£15.7 billion. This was the University’s net contribution to the UK economy in 2018-19, according to the economic research consultancy London Economics. Initially it seems shockingly large how one single institution can contribute so much in one year. I could never imagine this amount of money, so much so that I had to double check the number of zeros you add on to a billion. It’s nine.  

The University’s total operational costs in 2018-19 were £2.6 billion, making the net economic contribution £13.1 billion and the benefit to cost ratio of 6.1:1. To put this into perspective, Frontier Economics found that the economic impact generated by all English universities, including the international students and visitors they attract, was over £95 billion of gross output in 2018-19. To compare this with other universities across the country, the economic impact of the University of Birmingham was £3.5 billion in 2014-15, the University of Nottingham contributes £1.1 billion each year, and Durham £1.1 billion.

So where, then, does Oxford’s £15.7 billion come from? The London Economics report splits the economic impact of Oxford University into 5 groups. Research and knowledge transfers account for £7.9 billion, unsurprisingly the largest amount of the groups. At Oxford, every £1 invested into university research and knowledge exchange activities generates £10.3 in return for the UK economy.

Research impact was calculated using information about research grants and contracts. At £771 million, the University’s recurrent funding from Research England was the largest research income received by any university in the UK that year. By using an economic multiplier, a factor which is applied to the measures in all 5 groups to account for the estimated direct, indirect, and induced impacts, LE estimated that the direct impact attributable to Oxford’s research was £4.5 billion.

Knowledge exchange refers to income from intellectual property licencing, the turnover from the 168 spinout companies that are partly owned by Oxford University, and the turnover form the 32 companies in the Begbroke and Oxford Science Parks (excluding 27 Oxford spin-outs to avoid double counting). These activities generated an estimated £3.4 billion of economic impact across the UK in 2018/19.

Teaching and learning activities account for £422 million. These financial benefits are explained by the enhanced earnings that graduates benefit from, and as a result the additional tax received by the Exchequer. In August 2021 Ezra reported that graduates from the University of Oxford have the highest average graduate salary, of £34,802, 45% more than the national average. Students’ enhanced earnings and consequential increase in tax payment each make up about 50% of the £422 million.

Educational exports are the third group, making up £732 million. London Economics only considered the impacts generated by the tuition and non-tuition fees of international students, because fees paid by domestic students contribute to the UK economy, regardless of the chosen university. 

The operating and capital costs of the University (80% of the total) and its colleges (the remaining 20%) account for £6 billion of the £15.7 billion. Tourism accounts for £611 million of the University’s input into the UK economy. Considering only overnight stays from overseas visitors, they estimate about 407,000 out of the 577,000 visitors to Oxford were associated with the University’s activities.

Since the academic year 2018-2019, Oxford has been world leading in COVID-19 research, creating the AstraZeneca vaccine, which aims to have delivered 3 billion doses across the globe by the end of 2021. What we now need is another report on Oxford’s economic impact. I imagine its contribution to the UK Economy will be a lot higher for the year 2020- 21, and the split between the 5 groups of impact may be quite different.

At this point I took a moment to indulge myself, feeling grateful for studying in such a beautiful city, full of rich history and incredible people. The £15.7 billion is starting to make sense now; maybe it isn’t so surprising. After all, the University of Oxford has been a research and learning hub for over 900 years, always pushing academic boundaries. Its staff, students, and alumni have transformed lives in the UK and globally. To contextualise, the seemingly large £15.7 billion is dwarfed in comparison to the UK’s GDP in 2018 —£2.1 trillion. The University, as lauded as it is, only made up about 0.007% of the UK economy. 

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