My Lords, I join previous contributors in thanking the noble Baroness for securing this important debate. What can be more important to the future success of our country, economically and otherwise, than a thriving and responsive university sector where young people and others can explore their potential alongside the best students from around the world and where pioneering research takes place, with resultant opportunities for business and benefits for us all?
I declare an interest because London First, of which I am chief executive, counts many higher education institutions among its members, alongside some 300 of London's leading businesses.
London is a centre of excellence in higher education in both UK and world terms. Some 41 of the UK's 160 universities and HE colleges are in the capital. They attract £90 million of foreign investment in research and 83,000 foreign students. So the economic impact in London alone is substantial and positive, but it could be bigger and better. There is untapped potential which requires stronger partnerships between higher education and business.
I know that some educationalists think that universities need business like fish need bicycles and that private sector leadership and entrepreneurship might somehow wash away the high educational ideals upon which colleges and universities were founded. But that shows a lack of self-confidence. Business values the intellectual leadership presented in higher education. Intellectual leadership and knowledge transfer are the vital ingredients for an economy based on knowledge and high added-value business services. For the UK to retain a competitive edge over international rivals, we have to stay ahead intellectually and in pursuing and applying cutting-edge research.
"Knowledge is power" is the cliché. The real truth is that applied knowledge strengthens economic power. For UK plc to stay ahead of international competitors, we have to take advances quickly from the cerebral to the experimental, from research to development and from there to application. Some might say that it is time that we "sweated" our academic assets more. It is an ugly expression, but it is used in the commercial world to describe getting better value from underused premises, equipment or other resources. In the case of our universities and HE colleges, the assets to be sweated are mainly intellectual rather than physical. They represent the key to our future competitiveness.
How can we release all this potential, apply our knowledge and strengthen our economic power? We can do so by building much better practical working relationships at all levels between academia and industry. Both the HE sector and business need to be more open to each other. Those in higher education have to recognise that business must make profits and that it is not somehow dirty to do so. Our university sector must sell its intellectual assets, be it research, training services or graduates, in a competitive and globalised world. If they fail to be competitive, they will discover that UK businesses will not feel bound by patriotic loyalty but will buy elsewhere.
Business should in turn recognise the strength of the HEIs' offerings that are often literally on their doorstep. Engaging with an American or Japanese university may seem more glamorous, but the knowledge and expertise that UK companies seek is very likely sitting in a UK university. Perhaps I may put in a word for some of the new universities. Some of Britain's best graduates—those who have often triumphed over less than privileged backgrounds—emerge from modern HE institutions to find themselves unfairly discriminated against by employers.
Fruitful partnerships between UK business and higher education are already there, waiting to be developed, imitated or multiplied. Let me mention just one. The Praxis programme, founded out of the Cambridge-MIT Institute, brings together advisers from HE and industry to deliver thorough professional training in technology and knowledge transfer. It is creating a well-skilled interface to enhance business sector access to HE-generated knowledge and technology in the UK.
As in so many walks of life, if academia and industry do not work harder at hanging together, I am sure that our international competitors would be delighted to see them, and the UK economy, hang separately.