, and support from skilled technicians. After its first 12 months of operation in 2018, the facility had 249 registered members, received over a thousand visitors a month, and had helped create 45 new products and services.

CULTURAL IMPACTS

BCU contributes to the social and cultural fabric of Birmingham and the wider West Midlands by hosting events and running initiatives which promote the arts. In 2018, events run by, or in collaboration with, the University were attended by more than half a million people.

BCU’s Royal Birmingham Conservatoire cultivates musical talent, and plays host to world-renowned performers and instrumentalists, bringing a wide range of musical events to the public. As well as this, the University runs the Inspired festival, and is a partner in the New Art West Midlands initiative.

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TOTAL ECONOMIC IMPACT OF BCU

Summary of GDP JOBS IN THE 2017/18 ACADEMIC IN THE 2017/18 ACADEMIC Birmigham City YEAR, BCU CONTRIBUTED: YEAR, BCU SUPPORTED: University’s £286m economic impacts to Birmingham’s £532m GDP—1.0% of the to the local authority’s the UK’s GDP total GDP BCU BOOSTS THE PRODUCTIVE POTENTIAL that year.* OF LOCAL PEOPLE £392m to the WHERE BCU STUDENTS ARE FROM* West Midlands region’s GDP 4,810 7,030 8,690

in Birmingham in the West Midlands region in the UK TAX IN THE 2017/18 ACADEMIC YEAR, BCU STIMULATED:

C M £135m (su„cient to pay average annual Y in tax revenues salaries of around 4,500 nurses) CM MY 8,000 6,700 CY BUSINESS SUPPORT 28% CMY 33% OVER THE THREE YEARS FROM 2016/17, BCU DELIVERED: K Birmingham Rest of the West Midlands region *2017/18 academic year 1,103 and instances of helped bring 10,215 business hours of expert WHAT HAPPENS AFTER BCU ALSO support 16 assistance THEY GRADUATE: DELIVERED: new products and services to local to market SMEs 69% of BCU students DURING 2017/18: AFTER 12 MONTHS OF OPERATION, remained in the STEAMHOUSE (BCU’S West Midlands INNOVATION CENTRE) HAD : region* 97% of full-time UK More than students were in 249 employment or registered helped create 1,000 5businesses5 were members visitors further study* 66,152 started by BCU a month graduates 45 days of training to new products (vs UK-wide average of 22) and services the region’s existing More than for any of the 11 other *six months after they graduated in 2017 workforce in 2017/18 universities in the West Midlands region Birmingham City University’s Socio-Economic Impact Birmingham City University’s Socio-Economic Impact

1. INTRODUCTION

1.1 REGIONAL CONTEXT But despite these Fig. 1: Overview of the performance of the Birmingham local authority, substantial contributions, West Midlands region, and UK economies in 2018 Birmingham City University both Birmingham and the is a civic university. It seeks West Midlands trail the to respond to the needs of the national average in terms West

Birmingham Midlands UK local people and businesses of labour productivity—with region within the city of Birmingham their workers respectively and the wider West Midlands producing 93% and 87% of the Levels in 2018 region. This section begins value added generated by the Total GVA (workplace-base), £ billion 29.7 140.6 1,919.0 by discussing the economic average UK worker. This lowers Workforce jobs (workplace-base), thousands 582 2,959 35,081 backdrop in which the local workers’ incomes, and People employed (workplace-base), thousands 551 2,846 32,853 University works. makes goods produced in the Employed residents, thousands 505 2,854 32,959 thousands region less price competitive. Unemployed residents, thousands 41 144 1,380 Birmingham and the wider Total population, thousands 1,141 5,901 66,436 West Midlands region make Moreover, the West Midlands GVA per job (workplace-based), £ 51,000 47,500 54,700 a significant contribution Combined Authority’s Unemployment rate, % of labour forcea 7.4% 4.8% 4.0% In 2018, Strategic Economic Plan to the UK economy. Births of new enterprises 9,410 31,300 380,580

1.5% of the UK’s gross value predicts the region’s poor b 1 3-year business survival rate 49.2% 55.9% 55.3% added was produced in the productivity performance will Birmingham local authority worsen: “Forecasts suggest Share of UK in 2018 area by the 582,000 people that on current trends, the GVA 1.5% 7.3% 100.0% employed in jobs there—which output gap between the West Workplace jobs 1.7% 8.4% 100.0% equates to 1.7% of the UK Midlands and the rest of the Employed residents 1.5% 8.7% 100.0% job total that year (see Fig. 1). UK will widen between now Total population 1.7% 8.9% 100.0% 3 The West Midlands region and 2030.” The plan attributes Births of new enterprises 2.5% 8.2% 100.0% accounted for 7.3% of the UK’s this to region’s “large number a gross value added that year, of low-value companies in Employed plus unemployed residents b from its 8.4% share of UK jobs. low-growth sectors, the low 2018 data, relates to businesses created in 2015 business birth and survival Between 2013 and 2018, rates in some areas, and the both Birmingham and comparatively high number the West Midlands region and proportion of residents 1.2 STRUCTURE OF THIS It then goes on to investigate career destinations. It looks outperformed the rest of the with low skills and, in many REPORT the contribution made by at the University’s business UK economy, growing on cases, no formal qualifications.” the expenditure of (i) BCU support activities, and how average by 2.9% and 1.9% per This economic context This report is organised students from outside the local it fosters entrepreneurship. year respectively—compared highlights the importance of as follows: area, and (ii) visitors to the Lastly, it examines BCU’s with the national average of the growth- and innovation- University, including attendees cultural contribution to 1.8%.2 In Birmingham, high promoting activities of higher Chapter 2 quantifies BCU’s of Open Days and Graduation Birmingham. value added sectors such as education institutions in the own economic contribution Ceremonies. ICT and professional services West Midlands. in 2017/18, and the economic Finally, Chapter 4 presents our have grown particularly activity the University Chapter 3 looks at the skill key conclusions from the study. rapidly, at average annual rates stimulated as a purchaser levels and productivity of of 7.1% and 5.8% respectively. of locally-made products workers in Birmingham. It and payer of wages to staff investigates how the University living in the local community. seeks to upskill students so It shows how the scale of they are “work and practice- BCU’s contribution has grown ready” when they graduate, since the previous study, and to support students in which used data for 2006/7. gaining access to their chosen

1 Gross value added is easiest thought of as the value that a firm’s or sector’s output is sold for minus the cost of the bought in inputs of goods and services used up in its production. The sum of gross value added across the economy 8 plus taxes (less subsidies) on products is equivalent to gross domestic product (GDP) 9 2 Oxford Economics forecasts based on ONS, (2018), ‘Regional gross value added (balanced) local authority by NUTS 1 region: UKG West Midlands’, 12 December. 3 West Midlands Combined Authority, (2016), ‘Strategic economic plan’. Page 7. Birmingham City University’s Socio-Economic Impact

2. THE UNIVERSITY’S ECONOMIC CONTRIBUTION

2.1 THE UNIVERSITY’S Fig. 2: Birmingham City University’s gross value added DIRECT IMPACT contribution compared to other industrial sectors in Birmingham local authority district, 2017/18 2.1.1 Gross value added contribution to GDP Birmingham City University’s £ million UK operations—through 1,600 its teaching of students, 1,400 1,337 engagement in research, 1,200 1,099 1,000 810 and engagement with local 800 and international businesses, 600 429 charities and governments— 400 244 165 generates economic activity 200 0 in Birmingham, the West Midlands region and the wider

UK. BCU supply storage

In 2017/18, the University recreation made a gross value added food service

contribution to GDP of £165.3 communication Information and million4. To give a sense of Transportation and scale, this is 0.6% of all the and air conditioning Accommodation and economic output produced Electricity, gas, steam Arts, entertainment and in the Birmingham local authority district. Source: Oxford Economics. Totals may not sum due to rounding

An alternative way of trying to gauge the size of the University’s contribution to GDP is to compare it to that made by different industrial sectors in Birmingham. For example, it is equivalent to 39% of the economic output produced by Birmingham’s arts, entertainment and recreation sector, or 68% of output in the electricity and gas supply industry (Fig. 2).

4 As the direct impact occurs at the BCU site, the University’s direct impact is the same across Birmingham, 11 the West Midlands Region, and the UK. Birmingham City University’s Socio-Economic Impact Birmingham City University’s Socio-Economic Impact

The University employs lots of teaching DIRECT and ancillary sta . Its operations IMPACT AN INTRODUCTION TO generate GDP and tax for the authorities. ECONOMIC IMPACT ANALYSIS

This study quantifies the The total economic impact of The results are presented on economic contribution the UK- Birmingham City University a gross rather than net basis.7 resident parts of Birmingham is the sum of these three This means the study measures INDIRECT ACT City University makes to the channels. The scale of the the economic ‘footprint’ of IMPACT local, regional, and national University’s impact is measured Birmingham City University It also spends money with suppliers who employ sta , economy, using an analytical using three metrics: as it stood in during the generate GDP and pay taxes. method called an Economic year. It does not subtract the They use other suppliers in turn. Impact Assessment.5 The • Gross value added is the foregone activity that the results presented are for the contribution an institution University displaced from other academic year 2017/18. or company makes to institutions or sectors. Nor it UNIVERSITY IM P To assess the University’s Gross Domestic Product does not attempt to estimate contribution, this report (GDP). It is most simply what economic benefits examines three channels of viewed as the value of could arise if the labour and INDUCED expenditure which stimulate its output minus the cost capital resources employed IMPACT economic activity in the local of the inputs of goods by the University were put Employees (including of the suppliers) area (Fig. 3): and services used up to alternative uses, as it is spend their wages in in the wider in its production. It is impossible to know what they consumer economy, generating more the measure the Office would have produced if they GDP, jobs and tax revenues. • The University’s direct for National Statistics were employed in their next impact is the economic (ONS) use to quantify most productive use. activity generated by the the contribution to the University itself, and in economy of each individual Our results are presented for the businesses supplying producer, industry or three geographies: goods and services where sector.6 ACT

students and their visitors • Employment, measured Birmingham local authority SUBSISTENCE IM P spend their money. on a headcount basis to district as defined by the Additional students (from outside the area) ADDITIONAL • The indirect impact of the facilitate comparison with Nomenclature of Territorial spend money in the wider economy, on student accomodation, leisure activities and consumer University is the economic ONS employment data. Units for Statistics (NUTS) ACT STUDENTS ’ goods, generating more GDP, jobs and tax. activity generated through • Tax revenue, including area 3 called Birmingham.8 supplier purchases made all income taxes, National It is the area for which IM P in order to fulfil university, Insurance Contributions Birmingham City Council has student and their visitors’ (NICs), corporation taxes, administrative jurisdiction.

orders. and other indirect taxes ORS

• The induced impact (such as VAT) attributable The West Midlands region STUDENTS ’ VISI T

arises as the University, its to the economic activity as defined by the NUTS area ACT

suppliers and those serving stimulated by the 1 called the West Midlands IM P

students and visitors pay University. region since 1 April 2011. It was ADDITIONAL Friends and relatives visiting additional students also spend money in the wider economy, on wages to their staff, which formerly called the West STUDENTS ’ tourist accommodation, meals out, and consumer are onward spent in the Midlands Government Office goods, generating even more GDP, jobs and tax. consumer economy. Region (GOR) until the GORs were closed at the end of March 2011. Added together, all these e ects—both the University's and students' impacts—comprise the total economic impact of the college. The United Kingdom including TOTAL England, Northern Ireland, IMPACT Scotland, and Wales.

Fig. 3: Schematic of the University’s expenditure impacts

5 It does not include BCU’s overseas campuses. 6 Gross value added (plus net taxes on products) is aggregated to form the basis of GDP, the main measure of the total 12 level of economic activity in a country. 13 7 This is a standard procedure in the analysis of the economic impact of individual industries or businesses. 8 The Nomenclature of Territorial Units for Statistics is a hierarchical classification of administrative areas, used across the European Union for statistical purposes. NUTS areas are stable and are only be amended periodically. Birmingham City University’s Socio-Economic Impact Birmingham City University’s Socio-Economic Impact

2.1.1 Employment Fig. 4: Birmingham City University’s direct employment relative 2.1.2 Productivity 2.1.3 Tax contributions to sub-sectors within Birmingham in 2017/18 In 2017/18, Birmingham City By dividing the University’s In 2017/18, the University and University employed an gross value added its employees paid £41 million average of 2,575 members Insurance 1,750 contribution by its number in tax, the majority of which of staff each month on a of employees it is possible was paid as labour taxes and Creative, arts and entertainment activities 2,000 9 to create a simple measure headcount basis. This is Advertising business rates. To give a sense more people than work in the 2,000 of labour productivity. of scale, this is sufficient to residential nursing industry Residential nursing 2,500 This suggests each worker pay the average salaries of 11 and the creative, arts and BCU 2,575 produces an average of 1,470 nurses or 1,190 teachers. entertainment sector in Manufacture of motor vehicles 3,000 £64,200 per year (see Fig. Birmingham (Fig. 4).10 When 6). This is greater than the Event catering 3,500 compared to important local average worker in Birmingham 0 1,000 2,000 3,000 4,000 institutions, BCU employed local authority district, the the equivalent of just over half Employment West Midlands region, and the the number of staff working national average (albeit these within the large Birmingham are measured using jobs as Community Healthcare NHS Source: BCU, ONS, Oxford Economics the measure of labour input). Trust (Fig. 5). This comparatively high gross value added per employee Birmingham City University measure displays the high- employs staff with a diverse skilled nature of employment range of skills. In addition at BCU. to the 1,183 academics, BCU employ 869 professional and administrative staff, as well as 347 managers. This is Fig. 5: Comparing Birmingham City University’s direct Fig. 6: Birmingham City University’s staff labour productivity versus local, regional and national important for the local labour employment to that of local institutions in 2017/18 averages in 2017/18 market, as administration and managerial staff are more likely to be drawn from £ BCU the local area, meaning that 2,575 70,000 the University also provides 64,200 60,000 employment for people Birmingham Community 54,700 4,864 51,000 who already live in the West Healthcare Trust 50,000 47,500 Midlands. 40,000 Birmingham City Council 12,453 30,000 0 4,000 8,000 12,000 20,000 People 10,000 0 Source: BCU, BCC & BCH trust annual reports BCU UK Birmingham West Midlands region

Source: BCU; ONS; Oxford Economics

14 9 Birmingham City University, (2019), ‘Report of the Board of Governors and financial statements 2017/18’. Page 47. 11 ONS, (2018), ‘Earnings and hours worked, occupation by four-digit SOC: ASHE Table 14’, 25 October. 15 10 ONS, (2019), ‘Business register and employment survey’, 26 September. https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/earningsandworkinghours/datasets/occupation4digitsoc2010ashetable14 Birmingham City University’s Socio-Economic Impact Birmingham City University’s Socio-Economic Impact

2.2 INDIRECT IMPACT: produce output to satisfy 2.2.1 Supply chain gross 2.2.2 Supply chain The sectors with the most PROCUREMENT FROM its orders. As such, the value added employment jobs supported by BCU LOCAL SUPPLIERS University’s expenditure on activity and spending were 529 inputs of goods and services The University’s procurement The University’s procurement the professional services Birmingham City University underpins a proportion supported an estimated £111.5 stimulates jobs across the UK (628 jobs), construction (355 Number of Birmingham-based procures a substantial of each firm’s gross value million gross value added economy. In 2017/18, BCU’s jobs) and administrative suppliers used by BCU in proportion of its goods and added contribution to contribution to GDP along its supply chain spending is and support services (335 2017/18. services from local businesses. GDP, employment, and tax UK supply chain. Of this £47.6 estimated to have supported jobs). Most of the jobs in In 2017/18, the University along its local supply chain. million was generated in the 2,120 jobs in the UK economy. professional services and spent £40.9 million, or 32.3% Quantifying this ‘indirect West Midlands region and Of these, 1,175 jobs were administrative and support More than £40 million of its total procurement impact’ in 2017/18, we £31.2 in the Birmingham local located in the West Midlands services were located in (32% of its total procurement expenditure, with 529 estimate that the University’s authority area. region and 865 jobs in the Birmingham local authority spend) was with suppliers in businesses based in the procurement supported a Birmingham local authority (see Fig. 8). Birmingham that year. Birmingham local authority. £31.2 million gross value In 2017/18, £33.0 million (or district. An additional £20.2 million or added contribution to GDP, 30%) of the gross value 15.9% of the total was spent 865 jobs, and raised £9.5 added stimulated by the with 540 suppliers in the million in tax revenues in the University’s procurement wider West Midlands region Birmingham economy. along its UK supply chain was and £62 million with 883 produced by the professional Fig. 8: The University’s supply chain employment impact by suppliers in the rest of the UK. services sector (which industry and geography in 2017/18 includes accountancy, legal, The University’s procurement consultancy, architecture, People stimulates economic activity testing services, etc). Most 700 628 at its suppliers as they of this economic activity 600 52 500 42 504 occurred in the Birmingham 400 355 335 Fig. 7: Birmingham City University’s supply chain impact on gross local authority district. The 300 293 534 64 construction industry and 200 255 66 188 value added by industry and geography in 2017/18 111 92 100 205 172 administrative and support 97 108 118 services sector were the 0 £ second and third-largest

35 33.0 beneficiaries in gross value Other 30 26.5 added terms, with over a 11.6 Real estate quarter of the latter occurring Professional,

25 Construction scientific and 18.7 12

0.2 in Birmingham (Fig. 7). communication 20 17.6 Information and support services

17.9 technical activities 15 Administrative and 11.1 9.8 9.9 10 21.3 5.8 Birmingham 3.2 4.4 5 7.4 8.7 4.6 4.9 4.2 Rest of the West Midlands region 0 0.9 0.6 Rest of UK Other

services Source: BCU; Oxford Economics activities technical Real estate Professional, and support Construction scientific and Administrative communication Information and

Birmingham Rest of the West Midlands region

Rest of UK Source: BCU; Oxford Economics

16 12 Administrative and support services include: renting and leasing, employment agencies; travel agencies; security and 17 investigation; services to building and landscape (including cleaning); and office administration services. Birmingham City University’s Socio-Economic Impact Birmingham City University’s Socio-Economic Impact

2.3 INDUCED IMPACT: Birmingham local authority The industry that benefited At the national level, the retail 2.3.2 Induced impact on PAYMENT OF WAGES BY BCU area. This is equivalent to the most from the wage- and wholesale sector was the employment AND ITS SUPPLIERS 0.6% of all the wages paid to financed consumer spending second largest beneficiary. £55.2m Birmingham’s inhabitants that across the whole UK was Some £23.5 million of its gross The induced impact on The University and the firms year. A further £58.2 million the real estate sector. Some value added was attributable employment is estimated to Employee compensation paid by in its direct supply chain (45% of the total) was paid £43.6 million of its gross value to BCU and the firms in have supported an additional BCU to staff who live in the pay their staff wages. The to staff residing elsewhere added was stimulated by the its supply chain. At the 2,360 jobs in the UK. Of these, Birmingham local authority district. recipients are likely to spend in the West Midlands region, payment of wages by BCU Birmingham local authority 1,340 were in the West a proportion of this income meaning that 88% of BCU’s and the firms in its supply level, it was the largest Midlands region and 550 were in in the consumer economy. employee compensation was chain. This reflects the large beneficiary, with £5.3 million Birmingham local authority area. This expenditure in local paid to staff living in the West share of income spent renting of the gross value added retailers, leisure and other Midlands region or the margin on purchasing stimulated occurring there. The jobs created were outlets stimulates further or selling property (Fig. 9). concentrated in those sectors economic activity, which can The 865 staff estimated to be which supply consumer and be measured in terms of GDP, employed in the University’s leisure goods and services: employment and tax revenues supply chain in Birmingham Fig. 10: Induced impact of the payment of wages by the namely retail and wholesale are also paid wages. Based University and firms in its supply chain on employment by (595 jobs) and hospitality (418). The University spent on the average for their industry and geography in 2017/18 There were smaller impacts £128 million on employee industry, we estimate that in administrative and support compensation in 2017/18—of this amounted to some services (196), and professional, which, £55.2 million (43%) £15.7 million in 2017/18. An People scientific and technical (173) was paid to staff living in the additional £13.9 million and 900 sectors (Fig. 10). 837 £31.4 million was paid to staff 800 in the University’s supply 700 chain elsewhere in the West Fig. 9: The impact of Birmingham City University and supplier’s 600 595 461 2.3.3 Induced impact of tax payment of wages to staff to gross value added by industry and Midlands region and rest of receipts 500 120 geography in 2017/18 the UK. 418 400 288 125 The induced impact also 2.3.1 Induced impact on gross 300 215 supported £46.0 million of £ m 167 196 59.6 value added 200 173 137 revenues for the Exchequer 60 187 161 100 122 127 58 across the whole UK. Of this, 50 125 49 30 46 43.6 The wage-financed 0 £15.2 million was stimulated in 40 37.6 consumption spending the West Midlands region and 30 30.0 23.5 or ‘induced impact’ is Other £6.0 million in Birmingham 20 6.6 estimated to support a local authority district. 11.0 9.8 9.3 13.6 10 8.6 11.6 3.2 £23.9 million gross value

8.0 3.7 7.6 8.4 food services 0 5.0 5.3 2.9 added contribution to GDP support services

in Birmingham in 2017/18. Retail & wholesale Administrative and Transport & storage

Elsewhere in the rest of the Accommodation and Professional, scientific Other and technical activities

Retail & West Midlands and wider UK,

wholesale the spending is estimated to Real estate Professional,

scientific and have stimulated an additional Birmingham £39.9 million and £93.0

Accommodation Rest of the West Midlands region Financial services and food services technical activities million in gross value added, respectively. Rest of UK Birmingham Source: BCU; Oxford Economics Rest of the West Midlands region

Rest of UK Source: BCU; Oxford Economics

18 19 Birmingham City University’s Socio-Economic Impact Birmingham City University’s Socio-Economic Impact

2.4 THE UNIVERSITY’S TOTAL translated into 2017/18 prices in the supply chains of the In 2017/18, the University of 1.4 in the Birmingham local EXPENDITURE IMPACTS (Fig. 12)).14, 15 University and the outlets supported a £220.6 million authority area. This means that where its staff spend their gross value added contribution for every £10 million of gross The direct, indirect and Some 63% of the latest wages. For the West Midlands to Birmingham’s GDP. This is value added generated by the £433.6m induced impacts outlined in year’s gross value added was region, the University had a equivalent to 0.8% of all the University itself, a further £4 this section can be summed produced by the University gross value added multiplier economic output produced million is supported elsewhere In 2017/18, BCU’s expenditure to quantify the total gross itself, 17% by its supply chain of 1.7. So for every £10 in the local authority during in the local authority. stimulated a £433.6 million gross contribution Birmingham and 23% through wage million of gross value added that year. It is 86% higher than value added contribution to UK GDP. City University makes to consumption impacts. The generated by the University the estimate for 2006/7 after Birmingham local authority latter two percentages are itself, a further £7 million is allowing for inflation.16 Some area, the West Midlands smaller than at the national supported across the region 75% of the gross value added 51% or £220.6 million of region and the UK, through its level as the smaller geography through its expenditure. in 2017/18 was generated the gross value added was expenditure. includes less of the firms by the University itself. It generated in Birmingham. stimulated a further 14% and 2.4.1 Overall impact of BCU’s Fig. 11: Total contribution to gross value added supported by the 11% in its supply chain and expenditure on gross value University in 2017/18, by expenditure channel and geography through wage consumption added impacts, respectively. The University can be said to have In 2017/18, BCU’s expenditure £ m a gross value added multiplier stimulated a £433.6 500 million gross value added 450 156.8 433.6 400 contribution to UK GDP. 93.0 Fig. 12: Gross value added supported by the University’s expenditure in 2006/7 and 2017/18 Some 38% was generated 350 156.9 300 39.9 £ m (in 2017/18 prices) at the University itself, 26% 111.5 23.9 Birmingham West Midlands region through its procurement 250 56.0 63.9 300 from its domestic supply 200 16.1 31.5 chain, and 36% through 150 wage consumption impacts 100 220.6 250 165.3 (see Fig. 11). At the national 50 level, the University’s gross 0 200 value added multiplier was Direct Indirect Induced Total 2.6. Therefore, for every £10 150 million in gross value added 276.7 Birmingham generated by the University 220.6 itself, it supports a further Rest of the West Midlands region 100 170.2 £16 million around the rest of Rest of UK the UK economy through its 50 118.7 expenditure. Source: BCU; Oxford Economics 0 Looking at the entire West 2006/07 2017/18 2006/07 2017/18 Midlands region, BCU supported a £276.7 million contribution to the region’s Source: ECOTEC (2008), Oxford Economics GDP in 2017/18. It comprised 0.2% of all the economic output produced in the region in that year.13 This was 43% higher than an earlier study’s estimate for 2006/7 (when

20 13 ONS, (2018), ‘Nominal and real regional gross value added (balanced) by industry’, 12 December. 16 ECOTEC, (2008), ‘Birmingham City University impact study; A final report to Birmingham City University’, December. 21 14 ECOTEC, (2008), ‘Birmingham City University impact study; A final report to Birmingham City University’, December. 15 The gross value added estimates for 2006/7 have been uprated for inflation using the ONS’ Gross Domestic Product deflator. Birmingham City University’s Socio-Economic Impact Birmingham City University’s Socio-Economic Impact

2.4.2 Overall impact of BCU’s the majority of the remainder of 1.5. For every 10 people 2.4.3 Overall impact of BCU outlined in Sections 2.2 to For the West Midlands expenditure on employment located in its local supply chain. employed at the University, its expenditure on tax receipts 2.4. The high quality of its region, those whose home At the local authority level, expenditure supports another educational and practice- postcodes are outside the In 2017/18, BCU supported Birmingham City University is five around Birmingham The University’s expenditure, oriented programmes, links region. For Birmingham local 7,060 jobs around the UK. therefore estimated to have through its procurement and as well as the resultant supply with industry, and strong authority it is those whose Of these, 37% were at the an employment multiplier payment of wages. chain and wage spending employment record attract home postcodes are outside University itself, 30% were impacts, are estimated to students from across the UK the district. in its supply chain, and the Fig. 13: The employment estimated to be supported by have supported a total tax and internationally. remaining 33% due to wage Birmingham City University in 2017/18, by expenditure channel contribution to HM Exchequer Each of these students has consumption impacts (see Fig. and geographical area of £112.0 million (Fig. 15). These students spend money a subtly different spending 13). The employment multiplier Of this, £56.3 million (or in the local economy on profile, however, the average at the national level was 2.7, People 50%) was generated in the housing, food, transport, subsistence expenditure per so for every 10 jobs at the 8,000 Birmingham local authority leisure and educational student, excluding tuition 2,360 7,060 University itself, it supports 7,000 area and another £13.3 million supplies. Given that in the fees, attending the University 1,020 another 17 around the rest of 6,000 1,960 (or 12%) in the rest of the absence of the University, was £11,970 per annum in the UK. 790 West Midlands. this localised spending 2017/18.20 This is primarily 5,000 2,120 550 1,100 would not have taken place, made up of housing costs 4,000 940 BCU is estimated to have 310 2.5 ‘ADDITIONAL’ STUDENTS’ we refer to it as ‘additional which make up 31% or £3,756 supported 5,100 jobs in the 3,000 870 EXPENDITURE IMPACTS expenditure’. The number of of their expenditure. This was West Midlands region in 2,000 4,000 additional students varies followed by 16% spent on 2017/18 (Fig. 19). This is 910 1,000 2,580 Birmingham City University’s depending on which of the travel and personal items. jobs or 22% higher than an 0 economic footprint extends three geographies we are earlier study’s estimate for the Direct Indirect Induced Total beyond the operational considering. For the UK, it is 17 19 year 2006/7 (Fig. 14). Looking and demand-led impacts all the international students. at the jobs supported in Birmingham 2017/18, 51% of these occurred at the University itself, Rest of the West Midlands region therefore BCU is estimated to Rest of UK Fig. 15: Tax receipts estimated to be supported by Birmingham City University in 2017/18, by have a regional employment expenditure channel and geographical area multiplier of 2.0. So for every Source: BCU; Oxford Economics 10 jobs at the University, it supports the same number £ m around the rest of the West Fig. 14 Number of jobs supported by the University’s expenditure 120 Midlands region through the in 2006/7 and 2017/18 46.0 112.0 Birmingham additional local income and 100 Rest of the West Midlands region People 30.8 local supplier purchases it 42.4 generates. 6,000 80 Rest of UK West Midlands region 9.3 Birmingham 25.2 6.0 The University’s expenditure is 5,000 60 11.7 13.3 4.0 also found to have supported 4,000 9.5 a total of 4,000 jobs in the 40 Birmingham local authority 3,000 56.3 5,100 20 40.8 area in 2017/18 (Fig. 19)—0.8% 2,000 4,000 4,190 18 of the area’s total that year. 3,140 0 This estimate is 860 jobs or 1,000 Direct Indirect Induced Total 27% higher than a previous 0 estimate for 2007/8. Some 2006/07 2017/18 2006/07 2017/18 65% of the jobs in 2017/18 were at the University itself, with Source: ECOTEC (2008), Oxford Economics Source: BCU; Oxford Economics

22 17 ECOTEC, (2008), ‘Birmingham City University impact study; A final report to Birmingham City University’, December. 19 We also factor in country of domicile. A student whose nationality is non-UK, but is domiciled here is not counted as additional. 23 18 https://www.nomisweb.co.uk 20 See Appendix 2 for the method used to calculate the average student’s subsistence spending. Birmingham City University’s Socio-Economic Impact Birmingham City University’s Socio-Economic Impact

2.5.1 Gross value added 2.5.2 Employment industrial sectors. Transport 2.6 ATTRACTING VISITOR Birmingham and generated and storage and hospitality SPENDING £0.7 million in tax revenues. Additional students are Student subsistence spending are the two largest employers Visitor spend also supported estimated to have spent supported an estimated 740 (Fig. 16). At the West Midlands The additional students an estimated 70 jobs in the £80 million at retail, leisure jobs in the Birmingham local region and UK levels, it is more attending Birmingham City Birmingham local authority and other outlets in the authority area. This grows to reflective of the location of the University attract family and area. The majority of jobs Birmingham local authority 1,840 jobs in the West Midlands supply chains and the location friends to visit them. These are supported in the service area. This stimulated output at region, before falling to 1,570 of staff who work in them and visitors are likely to undertake sectors such as retail and local businesses, supporting for the whole UK. The change the import intensity of each expenditure travelling to visit hospitality reflecting the an estimated total contribution in size of the estimates as industrial sector. the students, in the city’s typical consumption patterns to GDP of £62.9 million within the geographies get larger hospitality industry or at cultural of a visitor to the area. Birmingham. The equivalent reflects the offsetting effects of 2.5.3 Tax receipts attractions. By comparing figures for the West Midlands capturing more of the supply students’ home and term time region rose to £112 million chain and wage consumption Student subsistence spending postcodes, and assuming whilst the GDP contribution impacts, versus a smaller also generated £22.1 million in friends come from home we are for the whole UK was £95 number of additional students. tax revenues at the UK level. able to calculate the number million. The estimates reflect Of these, some £21.9 and £8.8 of additional friends or family not only the number of the At the Birmingham local million were stimulated in the visiting each area. additional students brought to authority level, the pattern West Midlands region and the area, but the share of the of employment tends to Birmingham local authority In January 2018, the Fig. 17: Visitor spending jobs impact in Birmingham local supply chains located in each reflect the additional students district, respectively. University hosted Open authority district in 2017/18 geography. spending pattern and the Days for prospective labour intensity of those students. These attracted Employment The industry in Birmingham 10,200 people. Similarly, the Accommodation & food services that benefited the most University hosted Graduation 6 from additional students’ Fig. 16: Employment supported by student subsistence spending Ceremonies which attracted 2 Retail & wholesale 3 nearly 5,600 people in the subsistence spending was by industry and Birmingham LAD in 2017/18 Transport & storage real estate, which is estimated 2018/19 academic year. 5 Total: to have produced £35.3 Again, we use postcodes 5 Education million in gross value added Headcount and country of domicile to 70 jobs 39 in satisfying students demand Transport & storage calculate how many will bring Arts & entertainment for accommodation. The ‘additional’ expenditure into 11 manufacturing industries’ (in 140 Accommodation & food services each of the geographies. Manufacturing 177 particular, food manufacturing) In total, visitors to students Other value added was £6.5 million Manufacturing from outside the city, or larger. The transport and Total: travelling to Open Days and 740 jobs Real estate storage industry was the third 54 132 Graduation Ceremonies are Source: BCU; Oxford Ecaonomics largest beneficiary of the Health estimated to have spent £3.0 54 additional student spend. The million in the Birmingham industrial breakdown of the 88 96 Retail & wholesale local authority district during growth in gross value added Other their stay. By combining data changes as the geographies on the expenditure on items considered get larger, as more purchased on visits, to data of the supply chain and wage on the industrial sectors consumption impacts are Source: BCU; Oxford Economics that supply the goods and captured. services it is possible to estimate visitor expenditure contributed £2.3 million in gross value added in

24 25 Birmingham City University’s Socio-Economic Impact Birmingham City University’s Socio-Economic Impact

2.7 SUMMARY OF TOTAL or £391.9 million of this 2.7.2 Employment Of this the tax revenues BCU ECONOMIC IMPACT activity occurred in the supported in 2017/18, 69% West Midlands region. This The expenditure undertaken and 49% were generated £531.7m Summing the expenditure was 0.3% of the economic by the University, its additional within the West Midlands 8,690 impacts of the University activity that occurred students and visitors is region and Birmingham local Gross value added contribution (Sections 2.2 to 2.4), its within the region. Firms in estimated to stimulate 8,690 authority district, respectively. Total number of jobs supported to UK GDP supported by BCU, students (section 2.5) and Birmingham local authority jobs across the UK (Fig. Split by type of expenditure, by BCU, its additional students its additional students and visitors visitors (Section 2.6), we can district benefitted by 19). Of these, 7,030 are in 83% of the tax receipts were and visitors across the UK in across the UK in 2017/18. estimate the total demand producing £285.8 million in the West Midlands region. stimulated by the University’s 2017/18. side impacts the University gross value added. This was They comprise 0.3% of total spending, with 16% by the creates in the Birmingham 1.0% of all of the economic employment in the region. subsistence spending of £285.8 mn or 54% of this local authority area, the West activity that occurred in the Some 4,800 of these jobs are additional students. 4,810 jobs or 55% of these economic activity occured Midlands region, and UK. district in that year. 21 in Birmingham. This is 0.9% were in the Birmingham local in the Birmingham local of total employment in the authority district. authority district. 2.7.1 Gross value added At the national level, £433.6 local authority.22 contribution to GDP million (82% of the gross value added stimulated) BCU’s own expenditure is In 2017/18, spending by the resulted from the University’s the dominant source of the Fig. 19: Jobs supported by the spending of the University, its University, its additional expenditure. Additional employment created across additional students and visitors in 2017/18, by expenditure students and their visitors is students’ expenditure all three geographies. At channel and geography estimated to have stimulated stimulated £95.2 million the national level, 7,060 of a £531.7 million gross value or 18% of gross value the 8,690 jobs or 81% were added contribution to UK added. Visitors spending stimulated by the University’s Jobs Birmingham West Midlands UK GDP (Fig. 18). Some 74% had a far smaller impact, own expenditure. 8,000 region stimulating an additional 7,060 Fig. 18: Contribution to Birmingham’s GDP supported by the £2.8 million of gross value 2.7.3 Taxation 7,000 spending of the University, its additional students and visitors, added. These proportions 6,000 2017/18 are similarly applicable The three sources of 5,100 for the University’s GDP expenditure stimulated 5,000 £ m Birmingham West Midlands UK contributions to Birmingham activity which generated 4,000 region 4,000 500 and the West Midlands. £134.8 million in tax receipts for HM Exchequer. To give an 450 433.6 3,000 indication of scale, this could 400 1,840 pay for operating expenses of 2,000 1,570 350 the Birmingham Healthcare 1,000 740 300 276.7 NHS Foundation Trust which 70 90 60 250 220.6 serves 1.2 million residents 0 200 across Birmingham, as well Total=4,810 Total=7,030 Total=8,690 150 as some services in the Black 112.1 100 95.2 Country and the wider West 62.9 Midlands for just over half the 50 year in 2017/18.23 Birmingham City University 0 2.3 3.1 2.8 Total=£285.8m Total=£391.9m Total=£531.7m Additional student spending Visitor spending Birmingham City University Additional student spending Source: BCU; Oxford Economics Source: BCU; Oxford Economics Visitor spending Note: Totals may not sum due to rounding

26 21 ONS, (2018), ‘Nominal and real regional gross value added (balanced) by industry’, 12 December. 22 ONS, (2019), ‘Business Register and Employment Survey: 2018’, 26 September. https://www.nomisweb.co.uk 27 23 Birmingham Community Healthcare NHS Foundation Trust, (2019), ‘Annual Report 2018-19’. Page 227.

Birmingham City University’s Socio-Economic Impact

3. BOOSTING THE PRODUCTIVE POTENTIAL OF BIRMINGHAM AND THE WEST MIDLANDS

One of the challenges the Fig. 20: Working-age resident population by educational Birmingham and wider West qualification in 2018 Midlands economy faces is low skill levels, relative to the UK average. Some 12% of Birmingham residents in % of resident population the 16-64 age group, and 10% aged 16-64 of the equivalent population of the wider West Midlands Birmingham 12% 16% 11% 19% 33% 9% region, have no formal educational qualifications at West Midlands region all. This is higher than the 8% 10% 19% 11% 19% 33% 8% across the UK as a whole (see Fig. 20). UK 8% 17% 10% 18% 39% 7%

At the upper end of the 0% 20% 40% 60% 80% 100% educational spectrum, 33% of residents of Birmingham and the West Midlands region No qualification of working age have been < 5GCSEs (A-C) (NVQ1) educated to the ‘NVQ4’ 5 GCSEs (A-C) + (NVQ2) level (i.e. they hold a Higher 2 A-levels + (NVQ3) National Diploma or degree), HND / degree + (NVQ4) this is six percentage points Other qualification below the national average at 39%.

The West Midlands Combined Source:ONS Annual Population Survey Authority’s Strategic Economic Plan identifies “improving [the] skills base and ensuring that businesses have access to the skills they require” as one of the challenges it faces.24

24 West Midlands Combined Authority, (2017), “Strategic Economic Plan”. Page 8 31 Birmingham City University’s Socio-Economic Impact Birmingham City University’s Socio-Economic Impact

3.1 PROVIDING SKILLS delivers to its students to the specific links. In addition, its The combined education, REQUIRED BY THE LABOUR needs of prospective future Graduate+ programme seeks work, and life experiences of MARKET employers. This is to ensure to enhance the employability BCU graduates make them that the continually evolving of undergraduate students highly employable. Of all 7th Birmingham City University skills needs of businesses are by providing them with those that graduated in 2017, works to boost the productive met, a central priority in the a personalised range of 94.3% were in employment or BCU ranking among all multi-faculty potential of the local economy. WMCA strategic economic extra-curricular activities, further study six months after universities for the proportion of its It does so by boosting the plan. It does this through a experiences and events receiving their degrees (Fig. full-time UK students in employment skill levels of its students, both variety of measures: degree to build their professional 22).25 Among UK full time or further study six months after through formal education, apprenticeships; business profile. This includes students graduating with a receiving their degree. helping them to obtain work input into course design; activities like part-time work first degree only, the figure is experience, and encouraging getting students to work on experience, volunteering and higher still at 97.4% placing them to participate in other live briefs for companies; community action. Birmingham City University 97.4% have a job or are activities that enhance their using industrial mentors and seventh across all the engaged in further study. knowledge set. As the majority encouraging them to go on multi-Faculty universities of graduates are retained work-based placements in the UK. This compares to within the area, this improves (see Fig. 21). 94.6% across the university the quality of the labour pool sector as a whole and is a available for local firms to hire. The University Careers+ higher percentage than any service that facilitates of the other universities in The University tries to interactions with business Birmingham, which had an maximise the relevance of its are co-located in each average of 93.1%.26 tuition and the experiences it Faculty to foster discipline

Fig. 21: Percentage of BCU graduates who had work experience, by type of experience (2018) Fig. 22: Destination of all the University’s graduates in 2017

Work Experience of greater % than 3 months 26.4% 92.6 96.9 99.9 100 86.6 89.8 94.3 94.5 Internships 0.2 2.4 3 7.1% 80 75.8 10.8 2.8 1.7 61.0 3.2 60 14.8 Volunteering/charity work 29.3% 40

Part-time work 58.3% 20 0 Placement Year 14.5%

0% 10% 20% 30% 40% 50% 60% 70% Other % of students Unemployed (& also work) (& also study) Primarily work Full-time work Primarily study Full-time study Part-time work Part-time study

Source: BCUCU survey, UK Trendence Research (725 students sampled) Due to start work

Source: HESA; Oxford Economics

32 25 Higher Education Statistics Agency, (2018), ‘Destinations of Leavers from Higher Education 2016/17’, 19 July. 33 26 Higher Education Statistics Agency, (2018), ‘Employment of Leavers 2016/17’. Birmingham City University’s Socio-Economic Impact Birmingham City University’s Socio-Economic Impact

Of all those graduating, Analysis of which industries Fig. 24: Share of BCU’s 2017 graduates working in fast growing industries in the West Midlands 80.9% went into graduate in the West Midlands region (2018 to 2023 forecast) level employment. If the focus region, the University’s 2017 69% is on full time students from graduates were working in the UK doing a first degree, six months after they left GVA growth Forecasted % of 2017 BCU Percentage of BCU graduates the figure is slightly lower at education shows that many forecast growth in graduates working who were in jobs or undertaking 80.7%. had gone into industries Sector 2018-2023 jobs* by 2023 in sector (4,189 tot) further study in the West that are expected to expand, Information and Midlands region A high proportion of BCU both in terms of gross value communication 21.5% 6,600 2.9% graduates continue to added and employment Human health and social work 10.2% 27,400 22.0% work and study in the West (Fig. 24). Some 22% had Professional, scientific Midlands region, thereby gone into human health and technology 11.1% 8,100 5.0% boosting the talent pool in and social work activities. Wholesale and retail 10.6% 10,700 7.1% the local economy and raising Another 17% worked in pre- Transportation and productivity. Six months primary, primary, secondary, storage 9.1% 19,800 0.8% after graduating, some 69% higher and other education. Real estate 9.8% 4,700 .8% of the alumni who were in The West Midlands region’s Construction 7.7% 14,600 1.8% employment or in further wholesale and retail industry *Forecast refers specifically to jobs in the West Midlands education were based in the and professional service West Midlands region (Fig. sector benefitted from 7% 23). This high percentage and 5% of the 2017 cohort of partly reflects the fact that graduates, respectively. Source: HESA, Oxford Economics 60% of BCU graduates originated from the region. 3.2 ENTREPRENEURSHIP projects with a variety of day bootcamps; receive EDUCATION organisations, or undertake ongoing support provided Fig. 23: Work location of the University’s 2017 graduates by region, six months after graduating freelance work. by enterprise teams at BCU; BCU also seeks to support obtain business grants of its students and graduates In partnership with Aston between £500 and £2,000; Percent who want to develop their and Newman universities and are offered free office/ enterprise skills and start and University College incubation space; and their own business. The Birmingham, BCU delivers mentoring support. 3.2 University’s courses leave the BSEEN project. It aims to graduates well placed to create additional jobs in the Across the three years West Midlands region work in industries where Greater Birmingham & Solihull (2016/17 to 2018/19) for 27.4 career paths follow less Local Enterprise Partnership which the project has run, Rest of UK traditional models (for (GBSLEP) area by equipping 133 BCU students and recent example, some Arts, Design students and graduates with graduates have participated. 69.4 International and Media routes). the skills, knowledge and Of these, 92 (or 62%) confidence required to start registered a business at As opposed to joining a a business. Companies House. company full-time after graduation and progressing Delivery of the project is in in a linear fashion, an two phases. First applicants increasing number of participate in introductory Source: BCU; Oxford Economics graduates find themselves in enterprise/entrepreneurship what are termed “portfolio workshops. Those selected careers”, whereby they work to continue to the second on a series of temporary phase go through five

34 35 Birmingham City University’s Socio-Economic Impact Birmingham City University’s Socio-Economic Impact

BCU has a high number of keeping firms and other 3.4 DRIVING BUSINESS strategy by offering advice graduate start-ups relative employers staff’s skills up to GROWTH AND on topics such as access to to the sector. In 2017/18, date. In 2017/18, the University ENTREPRENEURSHIP finance and the available 55 students and graduates delivered 66,152 days of CPD support network. 1,081 owned 147 active firms. Of training. Some, 57% of this The University provides a Number of BCU Graduate start- these, 58 had survived for at was purchased by range of other services to The University also offers Total Instances of business ups in 2017/18, more than any least three years. Some 55 non-commercial organisations. help drive business growth Knowledge Transfer support between 2016/17 other university in the West were started within the last This mostly reflects its Faculty across the city and wider Partnerships (KTP). Through and 2018/19 given by BCU Midlands region. year (2017/18). This exceeds of Health, Education and West Midlands. These are which a recently qualified to local firms. the number of start-ups in Life Sciences provision of largely promoted through BCU graduate, known as all 11 other universities in the ‘Professional Practice Courses’ its BCU Advantage business a KTP Associate, works West Midlands region (Fig. to healthcare professionals services website.27 This serves within the firm to deliver the This was delivered using £9 25), and the average for all UK (such as its district nursing as a first point of call for desired knowledge, research million of funding. universities: 22. training, midwifery, and businesses seeking to access and expertise, under the wound management support services operated by mentorship of one of the 3.3 UPSKILLING THE courses). A further 27% the University. University’s academics. In LABOUR FORCE THROUGH was paid for by commercial 2017/18, BCU successfully successful KEEN projects CONTINUOUS PROFESSIONAL firms, as diverse as large The extent of the University’s delivered 9 KTP projects, for local SMEs, which have DEVELOPMENT construction contractors, business support programmes and has won funding to ranged from helping an automotive manufacturers, is significant for the local undertake an additional 10 engineering firm to fully utilise BCU offers a range of architectural practices, legal area. Over the 3 years KTPs between 2018 and 2020. their data, to developing a accredited and non- and accounting firms. The from 2016/17-2018/19, the The University is continually self-sustaining business model accredited continuous remaining 16% was purchased University delivered 10 engaging with business in for a social enterprise involved professional development by individuals. business support projects order to expand their portfolio in mental health. (CPD) courses, aimed at with a combined value of of KTPs in order to maximise £9.0 million to the region. the impact of the University’s From these initiatives over the knowledge and research. Fig 25: Number of graduate start-ups registered by universities in the West Midlands in 2017/18 same time period, companies received 1,081 instances of BCU also operates a business business support, with SMEs improvement programme Number benefiting from 10,215 hours called Knowledge Exchange 60 of expert assistance. This and Enterprise Network 50 support aided in the creation (KEEN), through which SMEs of 16 new products or services in the West Midlands can gain 40 to market, as well as allowing access to a skilled graduate 30 55 for the expansion of the to work on a project with 20 44 43 35 participant business offerings the business for a period of 32 30 27 10 with existing products. between 6 and 24 months. 12 0 0 The SME and graduate are In partnership with GBSLEP, supported by a designated BCU forms part of the local university liaison officer,

Others Growth Hub providing mentorship for the graduate Warwick

University University business, support or guidance from university experts, and Worcester Birmingham

University of University of University of University of to local SMEs. The University’s access to BCU’s facilities Staffordshire SME Growth Service gives and expertise to ensure that Wolverhampton Aston University Birmingham City small firms access to its the programme can meet

Coventry University business specialists, analysts the needs of the business. and advisers. It aims to Between 2018 and 2019, Source: HESA enhance their business the University delivered 10

36 27 www.bcuadvantage.co.uk 37 Birmingham City University’s Socio-Economic Impact

3.5 STEAMHOUSE – STEAM by supplying over 6,500 local SMEs to take advantage INNOVATION FACILITY hours of support, £50,000 in of the facilities, with the grants to SMEs in 2019, and potential to encourage The typical STEM has entered into 24 research investment in an area that has designation covers Science, collaborations. previously been limited by Technology, Engineering, and access to the types of services Mathematics. The concept 3.5.1 Future developments now offered by STEAMhouse. behind STEAM is that the skills associated with the arts Since opening in May 2018, Whilst many of the benefits can combine with those of Phase 1 of the STEAMhouse of this type of facility will traditional STEM disciplines project has delivered a become increasingly apparent to spur innovation. STEAM- valuable and well-utilised over time as more SMEs take thinking can lead to new and service to local innovation and advantage of the services innovative ways to generate product development, but offered, STEAMhouse is solutions. given the demonstration of already building a reputation its value, there was scope to for its research and innovation STEAMhouse, a facility expand its offering. In 2019, work. Since inception, 10 new provided in collaboration STEAMhouse Phase 1.5 created projects worth £11 million in with Eastside Projects, is a greater focus on digital grants have been secured the University’s pioneering enabling technologies by for the delivery of STEAM centre for creative innovation. adding a virtual reality space innovation. In addition, a The University helps SME’s and Computer Aided Design further 7 projects are planned to build their businesses, (CAD) suite to the facility, for the future, featuring a develop new products and increasing its capability to combined grant value in services and collaborate. It accelerate product design. excess of £12 million. does so by providing creative entrepreneurs and start-up Following this, Phase 2 3.6 BCU’S CULTURAL IMPACT companies with free access of the project will see the to specialist equipment and STEAMhouse move to its In addition to its economic expertise including purpose- permanent home, at Belmont impacts, Birmingham built prototyping spaces, Works. This investment of City University makes a materials, and support from around £60 million, including significant contribution to skilled technicians. The £15 million in grant funding, the city’s cultural fabric. STEAMhouse also provides will see the renovation of the The Conservatoire’s five a venue for workshops, disused Belmont Works in performance spaces have networking events, and other Eastside. Shared with the BCU recently featured world business support services. school of Computer Science, superstars including the this building will provide a soprano Danielle de Niese, The STEAMhouse project larger-scale collaborative flutist James Galway, cellist aims to boost local centre with better facilities Sheku Kanneh-Mason, and growth, achieving this and additional space. This saxophonist Jess Gillam. The by removing cost and will allow STEAMhouse to University’s Vittoria Street equipment access barriers facilitate a greater number Gallery hosts exhibitions and to the development of new and variety of SMEs, all whilst events spanning the breadth products and services, and being located closer to the of the jewellery discipline, encouraging experimentation. expertise represented by BCU plus other art and design STEAMhouse has helped academics and researchers. practices; whilst the University SMEs to bring new products This expanded offering will also partners with Eastside to market, achieving this also allow a wider range of Projects, an artist-run space

38 Birmingham City University’s Socio-Economic Impact Birmingham City University’s Socio-Economic Impact

BUSINESSES THAT HAVE BENEFITTED FROM STEAMHOUSE that is open to the public as an outreach event attendees New Art West Midlands art and sculpture gallery. were young people, with annual exhibition, where the Junior Conservatoire’s students in the final year of The University promotes learning and participation their degree programmes culture and learning to a programme reaching in excess have the chance to display wider audience through of 4,500 young musicians their creative works, with the public events, including and countless numbers of opportunity to be selected to public lectures, exhibitions, audience members through a display their work in galleries and artistic performances. variety of musical activities. across the West Midlands. In 2017/18, BCU held The running of these cultural events with 513,000 events also highlights the Staff also enhance the city’s attendees. Of these, 451,000 importance of volunteering cultural offering in notable people attended free to the cultural engagement other ways, such as sitting exhibitions, which include activities at BCU, with staff on the boards of many of galleries and museums. In volunteering 192 days of its entertainment venues, Balfour Beatty Vinci (BBV) boosting innovation and the the same year, the University their time towards hosting such as the Hippodrome international competitiveness presented free public Conservatoire events in theatre, DanceXchange, An example of how more of local firms. lectures to around 17,300 2017/18. and Birmingham Big Art established businesses can people. These events provide Project. Staff also serve as use STEAMhouse to stimulate Hausbots the opportunity for new Birmingham City University academic advisors to the innovation, can be seen in experiences to anyone who is the lead partner and city’s museums, such as the the case of Balfour Beatty Hausbots (pictured), a wishes to attend, without host of New Art West recommendations offered Vinci (BBV). In order to meet company that has created the addition of monetary Midlands28 (NAWM), a to Birmingham Museum and the scale and complexity robotic systems for painting barriers to entry. The events contemporary visual arts Art Gallery on how to appeal demands of their proposed large vertical surfaces, is an are made possible, in part, network for artists and more to a Birmingham-based role in the UK HS2 high-speed effective example of how by the University’s staff, who creators. This aims to demographic. Staff and rail project, BBV looked to STEAMhouse can enable contributed a total of 2,198 “strengthen and develop the students were involved in the BCU for help. STEAMhouse product development. Using days of their time towards contemporary visual arts “Face of Suffrage” artwork hosted a collaborative event, the resources and facilities providing these opportunities sector in the West Midlands”. unveiled at Birmingham New referred to as a “STEAMlab”, provided by STEAMhouse, over the last four years Established in 2010, NAWM Street Station in November where individuals with Hausbots was able to take (2014/15 to 2017/18). is a collaborative initiative 2018, and volunteer widely— expertise from a wide their product from garage between BCU, Coventry for example, helping to put on range of backgrounds prototype, to developing an The Royal Birmingham University, the University the city’s free arts festival, the come together to generate effective robotic solution that Conservatoire is a fine of Wolverhampton, and the Birmingham Weekender. potential solutions. This event allows for the easy painting or example of the cultural University of Worcester, produced the beginnings coating of large exterior walls, work undertaken by BCU. In and represents a regional of a new intelligent traffic or areas that are traditionally 2017/18, the Conservatoire part of the nation-wide congestion management difficult for humans to access, hosted 414 events of a wide- Contemporary Visual Arts system which could model such as areas in proximity ranging nature, which were Network, initiated and funded the flow of traffic and its to hazardous materials. Their attended by 31,710 people. by the Arts Council England. impact in real time, allowing products could also allow The Conservatoire’s outreach This initiative provides a for the potential minimisation for insulating coatings to events included the Eighty space where members of of the project impacts on the be applied to less modern Eight Pianists project, where the creative community communities surrounding HS2 buildings with exposed primary school students can share or discover new development. It is complex brickwork, improving designed mechanisms to allow opportunities, engage with technological solutions like energy efficiency. 88 people to play one piano local news in the sector, and this, that the STEAMlab at once, achieving a world find out about events in the events can be most effective record in the process. Indeed, area. Additionally, NAWM at facilitating, further 26.5% of the Conservatoire’s organises and curates the

40 28 http://newartwestmidlands.co.uk 41 Birmingham City University’s Socio-Economic Impact

4. CONCLUSION

Birmingham City University The University provides The University also has a (BCU) makes substantial extensive business support positive impact on culture, economic, cultural, and social programmes for local firms. creativity, and the arts in contributions to Birmingham Over the three years from Birmingham and the West and the wider West Midlands 2016/17-2018/19, it delivered Midlands. This is demonstrated region. Together, these 10 business support projects by the scale of University’s support its vision of being the with a combined value of cultural events, including University for Birmingham. £9.0 million. From these those run in collaboration with initiatives, companies received the New Art West Midlands In 2017/18, spending by the 1,081 instances of business programme, which were University, its students, and support, with SMEs benefiting attended by more than half their visitors supported a from 10,215 hours of expert a million people in 2017/18. In total gross value added assistance. This support helped addition, BCU is responsible contribution to Birmingham’s bring 16 new products and for the Royal Birmingham GDP worth £286 million— services to market, as well as Conservatoire, which supports around 1.0% of the local area’s allowing for the expansion music and engages young total GDP. BCU also stimulated of the participant business people in the arts with its 4,810 jobs within Birmingham offerings with existing outreach activities. in that financial year. Across products. the rest of the West Midlands, These combined impacts it supported an additional £106 BCU fosters innovation across clearly demonstrate that million contribution to GDP, the Birmingham and wider Birmingham City University and 2,220 jobs. Therefore, West Midlands economies. makes a substantial in the whole West Midlands Through initiatives such as contribution to the prosperity region, it supported a £392 STEAMhouse and BSEEN, and culture of Birmingham, the million contribution to GDP, as well as the University’s West Midlands, and the United and 7,030 jobs. knowledge transfer activities Kingdom as a whole, both such as knowledge transfer through its own activities and BCU also makes a positive partnerships and intellectual its extensive collaboration with contribution to the productive property licensing, BCU other parties. Many of these potential of the local and supports local enterprise from are long-term impacts which regional economies, by its inception, and provides will carry benefits to the enhancing the human capital local businesses with the tools region for years to come. of the future local workforce. and knowledge they need to In 2017/18, 60% of its students grow to their full potential. were drawn from the West Midlands region. Six months after graduation, 69% were employed or in full time study in the West Midlands region. BCU also helps enhance the skillset of the region’s existing workforce, delivering 66,152 days of continuous professional development training that year.

43 Birmingham City University’s Socio-Economic Impact Birmingham City University’s Socio-Economic Impact

APPENDIX 1: ECONOMIC APPENDIX 2: METHODOLOGY IMPACT ACROSS THREE FOR CALCULATING BCU’S GEOGRAPHIES MULTIPLIER IMPACTS The tables below show the economic impact results calculated for Birmingham local authority district, the West Midland’s region and the whole of the UK. The results are larger the bigger Direct impact the geographical area considered, as more of the supply chain and wage spending impacts are captured. Our estimate for the gross value-added contribution to GDP generated by Birmingham City University is the sum of its surplus and employee compensation. This approach, the income Gross valued method, is consistent with the principles of national accounting. Direct employment is the average Fig. 26: Economic impact results for Birminghamadded in 2017/18 contribution monthly number of employees, including the Executive Group, sourced from the Report of the Grossto GDP valued Board of Governors and Financial Statements. (£ m) Birmingham added Grosscontribution valued The University itself (direct) 165 2,580 41 Direct labour taxes, including income tax, and employee and employer NICs, have been estimated toadded GDP Birmingham (£ m) using University employee compensation data from the University and HMRC data on tax allowances Its supply chain (indirect) contribution31 870 10 to GDP and receipts. Due to its charitable status, the University does not pay any corporation tax. Its The wage University payments itself (induced) (direct) (£16524 m) 2,580550 416 Birmingham AdditionalIts supply chain Student (indirect) Spending 6331 740870 109 The University itself (direct) 165 2,580 41 Indirect and induced impacts VisitorIts wage Spending payments (induced) 242 55070 61 Its supply chain (indirect) 31 870 10 The modelling for this study made use of Input-Output tables, as published by the ONS.29 These TotalAdditional Student Spending 28663 4,810740 669 Its wage payments (induced) 24 550 6 data are the most detailed official record of the economic links between different parts of the UK Visitor Spending 2 70 1 Additional Student Spending 63 740 9 economy, and with the rest of the world. Oxford Economics use these tables to develop bespoke Total 286 4,810 66 Fig.Visitor 27: Spending Economic impact results for theGross West valued2 MidlandsEmployment70 regionTax revenue1 in 2017/18 sub-regional models to capture the local economic impact of the University. added (people) (£ m) Total contribution286 4,810 66 Grossto GDP valued Employment Tax revenue Our methodology utilises so-called ‘Flegg-adjusted Location Quotients (FLQs)’, which are (£ m) 30 West Midlands region added (people) (£ m) consistent with the latest approaches and evidence in regional I-O modelling. Employment data Grosscontribution valued Employment Tax revenue from the ONS’ Business Register and Employment Survey (BRES) were used to adjust the I-O The University itself (direct) 165 2,580 41 toadded GDP (people) (£ m) West Midlands region (£ m) tables, to reflect the industrial structure and productive capacity of Birmingham local authority Its supply chain (indirect) contribution48 1,180 14 to GDP district and the West Midlands region. Its The wage University payments itself (induced) (direct) (£16564 m) 2,5801,340 4115 West Midlands region AdditionalIts supply chain Student (indirect) Spending 48112 1,8401,180 2214 Oxford Economics’ impact models quantify purchases along the entire length of the University’s The University itself (direct) 165 2,580 41 supply chain, and that of the consumer businesses supplying goods and services to additional VisitorIts wage Spending payments (induced) 643 1,34090 151 Its supply chain (indirect) 48 1,180 14 students and visitors. The regional models estimate the extent to which these demands can be TotalAdditional Student Spending 392112 7,0301,840 9222 Its wage payments (induced) 64 1,340 15 met in the city and region, and the leakages in and out of the local area. Visitor Spending 3 90 1 Additional Student Spending 112 1,840 22 Total 392 7,030 92 The transactions along the supply chains are translated into gross value added using West Visitor Spending Gross valued3 Employment90 Tax revenue1 added (people) (£ m) Midlands specific ratios of value-added to gross output derived from the ONS’ Annual Business Total contribution392 7,030 92 Survey.31 The impact on employment was modelled using the latest data on output per head in the Fig. 28: Economic impact results for theGrossto UK GDP valued in 2017/18Employment Tax revenue (£ m) industrial sectors for the West Midlands, derived using BRES. UK added (people) (£ m) Grosscontribution valued Employment Tax revenue The University itself (direct) 165 2,580 41 toadded GDP (people) (£ m) Taxes were estimated using HMRC data on tax allowances and receipts, along with statistics on UK (£ m) Its supply chain (indirect) contribution111 2,120 25 average profitability of each UK sector derived from the I-O tables, the average wage rates seen in to GDP Its TheUK wage University payments itself (induced) (direct) (£165157 m) 2,3602,580 4641 these sectors (from the ONS’ Annual Survey of Hours and Earnings), and the indirect employment supported within them.32 AdditionalIts supply chain Student (indirect) Spending 95111 1,5702,120 2522 The University itself (direct) 165 2,580 41 VisitorIts wage Spending payments (induced) 1573 2,36060 461 Its supply chain (indirect) 111 2,120 25 Induced impact TotalAdditional Student Spending 53295 8,6901,570 13522 Its wage payments (induced) 157 2,360 46 Visitor Spending 3 60 1 The induced impact is modelled in a similar way. Using wage and postcode data supplied by the Additional Student Spending 95 1,570 22 Total 532 8,690 135 University, Oxford Economics used household spending data from the I-O tables to model the Visitor Spending 3 60 1 typical spending profile of University staff living in Birmingham and the West Midlands, making Total 532 8,690 135 allowances for ‘leakages’ of imports and savings.

29 ONS, (2018), ‘United Kingdom input-output analytical tables, 2015’, 2 March. 44 44 30 Flegg, A, Webber, C, and Elliot, M, (1995), ‘On the appropriate use of location quotients in generating regional input- 45 output tables’, Journal of Regional Studies, Volume 29, Issue 6, pages 547-561. 31 ONS, (2019), ‘Non-financial business economy, UK and regional (Annual Business Survey): 2017 revised results’, 16 May. 32 ONS, (2019), ‘Earnings and hours worked, industry by four-digit SIC: ASHE Table 16’, 29 October. Birmingham City University’s Socio-Economic Impact Birmingham City University’s Socio-Economic Impact

For workers in the supply chains, we used industry-specific ratios of employee compensation per Visitors from overseas unit of output, sourced from the I-O tables, to forecast how much household wages are supported among suppliers’ workers. Both spending streams were fed into our I-O models, to calculate The ONS’ International Passenger Survey (IPS) provides detailed data on the spending of the total impact of this spending. Taxes were calculated using the same methodology as for the international visitors to the UK and its nations and regions, disaggregated by nationality of the indirect impact. visitor. To estimate the spending of visitors to students, data on the spending of those visiting friends and relatives in the West Midlands were used. The pattern of spending was taken from International students’ subsistence spending ONS data on the regional value of tourism.

Birmingham City University attracts students to the local area from other parts of the UK, and University data indicate how many students from other countries were living in the city and wider the world, and keeps students previously resident in the locality who would have otherwise gone West Midlands in 2017/18. The ONS, Annual Population Survey (APS) data for 2017 indicate how elsewhere. The subsistence spending of these students would not otherwise occur in the city and many people of each nationality there were living in the West Midlands. Therefore, the share region and therefore forms part of the overall impact of Birmingham City University. of all spending by visitors from each nationality to the region is attributed to Birmingham City University and assumed to have been spent predominantly in the local area. Subsistence expenditure refers to all student spending on goods and services except for tuition fees. It includes, for example, the purchases of items required for facilitating their study—such as Domestic visitors transport to the University and required books—as well as other consumer expenditure—including on food, leisure, and social activities. Payments to the University for accommodation, food, and The University’s home students also attract visitors. Although no information is available on how other services are removed so as not to double count. many visitors each additional student receives, data do exist on the average spend of a visitor from each part of the UK to friends and relatives in the West Midlands.35, 36 The Department for Education publishes data on subsistence expenditure by students in England and Wales.33 The latest available covered the 2014-15 academic year. This study focuses on home- This study assumes that each student from outside the West Midlands gets one visitor from their domiciled students, however we follow BEIS’ assumption that international students’ spending is home region each year. With the likelihood that some students receive multiple family and friend not significantly different to home students’. visits during an academic year, and that parents are often involved in the transport of personal effects at the beginning and end of session, this is probably a very conservative assumption. Oxford Economics adjusted the average student spend using the ONS’ Consumer Price Index to reflect the increase in living costs between 2014/15 and 2017/18. We further adjust the spending Graduation ceremony visits to reflect the difference lengths of academic years for undergraduate and postgraduate students, and the fact that international students likely go home less frequently than their UK equivalents.34 Birmingham City University hosted graduation ceremonies in January and July 2018 which were attended by 5,700 graduands and their guests. Many of these graduands and their guests will After these adjustments, the average student at Birmingham City University spends £11,970 per have travelled from across the UK, and overseas, to attend the ceremony. Graduating students’ year off campus, including housing costs. origins were estimated using data on the composition of current students’ home locations. The spend of international and domestic graduation attendees was calculated following similar To calculate how much expenditure Birmingham City University brings into the area, it is methodologies to those used for visitors to current students. It was assumed that students from necessary to calculate the number of ‘additional’ students. To do so, Oxford Economics compared outside of the West Midlands stayed one night. students’ term time and home time locations. This allowed us to firstly identify how many students live in the city and region, respectively, and how many of those are truly ‘additional’. Open day visits

Visitors to students In January 2018, Birmingham City University hosted open days which were attended by over 3,000 prospective students. On average, it is assumed that for every 100 students attending, a The additional visitors the University attracts to the city and region come from other parts of the further 150 guests (including family members) will also have travelled to the University. People UK and overseas. The spending profile of the two types of visitors—domestic and international— travelling from outside of the West Midlands were assumed to incur a day’s spending. The differs by their origin. Therefore, two methods are used to calculate their spending impact. domicile of open day guests was estimated based on postcode information. Additionally, alternative spending profiles are used for open day attendees and graduation ceremony guests, depending on their origin.

46 33 Department for Education, (2018), ‘Student income and expenditure survey 2014 to 2015’, 22 March 35 Kantar TNS, (2018), ‘The Great Britain day visitor 2017 annual report’, 11 December 47 34 Department for Business Innovation and Skills (now Department for Business, Energy and Industrial Strategy), “Estimating the 36 Kantar TNS, (2018) ‘The GB tourist 2017 annual report’, August. value to the UK of education exports”, BIS Research Paper Number 46, June 2011. ABOUT OXFORD ECONOMICS

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