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Universities and Territorial Development: Reshaping the Regional Role of UK

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Article in Local Economy · February 2003

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This is an electronic version of the following article published by Routledge:
Charles, D.R. Universities and Territorial Development: Reshaping the Regional Role
of UK Universities. Local Economy 2003, 18(1), 7-20.
Available online at:
http://www.informaworld.com/openurl?genre=article&issn=0269-
0942&volume=18&issue=1&spage=7

Universities and territorial development: reshaping the

regional role of UK universities

David Charles
Centre for Urban and Regional Development Studies/ University of Newcastle upon
Tyne Business School, Newcastle upon Tyne.

Introduction
Increasingly regions are re-examining the role of universities as players in processes
of endogenous or locally based development strategies, and in some cases in the
promotion of investment from outside also. The shift in orientation of regional
strategies since the 1980s towards supply side initiatives, regional institutional
capacity and endogenous development led regional development bodies and agencies
to look to universities as providers of a number of inputs to the development process,
whether it be scarce resources of skilled labour, technology, or management
development. Beyond these issues however the wider involvement of universities in
civic or regional life has been perhaps undervalued, both by the universities and
regional institutions. In parallel, shifts in the form of governance of the development
interests of regions are resulting in opportunities for universities to become involved
in the planning and governance of their regions in ways that have never previously
been so transparent. In this paper I examine these developments and the ways in
which the changing university-regional interface is working out in the UK, and
comment on the implications for policy.
There are a number of developments in the contemporary environment of universities
which have important implications for the way universities link to their local
communities and which suggest that it is important to review this topic at the present
time. At least five components of change can be identified:
• changes in central government's definition of the mission for universities within a
system of mass higher education (DTI/DfEE, 2001)
• a related increase in the demand for skills and knowledge, in response to increasing
competition in a global economy (Lundvall and Borrás, 1997)

1
• increasing rates of technological change and new ways of organising the
production and distribution of goods and services, with new demands on the
science base (Gibbons et al 1994)
• changes in the structure of government, and a greater diversity of bodies having a
stake in the governance of territory and the delivery of public services (Tomaney
2000)
• new patterns of urban and regional development arising from the greater mobility
of capital and labour, the decline of industrial sectors and the emergence of new
sectors.
While all of these components have a national and international character, they each
have implications for different parts of the university system and how the universities
interact with specific local circumstances. More importantly, it is chiefly at the local
level that the interaction between all of these forces for change become clearly visible.
Universities themselves are also changing, from self-governing collections of
individual scholars to more centrally managed institutions. Relations with the local
community are an important part of the operating environment for many aspects of
the work of the university, and frameworks for handling these relations are
increasingly required. Previously, attention has focused particularly on issues such as
the direct economic impact, technology transfer and physical planning rather than the
sum total of challenges confronting the universities and which have a local or regional
dimension.
Recent UK government policy statements have particularly focused on the role of HE
in underpinning economic vibrancy within a context of support for clusters and
innovation.
'The role of our universities in the economy is crucial. They are powerful drivers of
innovation and change in science and technology, the arts, humanities, design and
other creative disciplines. They produce people with knowledge and skills; they
generate new knowledge and import it from diverse sources; and they apply
knowledge in a range of environments. They are also the seedbed for new industries,
products and services and are at the hub of business networks and industrial clusters
of the knowledge economy. DTI/DfEE (2001)
Other forms of regional engagement can be seen within national policies on access
and lifelong learning, and sustainability. But, due to the absence of joined up
government, the full diversity of strands of regional engagement can perhaps only be
observed by the HE sector itself (Goddard et al, 1994) and the contribution of HE is
understated in recent government policy statements on urban regeneration, health and
culture.

Shift in notions of the role of HE in society

Why are these issues becoming more significant at present?
Internationally there is a widespread view that the role of higher education in society
has shifted to an increasingly instrumentalist position, from a more idealistic position
focused on the creation of knowledge (Readings, 1996). This shift is apparent in a
number of ways such as through the growing focus on vocational training and
employability, the growth of new relations with industrial sponsors (Gibbons et al),
and a perceived erosion of the autonomy and authority of academic governance.

2
These transformations cannot be disconnected from a set of other changes, especially
in the UK, notably the expansion of higher education and the emergence of
‘massification’. Expansion to a current level of 35% of school leavers plus increased
numbers of mature students has inevitably had a dramatic effect on the character of
HE and the wider social mix and aspirations of students, coupled with a demand from
government that much HE capacity should be devoted to preparing students for work.
With small numbers in HE, a tradition of residential study away from home could be
maintained. However, with mass higher education, and a current target of 50%
participation, and the retreat from student grants, home-based provision has become
much more important and HE is now much more widely distributed across the
country. Although a more traditional form of HE remains in certain institutions, the
consequence is of a much more diverse and locally based sector than previously,
within which community and employer relevance was inevitable. This also has
important implications for the local community in that local and non-local students
have differentiated effects through their consumption of entertainment and other
services (Chatterton, 1999)
The demand for a more massive HE sector has emerged from a wider set of changes
in society and the economy, commonly referred to as the emergence of a knowledge-
based, or learning economy (Lundvall and Borrás, 1997). The transformation of
workplaces and the relative growth of knowledge-based office occupations is
manifested through demand for greater numbers of graduates. Additionally the forms
of knowledge needed are continuously shifting away from traditional disciplinary
lines to new problem-focused themes (Gibbons et al, 1994). Hence within research
collaboration and in mainstream training and education there has been a growth in
new combinations of expertise and new centres and departments that map onto the
needs of employers.
Over the last twenty years there has also been a steady movement of regional
development policy away from a concentration on mobile industry towards a new
emphasis on knowledge-based endogenous growth (Morgan and Nauwelaers, 1999).
The limits of traditional regional policy have been illustrated by the cyclical nature of
inward investment, and the weakness of many such plants to subsequent
rationalisation and closure (Charles and Benneworth, 1999). Meanwhile, successful
regions have been associated with the growth of knowledge based clusters rooted in
communities of knowledge (Henry and Pinch, 2000) and featuring high birth and
growth rates of small firms, and high levels of public and private research and
development (Keeble and Wilkinson, 1999).
HEIs have frequently been seen as core institutions within such exemplar cases of
‘learning regions’ (Florida, 1995) for their importance in labour markets for the
highly skilled and as sources of knowledge and new ventures (Lindholm Dahlstrand,
1999, Webster et al 2003). However this model too is perhaps now being recognised
as too limited, and the notion of territorial competitiveness is being extended to
encompass a broader agenda that extends beyond narrow business performance.
However, if we include questions of social equity, sustainability and culture in the
concept of regional development, the potential role of the university becomes even
more clear (Charles and Benneworth, 2001a).

3
Universities and local governance questions
So if universities are key players in the development and enhancement of learning
regions, and are of critical importance in poorly-adjusted regions, then how do
universities engage in the region to ensure a mutually beneficial collaboration?
The legal and institutional basis of the university itself is the first consideration, in
that the ability of the university to participate in the governance of a region depends
on the degree of independence of the institution from regional and national
governments, the nature of the funding relationship and hence priorities set through
that mechanism, and the powers, rights and assets of the university (the ability to
independently own and develop land for economic purposes for example) (Charles et
al 2001).
Second is the will and organisational capability of the university to want to engage
with its region. If the will exists, perhaps embedded in the form of the university
charter and mission, in the institutional culture or memory, or less institutionalised in
the form of the intentions and objectives of current senior management, then this
needs to be transferred into a capability for response within the institution, in the form
of committees, responsible officers, and mechanisms. Outside the university the
openness of local institutional networks to inputs from educational institutions, and
the attitudes towards learning, affect the nature of the relationship that develops.
An important process for the localisation of knowledge is the development of human
capital (Van der Meer, 1996). Universities have traditionally produced graduates for
a national labour market dominated by large employers, with little concern for SMEs
or graduate retention in local labour markets. This model has begun to break down in
response to changing patterns of employer demands such as the decentralisation of
large corporations into clusters of smaller business units and the greater role of
smaller businesses as sub-contractors, suppliers, franchisees etc., with consequent
implications for the skills required of graduates and the location of the recruitment
decision. At the same time, regional agencies are promoting graduate retention
initiatives as a way of upgrading the local stock of higher level skills, through
placements in small firms and local employer career directories. In parallel with these
demand side changes there is a growing number of mature local students on both
undergraduate and postgraduate programmes. Notwithstanding these developments,
comparatively little is known about the flow of students through higher education into
local labour markets and how this relates to the overall economic performance of
regions.
A further question concerns the indirect contribution of universities to the social and
cultural basis of effective democratic governance and, ultimately, economic success.
Putnam (1993) has claimed a relationship between a civic culture, local institutions
and wider socio-economic performance. Regions or localities that are rich in such
networks ‘encourage social trust and co-operation because they reduce incentives to
defect, reduce uncertainty, and provide models for future co-operation’ (1993: 177). A
largely unexplored question in this literature concerns the role of universities in
contributing to this wider civic culture. In so far as universities are by tradition
classically “civic” institutions in many countries, they may play a key role in the
development of the cultural and political determinants of socio-economic success,
through for example the development of networks of civic engagement, and in the
wider political and cultural leadership of their localities (Charles and Benneworth,
2000).

4
The UK policy environment for university-regional interaction
The public policy landscape supporting university-region interaction has also become
considerably more complex in recent years, through a combination of growth in
national schemes targeted at universities, increased participation of universities in
regional and regeneration programmes, and the effects of devolution through the
establishment of parallel but distinct schemes in the devolved nations.
In the UK, a core set of grant schemes and programmes to promote collaborative
research, graduate placement and teaching companies has been in operation for many
years. These have been accompanied more recently by the development of what is
expected to become a permanent ‘third strand’ of funding for outreach and
entrepreneurial activity.
Following the DTI White Paper in 1998, ‘Building the Knowledge Driven Economy’,
funding was provided for the establishment of 12 Science Enterprise Centres. They
provide a focus for commercialisation and entrepreneurship, aimed at both academic
staff and students. Associated with this programme, the University of Cambridge
joined forces with MIT to promote the international transfer of expertise in
commercialisation. In parallel, the University Challenge (UC) initiative was
established with funding from the Treasury, the Wellcome Trust and the Gatsby
Charitable Foundation, to establish rolling funds to support commercialisation
projects through seed funding.
In England and Northern Ireland, this selective approach was accompanied by the
Higher Education Reach Out to Business and the Community (HEROBC) Fund,
launched during 1999 with a first tranche of £60 million awarded for three-year
projects in 87 institutions or consortia. A second round of funding in 2000 resulted in
a further 50 awards totalling £22 million. The second round covered many of the
institutions that were unsuccessful in the first round, but also included 11
collaborative projects.
Further developments have followed in 2001 with the DTI/DfEE White Paper,
‘Opportunity for All in a World of Change’. This launched a new initiative to
establish University Innovation Centres – large, regionally-based, research and
innovation centres often focused on collaboration between HEIs.
As part of the shift towards a more permanent structure for third strand funding,
HEROBC has now been subsumed into a new HEFCE programme, the Higher
Education Innovation Fund (HEIF), which was launched alongside final calls under
the SEC and UC programmes. Subsequently it is intended that HEIF will be the main
vehicle for core funding for business interaction, incorporating University Innovation
Centre projects.
The situation in Scotland and Wales under devolution and with their own funding
councils is somewhat different. Although eligible under SEC and UC as UK-wide
initiatives, Scotland and Wales have had their own programmes to encourage
interaction, notably the Welsh Knowledge Exploitation Fund and the Scottish
Knowledge Transfer Grant (see Charles and Conway, 2001 for more details)
In addition to these initiatives by the HE funding bodies, universities are increasingly
involved in regionally-based initiatives which assist the development of
commercialisation and business interaction activities. Currently in the North West, for
example, there is the development of a regional science policy in response to external

5
events (A.D. Little, 2001, Charles and Benneworth, 2001b). Other opportunities for
universities to engage in regional initiatives include the European Structural Funds
distributed through regional partnerships, urban regeneration activities under the
Single Regeneration Budget and equivalents in the devolved nations, schemes from
the former Training and Enterprise Councils (now under the Small Business Service)
and local authority initiatives.
The European Regional Development Fund is worth special mention as the European
Commission has been keen to encourage regional partnerships to include elements in
their programmes for technology transfer, new technology-based firms, and technical
advice to small and medium enterprises (SMEs) – whether on innovation, IT or
sustainability. Within such programmes, HEIs have been key delivery agents and
have been active participants in the design and management of the programmes.
Much of this support has focused on economic development, but encouragement for
regional engagement is also moving into other areas and agendas, with for example
the creation of an Active Community Fund, delivered by HEFCE, to provide support
for programmes of student voluntary activity in their community.

Defining the Local Community

How are universities responding to these developments, in particular how do they
imagine the local or regional community as a site for engagement, and what
mechanisms are being developed to support generic regional engagement?
The problem of defining a university's local community is both philosophical as well
as methodological. Universities are not discrete entities separate from, but interacting
with, some kind of spatially defined market. Rather, the university is embedded in
many different types of 'community': some local, some global; some overlapping and
interacting, some barely recognising each other. In this sense the university is an
essential part of local, national and global society, and forms part of how we define
our society.
There are four aspects of universities' definitions of a local community we have
previously suggested (Goddard et al 1994):
• the relationship between an institution and its physical surroundings as influenced
by historical and institutional context
• the different scales at which attributes or impacts of the university should be
measured or assessed
• the different geographic scale or territory over which the university provides
different types of 'local' service
• the perceptions held by the institution and its management of the local community
which is identified in institutional missions.
These four ideas of the local provide scope for a differentiated and contested set of
relationships. The current regionalisation of the UK further imposes an externally
defined region, taken up by the funding councils (see for example HEFCE, 2000)
which may sit uncomfortably with these self-defined regions.
Clearly any study of the university and its communities must take account of the
university's perception of what constitutes the local community and over what scale
its institutional plan is active. For this purpose within surveys in 1994 (for CVCP),

6
1997 (for DfEE) and 2001 (for HEFCE) vice chancellors were asked to provide their
own definition of their local community (see Goddard et al, 1994; University of
Newcastle, 1997 and Charles and Conway, 2001 for more details).
University institutional plans refer to specific local communities. In the case of old
universities these may be laid down in the statutes. For example the statutes of the
University of Southampton refer to the five counties of Dorset, Hampshire, Isle of
Wight, West Sussex and Wiltshire. Several of the new universities were created as
multi-site institutions and the distribution of these sites has determined their regions.
Other new universities are staking out their regional turf through the creation of new
sites. Most new universities are also establishing franchise arrangements with further
and higher education colleges and by implication defining their own catchment areas;
indeed Oxford Brookes University's plan referred to a "travel-to-study area".
Many universities also have a two-tier definition of their localities. For example,
Warwick identified the local area as embracing Coventry, Warwick and Solihull and
its region as comprising the West Midlands; Sunderland University identified
Wearside as its locality and the North East as its region. Such distinctions may map
onto the tiered structure of local government from districts and counties through to the
standard regions defined by central government.
In our surveys of 1997 and 2001 we asked university and HE college leaders about
the regional or local territories they identified as being of greatest priority for their
institutional mission. In the 1997 survey the largest group of universities identified
with a region of their own definition, usually expressed as a group of counties
immediately surrounding the university and hence differentiated from a standard
region either by being a smaller subset or in some cases by overlapping the
boundaries of two or more regions (Table 1). Generally a regional or sub-regional
level was identified in preference to a locality or even county, although just under a
quarter adopted such a definition. The 2001 survey saw a significant shift in the
response towards the RDA region with almost 43% identifying this as most important
for their mission, narrowly overtaking the university-defined areas. This latter survey
included HE colleges as well as universities, so had a larger group of institutions
represented, although the colleges were less likely than the universities to identify
with the RDA region scale of involvement. Just taking the universities, the proportion
identifying with an RDA region increased from 25% to 45% over the 4 years.

Table 1: Regional or local unit considered of greatest priority in the institutional

mission

Regional/local unit % responding % responding

universities in HEIs in 2001
1997
University defined region (e.g. surrounding 42.17 39.1
counties)
Government Regional Office /RDA area (e.g. 25.30 42.8
East Midlands, South West)
Locality - city, town or rural district 15.66 8.7
County 8.43 5.1

7
Regional/local area not of any significance to 8.43 4.3
mission
Source CURDS survey 1997, HEBI survey 2001
Looking closer at the regional variations in response for the more recent 2001 survey,
there is a notable divide between the northern English regions and devolved territories
on the one side, where over 60% of HEIs considered the RDA region to be most
significant, and the southern and midland English regions on the other where the
emphasis remains more strongly for HEI-defined territories (Table 2).

Table 2: Regional or local unit considered of greatest priority in the institutional

mission - regional groups of universities (% within each regional grouping)

LDN/SE/E WM/EM/SW NE/NW/YH S/W/NI

ast
Regional/local area not of 9.8 3.3
any significance to mission
Government region/RDA 21.6 43.3 60.7 62.1
area
County 3.9 3.3 10.7 3.4
Locality - city, town or rural 17.6 3.6 6.9
district
Area defined by the HEI 47.1 50.0 25.0 27.6
(e.g. surrounding counties)
No. of cases 51 30 28 29
Source: HEBI survey 2001

The economic development of the local region was identified as of continuing

importance to HEIs in 2001 (Table 3). Almost sixty per cent said that it was a high
priority within their institutional mission, and only seven per cent said it was a low
priority. This compares with previous CURDS surveys in 1993 and 1997 (although on
previous occasions restricted to universities only). In 1997 the figures for universities
were very similar to the current survey, with older universities tending to score a little
lower and new universities a little higher, but the difference between the two surveys
was not really significant.
Economic development tends to be a higher priority for post-1992 universities with
over 86% rating it so, compared with just over 50% of older universities and 44% of
colleges. None of the post-1992 universities rated economic development as a low
priority. Even within the older universities there was only one broadly based
institution that gave a low priority to the economic development of their region, whilst
all of the others indicating a low prioritisation were specialist institutions.
Table 3: Importance of economic development of the region in the institutional
mission (universities only)

8
 1997 survey 2001 survey
High priority 61.5 64.9
Medium priority 33.7 30.1
Low priority 4.8 4.2
Source: CURDS survey for DfEE 1997, HEBI survey 2001

In the previous study for CVCP we devised a scale by which the local or international
orientation of universities could be described (Goddard et al 1994). This sought to
provide a spectrum between locally-oriented institutions and those with purely
international research objectives. The earlier findings essentially differentiated
between new universities that largely classified themselves as ‘an institution seeking
to contribute to the local area and also develop international strengths’ and the old
universities that regarded themselves as ‘an international research institution seeking
to provide support to the local community where it does not conflict with international
research excellence’. This divide, which to some extent reflects attitudes and
aspirations rather than always stating an accurate position, is nonetheless an important
sign of the framework within which university policies are developed. Four years on,
in the 1997 survey, attitudes were not noticeably different, with a sharp distinction
between old and new universities.
Table 4: Descriptions of the university’s strategy towards the local area/region ( % )
Post-1992 Pre-1992
universities universities
A community-based institution serving the needs of the local 6.25 0
area/region
An institution seeking to contribute to the local area and also 87.50 15.69
develop international strengths
An institution seeking to contribute equally between 3.13 15.69
international research and support to the local area
An international research institution seeking to provide 0 56.86
support to the local community where it does not conflict
with international research excellence
An international research institution with no particular ties to 0 3.92
the local area/region
None of the above 3.13 7.84
Source: CURDS survey for DfEE 1997

University mechanisms and structures for regional engagement

The changes in the perception of the importance of the region as a site of interaction
for universities has also been turned into action through a variety of mechanisms and
structures developed within the universities over the past few years. Even in advance
of the availability of new funding for outreach activities there was an emergence of
new regional offices and dedicated regional staff. In some cases these activities grow
out of existing technology transfer or industrial liaison offices, but in others the
stimulus was the need to better manage interaction with regional Structural Funds
partnerships, supporting community engagement or co-ordinating placements.

9
The 1997 survey found that two thirds of universities had a central unit that managed
regional collaborative funding, and that one third had some form of special regional
development committee. This situation has subsequently been reinforced by
HEROBC and related programmes. Taking the example of the North East, all five
universities have some form of regional development support unit. In Newcastle there
is a Regional Development Office led by a Regional Development Officer and with
specialist staff to advise on regional grant applications, and engage in business
development (assisted by HEROBC funding), Northumbria University has a European
and Regional Office that manages regional interactions and ERDF applications,
Durham has a REDS office and so on. All of these devote considerable time and effort
to the management of interactions within the region, sending staff to regional
partnership meetings, liaising with the government office, RDA, local authorities etc,
and supporting academics in bidding into regionally based funding sources such as
ERDF.
At the same time HEFCE has been supporting the emergence of regional consortia or
associations for each of the English regions. The development of regional level HE
consortia is a relatively recent phenomenon, beginning with the establishment of an
association in the North East of England in 1983, Higher Education Support for
Industry in the North (HESIN), established to provide a collective endeavour to
meeting some of the problems of the region through industrial training, technology
transfer activities and such like. In 1999 HESIN was relaunched as Universities for
the North East with a broader remit, linking also into the new regional Economic
Strategy developed by the RDA, One NorthEast, within which one of the six priority
actions was ‘Putting Universities and Colleges at the heart of the regional economy’
(ONE, 1999).
This initial regional universities association model was followed in 1993 by the
Yorkshire and Humberside Universities Association (YHUA), and subsequently
HEFCE, has been promoting the formation of regional associations or consortia with
pump priming funds from the Restructuring and Collaboration Scheme. During 1999
and 2000 all of the remaining English regions established such consortia. The advent
of the Government Regional Offices and then the RDAs have encouraged the
formation of consortia that map onto the RDA boundaries, and in some cases the
consortia have been preceded by informal grouping of vice-chancellors that met with
the regional director of their Government Office.
The initial North East model was exclusively university based, and that region has no
HE colleges, but elsewhere associations have incorporated HE colleges as well as
universities, and in the case of the North West two associations were established to
represent universities and HE colleges respectively, albeit operating from the same
offices.
Region Association
North East Universities for the North East (unis4ne)
Yorkshire Yorkshire and Humberside Universities Association (YHUA)
and the
Humber
North West North West Universities Association (NWUA) and Higher Education
North West (HENW)

10
East East Midlands Universities Association (EMUA)
Midlands
West West Midlands Higher Education Association (WMHEA)
Midlands
East of East of England Universities Association (EEUA)
England
London London Higher Education Consortium (LHEC)
South East Higher Education South East (HESE)
South West Higher Education Regional development Association for the South West
(HERDA-SW)

In the main these new geographical groupings of universities reflect the emerging
regional partnership arrangements in England, although there are boundary issues in
some places. A number of institutions in recent years have been establishing
additional campuses often across regional boundaries, giving them a foot in more than
one region. A small number of these institutions have committed themselves to two
separate associations, but in most cases there is a primary affiliation and a recognition
of permeable boundaries. De Montford University although primarily based in the
East Midlands has a campus in both the South East (Milton Keynes) and East of
England (Bedford) and is a member of all three regional associations.

Conclusions
Regional engagement has perhaps become more important to universities now than
anytime since the days of the engineering schools in the 19th century, although we
must remember that such so-called third strand activities are very much smaller than
the mainstream teaching and research missions. The nature of this engagement though
is becoming increasingly insinuated in many aspects of university activity, as has
been demonstrated in recent studies (Charles and Benneworth, 2001a). The position
of university managers on this is partly to stress its importance in formal terms, as
contributing to the mission and as a source of new marginal income, but also to be
unaware of the complete range of activities undertaken by individual academics.
It is easy though to overstress the regional agenda, and many within universities retain
a lack of interest or even disdain for the idea of regional engagement, preferring a
model of indifference to locality and a global research orientation. Nonetheless there
are a range of strategies and mechanisms developing, including a number of
experiments in regional partnership that represent new opportunities for both
universities and their regional partners to forge closer links.

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