University of Southampton generates over £4bn to UK economy

In 2020/21 the university generated a staggering £4.14bn impact, and for every pound spent by the university £7.40 was made in economic benefit.

These impressive figures are thanks to several factors, including new and international students, employment at the university, university-based businesses, and more.

The institution contributes £1.35bn to the UK economy while the Port of Southampton contributes £2.5bn.

'Undisputable' impact 

Dr Gavan Conlon, partner at London Economics and co-author of the report said the economic impact of the university on the economy is “undisputable.”

He said: “Standing at a massive £4.14 billion, much of the economic impact occurs in Southampton and the South East.

“Importantly, the university has a real and tangible impact on the lives and livelihoods of residents.

“After the pandemic, the university, its staff and its students will be one of the key drivers of the economic recovery in the Southampton region.”

The report detailed how approximately £1.6 billion of the identifiable regional impact occurs in the South East, while a significant proportion occurs within Southampton itself.

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One example of the city and the economy benefiting from the university is renewable natural resources company Absolar.

The company based at the university’s Science Park was born out of research conducted there.

It helps companies to reduce their carbon footprint by using artificial intelligence to assess the current carbon output of their buildings, and inform their likely return on solar investment, expected CO2 and electricity bill savings, and whether or not their buildings are ‘solar suitable’.

'Leading on innovation'

The analysis in the report suggests every region and sector of the country benefits from the activities of the University of Southampton.

The university’s impact on the East of England was estimated to be approximately £100 million, while the economic impact on the North West and Yorkshire and the Humber were £83 million and £69 million respectively.

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Speaking on the findings, Professor Mark Spearing, vice president of research and enterprise, said: “We welcome this report which not only underlines the university’s importance to the UK economy but across the world.

“More than that, it demonstrates the far-reaching impact our research and enterprise has, leading on innovation and nurturing talent for the future.

“More directly, the huge impact we have on our host city Southampton, especially as our region emerges from the effects of the pandemic.”

Why does the university have such a big impact?

The report goes on to provide a breakdown of the university’s economic impact.

• This reveals the university’s research, enterprise and knowledge exchange has the largest impact, with £2.07bn across the UK economy in the academic year 2020/21.
• Teaching and learning activities from new students starting their studies in the 2020/21 year generated £682 million, while first year international students in the same year created £553 million.
• Beyond the large intake of students, the University of Southampton is a major employer, providing over 16,000 jobs not only in the city but across the UK.
• Tourism is also a major factor in the university’s economic impact.

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It contributes £69m to Southampton’s tourism industry, coming from around 23,000 study trips, business meetings and visits to see friends and family.

All of this together means the university, its staff and its students will be one of the key drivers of the economic recovery in the city region post Covid-19 pandemic.

Andrew Pritchard, co-author of the economic report, said “In terms of economic impact, the University of Southampton punches significantly above its weight.

“Of that there can be no doubt.”

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