The socioeconomic impact of Ireland’s universities is enormous in terms of jobs, research and exports.
The economic impact of Ireland’s seven universities is estimated at €8.9bn per annum, according to what is claimed by Indecon to be the first socioeconomic impact research undertaken on the role Irish universities play in the economy of the country.
The report revealed that the seven universities generate €386m a year in export earnings, for example, and €1.5bn in R&D.
‘The Indecon report shows that more State investment in university education isn’t just the right thing to do, it’s the profitable thing to do’
– JIM MILEY
To compile the report, Indecon research economists were appointed by the Irish Universities Association (IUA), following a competitive tender process, to cover the combined impact of the seven universities represented by the IUA: Dublin City University, Maynooth University, NUI Galway, Trinity College Dublin, University College Cork, University College Dublin and University of Limerick.
“There has been much debate over the economic return university education generates in Ireland without any rigorous scientific analysis of the actual impacts,” said Prof Brian MacCraith, chair of the IUA and president of DCU.
“This vacuum has not served the debate well and I am pleased to say that we have now got a detailed independent assessment on the impact Irish universities have on our society, our economy and on us as individuals.”
A fair point. So, what have we learned from this landmark study?
Graduates are an economic powerhouse
Indecon estimates a net gain of €1.6bn to the economy from the net earnings of graduates of Irish universities between 2017 and 2018. On average, the Irish exchequer gains €62,000 over the lifetime of the average graduate.
The research revealed that university graduates generate more income than those with no third-level education and have consistently lower unemployment rates, even during recessions.
The average lifetime net premium for an undergraduate degree holder is €106,000 compared to a UK premium of £88,000 for graduates from the prestigious Russell Group universities.
Master’s degree holders’ net premium rises to €146,000 and PhDs’ to €222,000. These figures are net of tax and factor in the costs incurred by students in obtaining their degrees and income foregone during their years at university.
“Ireland has a more highly educated population than the EU average, which is often cited as a key reason both multinational organisations and indigenous enterprises base operations here,” added Alan Gray, managing director of Indecon.
R&D is a cash cow for the Irish economy
According to the Indecon research, Irish universities make up a total research impact of €1.5bn to the economy.
This breaks down into €632m from direct research expenditure, a €373m spillover impact of university-based research on the wider economy, and €526m from indirect and induced effects.
“What is certain from the report is the significant positive impact Irish universities are having, from the €8.89bn contributed annually to the Irish economy, to the 21,801 full-time jobs supported, including 15,724 directly employed,” MacCraith said.
Overseas students are a substantial export market for Ireland
Indecon estimated that between 2017 and 2018, there were 16,701 full-time international students living in Ireland.
It estimated that the total annual export income generated for the Irish economy from international students is €386m.
Despite the economic impact, our universities are at capacity and need investment
“The 50pc increase in student enrolments since 2000 is a precursor to an even greater demographic bubble, which will place an intolerable strain on the already underresourced university system,” MacCraith warned.
“Unless the Government and the broader political community are prepared to deliver a sustainable core funding solution, the opportunities afforded to today’s students may be curtailed for many current and future primary and secondary students. As a society, we cannot let this happen.”
Jim Miley, director general of the IUA, agreed and said that what needs to be recognised is the role of universities in producing well-rounded, employable graduates, and to provide centres of innovation through their research work.
“The Indecon report shows for the first time that universities not only do that, but also generate a cash surplus for the State over the long term. This surely provides a compelling case for the Government and the Oireachtas to prioritise the reform of the funding model for higher education.”
Miley said that we are approaching 1,000 days since the Cassells Report from the Government-appointed expert group, which identified the scale of the funding gap for higher education and made clear recommendations about dealing with it.
“The Indecon report shows that more State investment in university education isn’t just the right thing to do, it’s the profitable thing to do.”