THE ECONOMIC IMPACT of INTERNATIONAL STUDENTS in WALES November 2015 Ursula Kelly Iain McNicoll James White Viewforth Consulting Ltd Table of Contents Summary ............................................................................................................................................... 2 1. Introduction .................................................................................................................................... 3 Background to the study ................................................................................................................. 4 Methodology and data sources ...................................................................................................... 4 2. International students in Wales .................................................................................................. 6 Profile and characteristics of student population ......................................................................... 6 Non EU students at Welsh Universities ........................................................................................ 9 EU students studying in Wales .................................................................................................... 11 3. International Students and the Welsh Economy ................................................................... 12 International Export Earnings ....................................................................................................... 12 Estimates of money paid to the universities by international students .................................. 12 Estimates of off-campus personal expenditure ......................................................................... 12 4. Modelling the economic impact of international students .................................................... 14 Modelling International Student Expenditure ............................................................................. 14 Impact generated through the payments made to the universities by international students .......................................................................................................................................................... 15 Impact generated through the off-campus expenditure of international students ................ 16 Overall Impact on Wales of international student expenditure ................................................ 17 Per Capita Student Impact ............................................................................................................ 18 5. Additional impact of visitors to international students ........................................................... 21 Total Overall Impact of international students and visitors ...................................................... 22 6. Distribution of economic impact across Wales ...................................................................... 23 7. Conclusions and reflections ...................................................................................................... 29 Appendix One: Methodology and data sources ............................................................................ 30 Appendix Two: References and Bibliography ................................................................................ 32 Appendix Three: Students included in the study ........................................................................... 33 Appendix Four: List of Figures and Tables .................................................................................... 34 1 Summary This report presents analysis of the economic impact on Wales of International students studying at the 8 universities in Wales during the academic and financial year 2013/14. The study examines the impact of international student spending on the economy and its generation of jobs, output and Welsh GVA. The study also considers the additional spending of short term international visitors associated with international students – i.e. visiting family and friends of students. The analysis presents the impact of both EU and Non-EU students on the Welsh economy. Results are presented of the overall impact on the economy and also the per-capita impact of EU and Non-EU students. It also analyses and presents the distribution of overall economic impact across Wales. Key findings Overall the report shows the significant and positive economic benefit to Wales of hosting international students. Export Earnings International students and their visitors spent £530 million in 2013/14. This was equivalent to 4% of all 2014 Welsh exports. Jobs The spending of international students and their visitors generated over 7,600 full time equivalent jobs in Wales. While a large part of the impact was felt in the areas immediately surrounding the universities, jobs were generated right across Wales. One Welsh job was generated for every 3 Non-EU students in Wales. One Welsh job was generated by every 5 EU students in Wales. Output Industry output is, broadly speaking, equivalent to an Industry’s turnover or income. The expenditure of international students and their visitors generated £773 m of output in industries across Wales. Every Non-EU student generated £33k of output in Welsh industries Every EU student generated £19.7k of output in Welsh industries. GVA GVA or Gross Value Added, is a measure of the net wealth generated in the country. The spending of international students and their visitors generated nearly £400 million of Welsh GVA – which was equivalent to 0.8% of 2013 Welsh GVA. Every Non-EU student generated £17.1k of GVA in Welsh industries. Every EU student generated £9.8k of GVA in Welsh industries. Regions of Wales The analysis showed that impact flowed across Wales including to areas that do not have a university presence. 2 1. Introduction The role that Welsh Universities play in the economy is now well recognised, both in terms of their immediate economic impact creating jobs and contributing to GDP but also in the longer term contribution that teaching and research makes to strengthening the skills base and supporting innovation in Wales. When setting out its international agenda for Wales in 20151 The Welsh Government has also highlighted that universities can provide an additional opportunity to strengthen and extend Wales’ international presence. The Universities are globally connected institutions, with research links stretching across the world. They also attract students from abroad. In 2013 the Welsh Universities attracted over 25,000 students from 145 countries to come to study in Wales. This creates potential to strengthen cultural and economic links between Wales and all of the originating countries. Active alumni networks help make such benefits a lasting phenomenon, attracting alumni back to Wales and building international links. Encouraging domestic students to develop an international outlook is also important, with Universities encouraging domestic Welsh students and staff to participate in international exchange and research collaborations. The policy attention paid to international students is part of a broader agenda of internationalisation, which focusses not only on student mobility but also on ensuring that international perspectives become part of the normal learning processes in higher education. This has been driven by awareness on the part of universities of the need for students to learn to compete in a global economy as well as to develop broader cultural understanding. The presence of international students can be an important element in building international perspectives among domestic students as well as being mutually beneficial to both domestic and international students in building longer term cultural awareness. At a broader level, in terms of national interest, it is also increasingly acknowledged that international education, student mobility and research links are an important element in supporting the development of ‘soft power’ – broader and longer term international influence2. However while the development of longer term global links and presence is a major benefit of attracting international students, there is also a more immediate impact on the economy, which reaches right across the country. International students have an important and immediate impact on the Welsh economy. As well as paying tuition and other fees to the universities, students spend money off-campus, for example on housing, food, travel and entertainment. They can also attract additional short stay leisure visitors from abroad (parents, relations, and friends) who spend money on 1 Wales in the World: The Welsh Government’s International Agenda (2015) 2 See , for example, ‘As Others see us’ Culture, Attraction and Soft Power British Council 2012 http://www.britishcouncil.org/sites/default/files/as-others-see-us-report-v3.pdf 3 hotel accommodation and local amenities. All of their spending creates jobs in Wales and contributes to Welsh GDP. The off-campus personal expenditure of students and visitors is equivalent to over 7% of the spending of all visitors to Wales3. This is the primary focus of this study. A similar study of the impact of international students in Wales was previously undertaken in 20114. This study seeks to provide and up-to-date and extended analysis of the impact of international students. Background to the study This study was undertaken during summer 2015 for Universities Wales. It presents analysis of the economic impact on Wales of International students studying