ISBE Director’s Blog – ISBE goes to Europe

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ISBE goes to Europe*

It is ironic that the organisation of the annual ISBE conference on continental Europe for the first time coincides with a changing relationship between the United Kingdom and the European Union. The announcement earlier this week by Prime Minister Theresa May that she will trigger Article 50 next Spring means that by March 2019 the UK will no longer be a member of the EU. This decision will have potentially significant consequences for the higher education sector in the UK, including a large number of ISBE members. UK universities are highly integrated within the EU. There are 125,000 non-British students from the EU studying at UK universities, approximately 10% of whom are taking programmes at business schools. 43,000 nationals of EU countries comprise 14% of staff at UK universities. The number of UK students working or studying in EU countries in the past 7 years has more than doubled to approximately 20,000 students. In addition, over 200,000 British undergraduate students have studied in EU countries under the auspices of the Erasmus exchange programme.

EU research funding comprises more than 14% of all UK income from research grants and contracts, primarily through the FP7 and Horizon 2020 programmes. UK universities punch above their weight relative to contribution, receiving approximately £1.2 billion per annum in EU research funding. In the latest FP7 programme, UK universities were the second largest recipient of funding after Germany, and received a quarter of all FP7 funding for academic mobility and exchange programmes. These high levels of EU funding are welcome, as UK public funding of research as a percentage of GDP is below OECD and EU averages, and the lowest of the G8.

The integration of UK and EU higher education systems derives from UK membership of the single market, the basic tenet of which is freedom of movement of people, goods, services and capital. The principal benefits of these freedoms are reductions in regulatory, technical and administrative barriers to the free movement of students and staff across Europe. Benefits for UK students studying in EU institutions include paying local university fees, which are often lower than fees in the UK. EU nationals studying in the UK are eligible for loans and bursaries, with reduced visa burdens and access to post programme employment opportunities. In a similar fashion, UK universities benefit by accessing the talent pool of academics across Europe. This is important for business schools experiencing shortages in some areas, such as finance and accounting.

The contribution of EU students and academics to the UK economy is commonly reduced to economic value or simple monetary terms, yet benefits are multifaceted. Intangible benefits of collaboration and cooperation, including stimulating intercultural awareness, introducing different perspectives, broadening diversity, sharing ideas and knowledge, tapping into global networks, and creation of transnational connections provide invaluable benefits and help the UK better compete in the global economy. In addition, European graduates contribute disproportionately in terms of innovation and entrepreneurship (an obvious example is NaturalMotion founded by Torsten Reil at Oxford). The international reach of the UK higher education system is evidenced by the fact that many European leaders are graduates of UK universities, with soft power benefits emanating from world leading institutions.  Whilst some may argue that these relationships could be replicated with universities in other countries, countries of the EU are closer to the UK both culturally and geographically, and replicating these relationships farther afield would pose significant administrative headaches.

The impact of Brexit on universities, students and academics in the UK and Europe is difficult to gauge. With regard to funding, UK universities will probably remain part of the European Research Network, similar to Switzerland and Norway. UK universities will likely have access to Horizon2020 and FP7 funding, albeit at reduced levels. Furthermore, UK students could be eligible to participate in the Erasmus+ programme, similar to students from non-EU countries.

The greatest immediate difficulty is uncertainty, resulting in stasis. Investment decisions are being put on hold, European partners are hesitant to partake in joint research bids, and students are reluctant to apply for programmes. The recent announcement of major restrictions on overseas students by Home Secretary Amber Rudd does not offer comfort. Her pronouncement on two-tier visa rules tailored to the quality of programme and institution is causing unease across the sector, particularly as it echoes an earlier proposal that only those who graduate from the Russell group of universities can remain to work in Britain after graduation (even though the vast majority of students return home post study).

UK universities are among the best in Europe. 14 UK business schools feature in the FT’s list of Europe’s top 50. These institutions are resilient, and will be able to attract the most talented students and academics in Europe, albeit with greater administrative burdens and probably at higher cost. UK university leaders must now work to develop opportunities and mitigate potential setbacks during this transition period. Firstly, they should persuade policy makers to minimise administrative and regulatory burdens that will stifle development and growth of higher education in the UK, particularly restrictions on the free movement of students and staff. Secondly, they should adopt a united front, and ensure that visa restrictions are not discriminatory and detrimental to the majority of institutions in the sector. Thirdly, university leaders should extract a commitment from government to increase the level of public research funding to the OECD average at a minimum, and to compensate universities for any shortfall in research funding experienced as a result of leaving the EU.

Ciarán Mac an Bhaird.

October 2016.

*The views expressed are those of the author and do not necessarily represent those of the ISBE board.

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