Falmouth University's Economic Impact Report by Falmouth University

Falmouth University Economic Impact March 2021

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Cornwall's economy

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Contents Executive Summary

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Introduction

An Economic Anchor

Student and Visitor Impacts

Skills Development

Innovation and Enterprise

Falmouth in 2030

Economic Impacts at 2030

Appendix A: Approach to Impact Assessment

Falmouth University Penryn Campus Treliever Road Penryn Cornwall TR10 9FE United Kingdom falmouth.ac.uk 01326 213770

Report by Hatch, 4th Floor, 20 St. Andrew Street, London EC4A 3AG

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Executive Summary

Executive Summary i.

Hatch has been commissioned to assess Falmouth University’s contribution to Cornwall and the wider UK economy. The assessment provides a stocktake on the wide range of ways in which the University supports economic development in the county and the UK, in the context of local needs and opportunities. It also looks to the future and sets out how this economic contribution is likely to grow, given the University’s ambitious plans for further development.

Cornwall’s economic context ii.

Cornwall and Isles of Scilly (CIOS) is a relatively peripheral, rural region. Overall Gross Value Added (GVA)1 per capita is around 35% below the UK average and 32% below the EU average, making it the only ‘Less Developed Region’ in the UK for EU regional development funding in the 20142020 Growth Programme. A number of challenges underpin this overall economic performance, including a dependence on tourism and agriculture, which have relatively low wages, a lack of large employers and deficits on skills, enterprise and innovation.

iii.

Despite this, there are a number of key opportunities for growth. The CIOS Local Enterprise Partnership (LEP) strongly supports the development of a creative cluster. This is the first of ten opportunities within the LEP’s Local Industrial Strategy (LIS), and innovation and creativity is also one of the strategic drivers for CIOS LEP’s 2030 vision2. National policy also recognises this, with the UK’s Creative Industries Sector Deal highlighting Penzance and Exeter as creative clusters and the CIOS LEP digital cluster grew by 95% from 2011-173.

“Our future economy will be built on creativity and technology. There will be significant opportunities for people who can combine creative, technical and social skills, and for businesses that can adopt these characteristics.” Emerging CIOS LEP Local Industrial Strategy

Falmouth as an economic anchor iv.

Falmouth University is at the heart of this drive to develop the creative economy in Cornwall. This goes back to its roots in the early twentieth century as the Falmouth College of Art. The institution is the centrepiece of a major, long-term economic development project, driven by the recognition that the previous lack of a university presence in the county was contributing to an outflow of skilled young people and acting as a major barrier to the development of the knowledge economy. The project was backed with very significant funding from the EU and UK Government.

GVA is the main measure of the value of economic activity in an organisation, sector or region. It is calculated as the sum of EBITDA (Earnings before Interest, Tax, Depreciation and Amortisation) and Total Employment Costs. CIOS LEP, Vision 2030: The Cornwall and Isles of Scilly Strategic Economic Plan 2017-2030. CIOS LEP, 10 Opportunities.

2 3

Falmouth is the only university headquartered in Cornwall and since its inception has grown very strongly, with on-campus student numbers tripling since 2001.

vi.

As such, the University generates significant and growing economic benefits for Cornwall. Our quantitative assessment, conducted for 2018/19 in order to remove the effects of the COVID-19 pandemic, found that:

• • vii.

the University currently supports £100m in GVA (2020 prices) and 2,030 full time equivalent (FTE) jobs in the county; this is equivalent to around £1 in every £109 of GVA produced in Cornwall.

The key components of this contribution are as follows.

Economic impacts in Cornwall, 2018/19 GVA (£m)

FTE jobs

Direct

770

Indirect

Induced

200

Student and visitor spending

700

Enterprise and innovation

270

Total economic contribution

100

2,030

Source: Hatch, 2020 Note: Figures are rounded

A major employer and purchaser viii.

The University4 is a significant employer and generates further multiplier effects for the economy through its supply chain spending and through the expenditure of staff:

• • • •

It directly employed 770 FTEs in 2018/19, representing 80% growth since 2004/05. Average salaries are around £44,600 per FTE, which compares to £23,100 on average across all jobs in Cornwall. In the same period, the University’s income has quadrupled to £81 million. This means that the University’s direct contribution to Cornwall’s GVA has grown to £44m in 2018/19. The University spent nearly £30 million with UK-based suppliers in 2018/19, of which over £7m was spent in Cornwall. This expenditure supported £5m GVA and 90 FTE jobs in Cornwall and £20m GVA and 370 FTE jobs in the UK. Spending by the University’s employees and those in the supply chain supports an estimated £10m GVA and 200 FTE jobs in Cornwall, and £30m GVA and 340 FTE jobs in the UK.

and its share of FX Plus, the shared services company operated in partnership with the University of Exeter.

Student and visitor spending ix.

With 6,400 students in 2018/19, the University plays a critical role in retaining and attracting young people into Cornwall to study. Its on-campus student population has tripled in size since 20015, representing around 29% of Falmouth’s residents.

These students’ spending in the local economy provides a very significant economic boost, supporting an estimated £25m GVA and 650 FTE jobs in the Cornwall economy, and £60m GVA and 1,140 FTE jobs across the whole of the UK. To illustrate this, other recent research6 found that the town of Falmouth alone had lost a total of £8.8 million in student spending in six months due to students being kept away from the town during lockdown.

xi.

Alongside this, we estimate that a further £1m in GVA and 50 FTE jobs are supported in Cornwall by visits made to see students.

A driver of future skills development xii.

xiii.

Falmouth University’s approach to its core function of development skills for the future responds directly to the economic development needs of Cornwall, and particularly the growth opportunities for the creative economy. The critical mass created locally through Falmouth University’s rapid expansion in the creative industries (a high-growth global sector) is regarded as a major asset for the region.

“Falmouth University has a high quality of technical facilities and performing arts spaces which can help students and young people to advance in their industry.” Lee Hornsby, Creative Industries Federation

Falmouth University’s skills ambition is for all students to either start up their own company, gain work in a Falmouth University owned or partner company, or gain a Falmouth University accredited work placement in Cornwall.

xiv.

The University’s provision is designed to reflect the current and future requirements of jobs across the creative economy, by co-designing courses with industry wherever possible.

• • •

5 6 7 8

96% of Falmouth’s 2016/17 graduates are employed or studying7. Falmouth attained a Gold rating in the Teaching Excellence Framework (TEF), in part due to its employer-focussed provision. 22% of graduates are in self-employment compared to 5% across all UK universities, reflecting the University’s focus on entrepreneurial skills and the importance of freelance and portfolio working within the creative economy8. This is particularly important in retaining graduates in the county, given the relatively low proportion of large employers within Cornwall.

Falmouth University, 2030 Strategy. Studee.com, The university towns and cities that have lost the most money because of Covid-19. HESA, UK Performance Indicators, 2018. Based on full time first degree graduates. 2020 Graduate Outcomes Survey.

• •

Falmouth was rated the second-best UK university for people who want to be a business leader by Hitachi Capital Invoice Finance based on a study of 9.5 million former UK students9. The Games Academy exemplifies the University’s approach to employer-focussed skills provision, and is the top English gaming school and 4th in Europe.

An enterprise and innovation hub xv.

xvi.

Falmouth has a very strong focus on stimulating enterprise within its students, and on collaborative innovation with industry. One of its key priorities is developing new high growth start-up companies. This is done by developing new products and services, new routes to market and ready access to investors and suppliers locally, across the UK and beyond.

“Falmouth University has been fundamental to inspiring residents from all backgrounds to consider higher education.” Emily Kent, CIOS LEP

This directly addresses the relatively low rates of business start-up and R&D activity in Cornwall.

xvii. The University applies Open Innovation to develop the local business ecosystem through the following core routes:

• • • • •

Undertaking research to address Cornwall’s key industry and resident needs; Supporting Cornwall’s businesses to innovate and connect with the University’s research; Enabling the creation of high growth businesses in response to local industry opportunities; Unlocking regional prosperity through an active approach to policy and facilitating investment attraction; Attracting talent - Falmouth University and the ecosystem attract talent to the region providing a pipeline for businesses to draw upon.

xviii. Over recent years Falmouth has secured major investment to develop its research and innovation base. The increasing scale of awards demonstrates the level of research and innovation funds that Falmouth can bring to Cornwall and sets a high bar for its future ambitions. The University’s flagship Launchpad programme exemplifies this approach, providing entrepreneurs with the opportunity to develop a high-growth tech business while gaining a master’s degree in Entrepreneurship.

“It is clear that creativity and the digital economy will be key to creating high value jobs and products here in Cornwall.” Cllr Bob Egerton, former Cornwall Council Cabinet Portfolio Holder for Culture, Economy and Planning

xix.

All Launchpad businesses are required to remain headquartered in Cornwall for three years, to boost the local entrepreneurial ecosystem and create a pipeline of businesses to move into grow on space in Cornwall. Falmouth University and Cornwall Council benefit directly from Launchpad business growth, as each holds a share of each business. Through share recycling, Launchpad aims to create an evergreen fund for Launchpad start-ups in future.

Hitachi, UK university’s students most likely to start or manage a business, 2020.

The future xx.

The assessment has demonstrated the transformational effects that the growth and development of Falmouth University has had on Cornwall. The University is now looking to the future and has developed an ambitious strategic plan to 2030, which is designed to be fully aligned with the priorities of local economic partners, especially those of the LEP. The plan is expected to see:

• • • • xxi.

student numbers continue to grow to 15,500 (142% growth); income from innovation, research and commercial ventures to increase 25-fold; 33% of graduates in self-employment 15 months after graduation; jobs created from new business start-ups to grow from 19 to 1,575. To put this into context, current employment in the creative industries in Cornwall has been estimated at 4,800 jobs10.

As Cornwall’s anchor University, a key objective of the 2030 Strategy is ‘Taking Cornwall Global’. Fundamentally, the University is directly responding to the needs of the future economy by removing the boundaries between learning, enterprise and innovation. Our assessment estimates that if the University meets its targets, its economic footprint will grow to £200m in GVA (2020 prices) and 4,260 FTEs, which would represent approximately £1 in every £54 in GVA produced in Cornwall.

“The support the University gave during incubation meant everything for the business’ success in starting up. Hertzian is committed to supporting local business and employment.” Christopher Weavill, COO and CoFounder of Hertzian Ltd

Economic Impacts in Cornwall, Baseline and 2030 (GVA in £m, 2018/19 prices, undiscounted) Baseline, 2018/19

Target, 2030

Change (abs and %)

GVA (£m)

FTE jobs

GVA (£m)

FTE jobs

GVA (£m)

FTE jobs

Direct

770

870

31 (70%)

100 (13%)

Indirect

100

0 (0%)

10 (11%)

Induced

200

230

10 (100%)

30 (15%)

Student and visitor spending

700

890

0 (0%)

190 (27%)

Enterprise and innovation

270

2,170

60 (400%)

1,900 (704%)

Total economic contribution

100

2,030

200

4,260

100 (100%)

2,230 (110%)

Source: 2030 Strategy and baseline data from Falmouth University, and Hatch calculations Note: Figures are rounded

The Cornwall Business Observatory, Cornwall’s Creative Industries and Creative Tech.

01: Introduction

Introduction

01: 1.1

Hatch Urban Solutions has been appointed to assess the economic contribution of Falmouth University and Falmouth Exeter Plus (FX Plus) to Cornwall and the UK.

Study context 1.2

Cornwall and Isles of Scilly (CIOS) is a peripheral, rural region with a dispersed population. CIOS was the UK’s only designated ‘Less Developed Region’ for EU regional development funding in the 2014-2020 Growth Programme. The area suffers from a number of structural challenges that restrict the region’s economic development, including11:

• • • • •

• •

Prominent low wage sectors: There are a large number of jobs in low wage sectors, e.g. tourism and agriculture. This reduces the incentive to higher skilled workers to remain in CIOS. A lack of large employers: CIOS LEP has the lowest proportion amongst all LEP areas. 31% of employment is by microbusinesses. Relatively low levels of higher qualifications: There is a higher proportion of people with no or low qualifications, than with higher qualifications. This contributes to skills gaps and shortages, and makes the county less attractive to businesses and investors. Small working age population: CIOS LEP has the lowest proportion of working age people of any LEP (58%), reducing the supply of skilled workers. Limited research development and innovation (RD&I) experience, infrastructure and investment: CIOS has the lowest level of all LEP areas. Companies spend an average of 0.39% of GDP on RD&I compared to a UK average of 1.7%. A lack of IP advice and information on the potential commercial opportunities presented by investment in RD&I are a barrier to this. Business density: Much of CIOS has low business density. This results in fewer opportunities for peer-to-peer support, collaboration and knowledge transfer. Below average growth of new businesses: Compared to the UK average, fewer start-up businesses scale up. This limits the opportunities of scale-ups to boost innovation, productivity and high-quality job creation.

1.3

Falmouth University has been at the centre of efforts to address these challenges through HEled growth. At the turn of the century, partners in Cornwall came together to set up the county’s first university, under the banner of the Combined Universities in Cornwall. This was conceived as part of a major regeneration project, in recognition that given Cornwall’s status at the time as a “cold spot” for HE, 90% of young people who participated in HE left Cornwall to take up places elsewhere, with the majority never returning. The Combined Universities project was designed to address this and to promote the development of the knowledge economy, by addressing other economic issues including deficits in the skills and qualifications of local residents.

1.4

The project received significant funding from Government and the European Union. The project was the key flagship intervention under the EU Objective One programme and was the South West Regional Development Agency (SWRDA)’s biggest investment in Cornwall up to that point. Over £40m was invested in the project. The main campus at Penryn covers 20,000 square metres. Falmouth gained university status in 2012.

CIOS LEP, Draft Local Industrial Strategy, 2020.

Scope of the study 1.5

1.6

Falmouth University is the only university headquartered in Cornwall, committed to playing a central role in stimulating economic regeneration, and the critical mass created locally through its rapid expansion in the creative industries (a highgrowth global sector) is regarded as a major asset for the region. Its transdisciplinary approach takes a whole ecosystem view to innovation and enterprise development. It seeks to challenge traditional HE structures and bring together insight from cross-sector partners. This economic impact assessment provides a stocktake on the economic contribution of Falmouth University to the Cornwall and UK economy, focussing on the 2018/19 academic year in order to capture the pre-pandemic snapshot. The report also assesses the future economic impacts of the University’s 2030 Strategy.

“The vision at the start of European funding in Cornwall and the Isles of Scilly was to work in partnership to transform our higher education and research facilities at the Penryn Campus into a world-class asset for the region. Anyone who visits the Campus today will experience the energy and innovation which buzzes through it as private and public sectors work together.” John Pollard, former Leader of Cornwall Council, 2013

The assessment is split, broadly, into three parts: Part 1: Current economic contribution An assessment of the current quantitative economic contributions to employment and GVA in Cornwall and the UK, taking into account the following sources:

• • • •

Direct effects: the direct employment and wealth creation within the University itself; Indirect effects: the economic activity and multiplier effects generated as a result of the University’s spending on external suppliers; Induced effects: further effects arising from the expenditure of employees at the University and those in the supply chain; Student and visitor spending: the jobs and wealth creation supported by the expenditure of students and visitors to the University.

These effects are measured in terms of employment (Full Time Equivalents) and GVA12. Further details are provided in Appendix A. This focuses on the 2018/19 academic year as the most recently completed year pre-COVID. As is the case for all UK universities, Falmouth’s economic impact has been heavily disrupted as a result of the pandemic in the 2019/20 academic year, due to the effects of lockdowns (especially in terms of student spending and the wider closure of many parts of the economy).

Part 2: Contribution to the Creative Economy A review and analysis of the University’s contributions to the creative industries and wider creative economy. As a specialist institution, Falmouth makes particularly significant contributions to these sectors, especially through:

• •

Skills development: supplying highly skilled graduates to the local and wider economy and providing CPD for companies; Enterprise, research and innovation: generating new businesses and innovations that help to drive productivity and growth.

Figure 1.1 - The Local Innovation Ecosystem

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These are considered in their wider economic context for Cornwall beyond, and are informed by statistics, case studies and stakeholder consultations. Further details on consultees are provided in Appendix B. Part 3: Future Plans The University has ambitious plans for the future, which are encapsulated in its 2030 Strategy. This final part of the report provides a summary of these plans and a projection of how the University’s economic contribution will change as a result.

02: An Economic Anchor

An Economic Anchor

02:

Introduction 2.1

As an important employer and purchaser in the local and wider economy, the University supports a series of economic multiplier effects for Cornwall. This section captures these effects and puts them into their wider context.

2.2

The analysis in this part of the report provides a snapshot of economic contributions for 2018/19, and the University (and hence its economic contribution) has grown significantly over the past 20 years. Where the data allows, we highlight this growth.

Direct effects

Figure 2.1 - Falmouth University staff, 2018/19

2.3

Falmouth University and its share of FX Plus employed 2,190 staff in 2018/19, of which 2,165 live in the UK. About 800 of UK staff are employed on a full-time basis and 1,370 are employed on a part-time or casual basis. This equates to around 770 FTE jobs, making the University a very significant local employer.

2.4

Figure 2.2 shows the increasing importance of Falmouth University as a local employer over the past fifteen years. The University has grown its presence and operations in Cornwall very significantly, especially since being given the powers to award its own degrees in 2004/5.

2.5

■

Full-time

■

Part-time

■

Flexible hours/casual

Source: Falmouth University HR Data, 2018/19

In 2018/19, the University employed c. 80% more FTE workers compared to 2004/05. This compares to 27% growth seen among all Higher Education Institutions (HEIs) in the UK. Figure 2.2 - Falmouth University FTE Employment Growth compared to UK HEIs 200 180 160 140 120

/ z z

100

Falmouth Univers it y (FTEs)

HEls in the UK --

Source: Falmouth University Financial Accounts 2004/05 - 2019/20, HESA Publications Archive, 2019/20

2.6

The majority of staff (93%) live in Cornwall. They are predominantly resident in the Truro and Falmouth (59%) and Camborne and Redruth (24%) constituencies.

2.7

Falmouth University and it share of FX Plus generated £81m in income in 2018/19. Tuition fees and education contracts were the main source of Falmouth University’s income (as we note in Part 3 of the report, the University plans to grow its income from research grants and contracts very strongly in coming years). Figure 2.5 shows that the University’s income quadrupled since 2004/5, which is twice the growth observed in the total income of HEIs in the UK.

Figure 2.3 - Location of residence of Falmouth University & FX Plus FTE Staff ms 5 7

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2.8

In 2018/19, Falmouth University and its share of FX Plus generated £44m in direct GVA13 for Cornwall and the UK.

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Source: Falmouth University HR Data 2018/19

Figure 2.4 - Falmouth University Income, 2018/19 82%

Falmouth University 's total income reached almost £65m in 2018/19

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Source: Falmouth University Financial Accounts 2004/05 - 2019/20, HESA Publications Archive, 2019/20

Figure 2.5 - Falmouth University Income Growth compared to UK HEIs 450 400 350 300 250 200 150 100

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Source: Falmouth University Financial Accounts 2004/05 - 2019/20; HESA Publications Archive, 2019/20. Note: HESA financial data for 2019/20 only available for a small number of providers, due to differences in financial year-end dates.

This is calculated as the sum of Earnings before Interest, Tax, Depreciation and Amortisation) and total Employment Costs, sourced from the University’s Annual Report and Accounts for 2018/19.

Indirect effects 2.9

In 2018/19 the University and its share of FX Plus spent £29.7m with UK-based suppliers on goods and services to support its operations and capital investments. Expenditure specific to capital investments totalled £6.4 million (22% of the total).

2.10 More than two fifths (44%) of total expenditure occurred with South West suppliers, while spending with South East and London suppliers accounts for over a third (34%) of the total. The main items of supply chain expenditure relate to construction (21%) and education (19%). 2.11 In Cornwall, supply chain expenditure reached £7.4m, of which about 22% was towards capital investments. It is concentrated in the constituencies of Truro and Falmouth and Camborne and Redruth, which together account for over three quarters (76%) of the total. The main local items of supply chain spending include construction (34%), professional, scientific and technical activities (20%) and wholesale trade except of motor vehicles/motorcycles (11%).

Figure 2.6 - Value of Supply Chain Spending of Falmouth University & FX Plus supplier Spen<l(£m)

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2.12 The University has partnered with Netpositive Futures, the approach of which focuses on improving the environmental, social and economic impacts of individual and collective activity. Current and new suppliers to the University need to register and complete a questionnaire. This will enable the University to better establish the social value and sustainability of its supply chain. 2.13 The University also works with TEVI, an EU-funded venture aiming to create environmental and economic growth in CIOS. They have held numerous joint supplier sessions and open days, where they have worked on improving social value with local businesses. Notably, a quarter of the 190 local suppliers signed up to the TEVI programme from FX Plus Supplier Day Events.

2.14 Focussing on capital investments more closely, between 2014/15 and 2018/19, Falmouth University made almost £19m worth of capital investments, equivalent to £4m per year. Capital investments in 2019/20 reached about £3m14. A good case study is the investment made in the Launchpad/ Creative Bridge development: see below. Figure 2.7 - Launchpad and The Creative Bridge development Falmouth University’s ambitious Launchpad programme is designed to retain talent in Cornwall, boost the local economy and create global opportunities. Candidates are given the opportunity to tackle real industry challenges with leading businesses supported by experienced coaches and mentors to help create marketable solutions. Candidates also receive comprehensive financial support and study for a no-fees Masters to help equip them on their start-up journey. The programme is based at state-ofthe-art facilities at the University. The Creative Bridge and Launchpad buildings now connect with the AIR (Academy for Innovation and Research) Building and are sited in a prominent position above the entrance to the Penryn Campus, serving as a ‘beacon’ for the University. The Creative Bridge provides a ‘front door’ for Falmouth University at the Penryn Campus.

“Launchpad is an incredible programme – nowhere else brings together such highly motivated and capable young people, takes them through the process of evaluating opportunities and then introduces them to industry.” Colin MacDonald, Head, All 4 Games

“Launchpad has given us financial stability, business expertise and the contacts we needed.” Rob Sanders, Launchpad alumnus and Co-founder of Glas Data

The Launchpad capital development represents a c. £5.8 investment, consisting of £3.28m ERDF funding, £2m Cornwall Council funding and £495,000 of Falmouth University funding. It delivered 1,100 sqm of open plan collaborative workspace, including meeting and welfare facilities. The Creative Bridge was realised with £2.3m of Falmouth University funding and delivered 700 sqm of floorspace including high quality exhibition and event space, office, meeting and boardroom facilities, as well as associated WCs, plant, kitchen, and storage to support the Creative Bridge and Launchpad Buildings. Building work started in July 2017 and was completed in December 2018, with the space being occupied in January 2019 and the formal opening taking place in March 2019. Source: Falmouth University

Falmouth University Capital Investments 2014/5 – 2019/20.

Figure 2.8 - Case Study: WestCountry – A Passion for Food WestCountry Group is a wholesaler of fresh produce, dry stores and local artisan products. Its fresh produce wholesale division, WestCountry Fruit Sales, has Cornish roots and was established in 1856, making it one of the oldest produce trading businesses in the South West and in the UK. In 1999, it established The Essential Food Company, its dry and chilled goods division, followed by the addition of Plough to Plate in 2014, its artisan products brand. Currently, it operates three depots across Cornwall and Devon, and it has a locally focused supplier base and supply chain, supporting large scale commercial growers and small-scale producers, over 60 local artisan producers and employment across its logistics chain. In 2014, WestCountry resumed growing their own produce at Canara Farm at Mylor, which is five miles from the University thereby providing it with direct access to high quality primary production. WestCountry’s strong belief in the local circular economy model aligns with the University’s commitments to make its procurement more local and sustainable, and to support small Cornish businesses. A significant challenge for all private businesses in this sector is seasonal spikes. Customers like the University are important, as their spending contributes to summer/winter trade balance and year-round local jobs, with effects trickling down through the supply chain. WestCountry and the University are currently collaborating on initiatives to improve delivery efficiency and impact as well as managing the impact of packaging and explore ways to build on their relationship through initiatives such as a pilot scheme for returnable boxes. Source: Falmouth University

2.15 We estimate that, in total, this external supply chain expenditure in 2018/19 supported £5m GVA and 90 FTE jobs in Cornwall out of the total of £20m GVA and 370 FTE jobs in the UK.

Induced effects 2.16 Falmouth University and FX Plus staff living in Cornwall earned £27.8m in gross wages out of the £30m paid to UK employees. A sizeable portion of gross wages paid to staff living in Cornwall was concentrated in the Truro and Falmouth (60%) and Camborne and Redruth (22%) constituencies. This demonstrates that most staff expenditure injections into the economy occurred in Cornwall. It also means that there were further knock-on benefits locally as staff spend their wages in the area. Combined with the wages of employees in the supply chain, this staff expenditure drives what are known as induced economic impacts. 2.17 The average salary per FTE at Falmouth University was £44,600 in 2018/1915, which is well in excess of local averages, reflecting the high skill nature of jobs. The average salary per FTE in Cornwall was £23,100 in 201916. 2.18 We estimate that expenditure of Falmouth University and FX Plus staff in 2018/19, along with those in the supply chain, supported £10m GVA and 200 FTE jobs in Cornwall out of the total of £30m GVA and 340 FTE jobs in the UK. 15 16

Falmouth University Annual Report 2018/19. ASHE, ONS, 2019; BRES, ONS, 2019.

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Student and Visitor Impacts

03: 3.1

Falmouth generates a further economic contribution through the spending of its students and visitors. This section sets out details on the student population and the expenditure they bring.

The student population 3.2

Falmouth University had a total of approximately 6,400 students in 2018/19. Nearly 5,300 (83%) were on-campus students studying on the two campuses in Falmouth and Penryn. The University’s on-campus student population has grown markedly, tripling in size since 200117. The University also accommodated a further 1,100 (17%) off-campus learners through its franchised partnerships.

3.3

Nine tenths of all students were enrolled in undergraduate courses, of whom 88% studied on campus. Of those enrolled in postgraduate courses, about three fifths (60%) were off-campus learners.

3.4

On-campus students were predominantly studying on a full-time basis. They made up 82% of the entire student body, with on-campus part-time students accounting for a further 1%. Nearly two thirds (64%) of off-campus learners were studying fulltime, which is equivalent to 11% of the total student population.

3.5

Almost 90% of on-campus students were originally from the UK. Those originating from the South West accounted for a significant portion (42%) of on-campus students, whilst a notable share (16%) came from the South East. Half of the on-campus students coming from the South West were originally from Cornwall (21% of the total), with a notable portion originally resident in Truro and Falmouth (44%), illustrating the University’s key role in retaining young people to study in Cornwall.

Figure 3.1 - Falmouth University Students by Type and Mode of Study

c. 6,400 students

■

On-campus full-time

■

Distance full-time

■

On-campus part-time

■

Distance part-time

Source: Falmouth University Student Data, 2018/19

3.6

Unsurprisingly, the majority (94%) of on-campus students resided in Cornwall during term time, predominantly in Truro and Falmouth (86%), with some in Camborne and Redruth (7%). Around 29% of Falmouth’s population is made up of students.

Falmouth University 2030 Strategy.

Figure 3.2 - Home Residence of Falmouth University On-campus Students r----------------------------,

s.,pplier Spend(£m) 0,0<!

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\ \

0.27 0,33

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2.81 Restof the UK - 22.30 FolmouthU111ver,ity

SUpplierSpend (£m)

Oo-o.s Oo.s-1 5 • 10 10-15 FalmoothUniversity

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Source: Falmouth University Student Data 2018/19

Figure 3.3 - Term-time Residence of Falmouth University On-campus Students

On campusle-amers- term time 14

29 82 118 N011hCornwal

378 4354 Restof the UK = 300 FalmouthUniversity

S,;,ylh 1Ea$t Cornwall

Source: Falmouth University Student Data 2018/19

20 km

3.7

Similarly, most off-campus learners were originally from the UK (88%). They primarily came from London (30%), the South East (16%) and East (14%) of England. About a tenth (11%) of distance learners were originally resident in the South West, with students originating from Cornwall accounting for 6% of the total. The term time residence of off-campus students appears largely reflective of their place of origin. However, there was a heavier concentration of students in London (44%) during term-time.

Figure 3.4 - Home Residence of Falmouth University Distance Students

~ - _- _- _- _- _- _ - _- _- _- _- _- _- _- _-_- _- _- _- _- _- -,:-

--------\ \

Distance learners- homeorigin 3

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Dostance learners- homeorigin

15 28

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Do-so D so-100 D 100-150 D 150-200

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Source: Falmouth University Student Data 2018/19

Figure 3.5 - Term-time Residence of Falmouth University Distance Students

Distancelearners- term dme 2

Distancelearners- term time

D o-so

16 28 Rest of the UK= 911

FalmouthUniversity

so-100 100-200 0200-300

20km

Source: Falmouth University Student Data 2018/19

Student expenditure impacts 3.8

Students make a sizeable contribution to Cornwall’s economy as they bring extra expenditure into the area. By drawing on the National Student Income and Expenditure Survey18, which provides data on the expenditure patterns and amounts of students in the UK, we are able to estimate students’ expenditure whilst studying at the University. In turn, the consequent economic impacts within direct suppliers and through multiplier effects were estimated.

3.9

In total, Falmouth University on-campus students’ expenditure supports an estimated:

• •

£25m GVA and 650 FTE jobs in the Cornwall economy; £60m GVA and 1,140 FTE jobs in the wider UK Economy.

3.10 A significant portion of this impact is driven by students who moved into Cornwall for their studies, thereby bringing new and additional expenditure to the area:

• • •

The expenditure of full-time students from outside Cornwall supported £20m GVA and 500 FTE jobs in Cornwall; International students generated around £5m GVA and 120 FTE jobs nationally; The expenditure of full-time students from Cornwall supported £5m GVA and 140 FTE jobs in Cornwall.

Table 3.1 - Economic Impact of Falmouth University on-campus students’ expenditure, 2018/9 (GVA in £ million, 2018/19 prices) Impact of full-time students From inside impact area

From outside impact area

Impact of part-time students

Total

GVA

FTE

GVA

FTE

GVA

FTE

GVA

FTE

Cornwall

140

500

650

1,000

120

1,140

Source: Hatch, 2020. Note: Figures may not add up due to rounding. GVA (FTE) figures are rounded to the nearest multiple of five (ten).

3.11 The University’s body of off-campus learners also supported additional economic impacts through their expenditure, mainly outside Cornwall at a national scale. Incorporating the impact of their spending, the University students’ estimated impact was:

• •

£25m GVA and 650 FTE jobs in the Cornwall economy; £70m GVA and 1,290 FTE jobs in the wider UK economy.

BIS (2013) Student Income and Expenditure Survey, 2014/15.

Table 3.2 - Economic Impact of Falmouth University On-campus and Full-time Off-campus Students’ Expenditure, 2018/9 (GVA in £ million, 2018/19 prices) Impact of full-time students From inside impact area

From outside impact area

Impact of part-time students

Total

GVA

FTE

GVA

FTE

GVA

FTE

GVA

FTE

Cornwall

150

500

650

1,140

130

1,290

Source: Hatch, 2020. Note: Figures may not add up due to rounding. GVA (FTE) figures are rounded to the nearest multiple of five (ten).

3.12 To underline the scale of this local spending in Cornwall, it is worth noting that recent research published in October 202019 found that the town of Falmouth alone had lost a total of £8.8 million in spending in six months due to students being kept away from the town during lockdown. Falmouth was heavily affected due to the size of its student population. It was estimated that the grocery sector had lost £3 million in income, the transport sector £2.3m and sectors related to “socialising”, £1.5m. 3.13 With around 29% of Falmouth’s residents being students, this emphasises their importance to the local and regional economy.

Visitor related impacts 3.14 Students originating from outside Cornwall and the UK receive visits from friends and family throughout the year for a range of reasons. Using conservative assumptions, we estimate that these visits and associated expenditure supported a further £1m in GVA and around 50 FTE jobs in Cornwall.

Studee.com, The university towns and cities that have lost the most money because of Covid-19.

04: Skills Development

Skills Development

04:

Introduction 4.1

The UK creative economy encompasses both the creative industries and creative occupations that sit outside the creative industries. Figure 4.1 provides a summary of the sectoral layers that make up the creative economy.

4.2

Part 2 of this report provides a summary of Falmouth University’s contributions to the creative economy, focussing on its role as a provider of higher-level Future Skills, by generating ideas and innovation and by stimulating business start-ups. We cover these in two separate sections, but note later in Part 3 that the University increasingly sees skills, enterprise and innovation as inseparable elements of its offer.

4.3

We firstly put these contributions into their wider context by highlighting the economic importance of the creative economy nationally and locally, and drawing out the policy priorities of partners.

Figure 4.1 - Components of the UK Creative Economy FALMOUTH UNIVERSITY

- Higher level skills - Ideas and innovation - Start-ups and incubation

CREATIVE ECONOMY

£122bn WIDER CREATIVE SECTOR

Creative occupations in all sectors

- Digital creative businesses - Advertising, marketing and media - Publishing - Architecture

£32bn ARTS & CULTURAL SECTOR - Design businesses - Arts and crafts - Museums and galleries

Source: DCMS, DCMS Sectors Economic Estimates 2018, February 2020.

The importance of the creative economy 4.4

The creative industries alone:

• •

provide 156,000 jobs in the South West of England20. This is the second highest number of creative industries jobs outside of London and the South East. grew five times faster than the UK economy as a whole in 2018 and contributed over £13m per hour21.

4.5

More broadly, the creative economy is estimated to employ 3.2 million people in the UK, providing 1 in 11 jobs.

4.6

The Creative Industries Policy and Evidence Centre creative industries skills monitor22 finds skills shortages in the sub-sectors of crafts; IT, software and computer services; architecture; museums, galleries and libraries; and advertising and marketing. These shortages are most pronounced amongst higher level skills and specialist skills or knowledge as well as creative-tech skills. Employers also indicate a lack of transferrable skills in creative roles, including time and people management and customer service.

4.7

In terms of professional development, the research paper finds that 44% of creative industry employers felt they could do more to meet their training needs. The need to upskill was commonly driven by the introduction of new technologies or equipment and is expected to lead to demand for specialist IT and problem-solving skills.

4.8

Creative industries are central to the UK Industrial Strategy23, and are recognised as key to tackling the challenges and opportunities brought by the Fourth Industrial Revolution. This is especially the case for challenges around automation, given creativity is a human dependent skill, and innovation levels, given the opportunity for creativity to enhance competitiveness across the economy.

4.9

The World Economic Forum future of jobs report names creativity as the 5th most important skill for jobs in 2025. Technology design and programming ranks 8th.

4.10 The Creative Industries Sector Deal24 notes that creative skills are at the heart of the UK’s competitive advantage, especially given growing demand for British creative content globally. The Creative Sector Deal seeks to deliver a 50% increase in exports and 600,000 new creative jobs by 2023.

The need and opportunity for the Cornwall and the Isles of Scilly economy 4.11 As we saw in the introduction to this report, CIOS face a number of long-term economic challenges. From the point of view of skills development, the most relevant include:

• 20 21 22 23 24

Prominent low wage sectors: There are a large number of jobs in low wage sectors, e.g. tourism and agriculture. This reduces the incentive for higher skilled workers to remain in CIOS.

Creative Industries Council analysis of DCMS Statistics, June 2019. DCMS Press Release, February 2020. https://www.gov.uk/government/news/uks-creative-indus tries-contributes-almost-13-million-to-the-uk-economy-every-hour Creative Industries Policy and Evidence Centre, Creative Skills Monitor, Research Paper 1, 2019/20. HM Government, UK Industrial Strategy, 2017. HM Government, UK Industrial Strategy: Creative Sector Deal, 2017.

• • •

A lack of large employers: CIOS LEP has the lowest proportion amongst all LEP areas. 31% of employment is by microbusinesses. This contributes to lower coordination of investment in skills. Relatively low levels of higher qualifications: There is a higher proportion of people with no or low qualifications than with higher qualifications. This is a contributing factor in skills gaps and shortages and business and investment attraction. Small working age population: CIOS LEP has the lowest proportion of working age people of any LEP (58%). This contributes to the attraction of a pipeline of skilled workers and local business vibrancy.

4.12 A key aim of the national creative industries sector deal is to narrow the regional creative industries gap to support the UK levelling up agenda, by developing creative clusters. The strategy presents Exeter and Penzance as existing creative clusters due to recent high growth and high concentrations of creative industries businesses. 4.13 CIOS LEP strongly supports the development of a creative cluster in the area. The creative sector is the first of ten opportunities for the LEP’s Local Industrial Strategy (LIS). This opportunity reflects the area’s artistic heritage, growing digital sector supported by digital connectivity strengths and Falmouth University’s role as a leading UK creative arts university. It recognises that there has been strong growth in the creative economy in recent years. The LEP’s evidence base found that turnover of the CIOS LEP digital cluster grew by 95% from 2011-1725. 4.14 The central vision of the emerging CIOS LEP LIS is that “the Cornwall and Isles of Scilly creative and carbon-neutral economy will be realising opportunities for its people, communities and businesses to thrive.” Innovation and creativity is also one of the strategic drivers for CIOS LEP’s 2030 vision26. The vision states that every sector of the economy needs innovation and creativity to adapt to market demand. 4.15 To achieve higher levels of innovation and creativity the LEP commits to prioritising STEAM based skills in school and Further Education. There is therefore a need to translate these educational strengths into higher level creative skills to match a key area of need in the creative economy, as noted by the Creative Industries Policy and Evidence Centre skills monitor report. 4.16 The 2016 CIOS Smart Specialisation Skills Framework also concluded the key areas of skills shortages and gaps include software engineers and programmers, both areas which require high level creative skills.

“Our future economy will be built on creativity and technology. There will be significant opportunities for people who can combine creative, technical and social skills – skills that are resilient to future automation – and for businesses that can adopt these characteristics.” Emerging CIOS LEP Local Industrial Strategy

4.17 Part of the rationale for awarding university status to Falmouth was to recognise the strengths of the institution and wider area in creative industries and as an approach to tackling some of the area’s structural issues around deprivation, low wage sectors and lower skill levels in the workforce. 25 26

CIOS LEP, 10 Opportunities. CIOS LEP, Vision 2030: The Cornwall and Isles of Scilly Strategic Economic Plan 2017-2030.

Falmouth University’s approach to skills development 4.18 Falmouth University’s approach to its core function of future skills development responds directly to the economic development needs of Cornwall and the Isles of Scilly and the wider UK and the growth opportunities for the creative economy.

Falmouth University’s skills ambition is for its students to either start up their own company, gain work in a Falmouth University owned or partner company, or gain a Falmouth University accredited work placement in Cornwall.

4.19 This approach is defined by two concepts which the University seeks to apply in developing its offer: the Creative Bridge and Doing it for Real. This approach intends to address the need for creative skills to improve innovation and productivity in the UK economy and the need to create graduates whose skills are well aligned with the needs of industry.

Figure 4.2 - Falmouth University’s strategic approach to skills development

Creative Bridge Embedding creative skills across the economy to maximise the productivity of graduates and the industries they work in.

Doing it for Real Preparing students for work by developing the course offer with industry and seeking opportunities for industry experience.

Source: Falmouth University Portfolio Strategy

Creative Bridge 4.20 In 2018/19, Falmouth University provided 91 courses for over 6,000 students. The University takes a flexible approach to its course offer, delivering undergraduate, postgraduate, full and part time, compact courses and on campus and distance learning courses for Falmouth University students and students studying at other institutions such as Cambridge Education Group and The Fashion Retail Academy. 4.21 This flexible offer is designed in line with the Creative Bridge concept to reflect the needs of a variety of learners and the requirements of jobs across the creative economy, to maximise the potential to develop effective and applicable creative future skills. With part time and distance learning courses, the University offers a broader opportunity to develop creative skills, for example for people who are looking to upskill mid-career.

4.22 The BA Sustainable Festival Management course is run over two years to reflect the need for students to experience the industry at its peak time in the summer months. This course also exemplifies the Doing it for Real approach. It was created in partnership with the Eden Project with the second year of study based at the Eden Project. The course is also accredited by A Greener Festival, a not-for-profit company recognised in the industry globally for helping events and festivals reduce their environmental impact.

“It is essential that we have event professionals trained in sustainable practices to create a positive future for festivals. What a fantastic course.” Melvin Benn, Managing Director of Festivals, Festival Republic

Figure 4.3 - Case Study: ESF Innovation in Higher Level Skills project Led by Truro and Penwith College and in partnership with The Cornwall College Group, the University of Exeter and the University of Plymouth, Falmouth University is delivering an employer-led approach to expediting greater engagement in higher level skills. The project is also boosted by a £1.97 million in European Social Fund investment. Partner institutions work directly with SMEs and microbusinesses in Cornwall and the Isles of Scilly, supporting them to articulate their specific needs, identify short term solutions for business growth and inform the development of new higher level skills programmes. These programmes include trialling of innovative new provision, alternative delivery models and high-quality work placements. Through this scheme, Falmouth University has engaged with 11 local SMEs to provide bespoke student placements on the basis of business needs. Partner SMEs include digital marketing agency Hedgehog Digital, facial recognition tech company TouchByte, and digital furniture maker Aaron Moore. Source: Falmouth University

Doing it for Real 4.23 The University also takes a responsible approach to its portfolio of courses, ensuring that they are designed in line with industry need in order to maximise the economic opportunities for graduates. The University’s product development team undertake market research on future skills and labour market data and job adverts to predict changes to and trends in skills demand. The communications team then filters these findings down to help them to make future facing skills decisions. The Games Academy for example, outlined in Figure 4.4, was developed in response to market trends and continues to be adapting successfully to suit the market. 4.24 Wherever possible, courses are designed in partnership with industry or to apply industry experience. For example, the MA Prosthetic Effects course is delivered in collaboration with Cornwall-based special effects and prosthetics industry leader Gorton Studios.

4.25 Falmouth University’s photography agency Mayn Creative offers a link between photography students, graduates and industry and creates opportunities to work on live briefs led by experienced professionals. This is delivered in partnership with several local organisations and businesses including Devon and Cornwall Police, Surfing Medicine International and sparkling wine company Wildlife Botanicals.

“Working with Mayn Creative helped me to achieve my First-Class degree and has assisted to push my name as a reputable local photographer in Cornwall.” Neal Megaw, Freelancer and Mayn Creative Associate Photographer

Figure 4.4 - Case Study: Games Academy Falmouth University’s Games Academy exemplifies the University’s approach to delivering degree courses according to skills need. The IT, Software and Games subsector makes up the greatest contribution to the GVA generated by the creative industries in the UK. It is also the largest subsector for creative industries service exports. Despite this, the Prospects report into skills shortages in the UK finds programmer and software developments professionals are some of the hardest vacancies to fill with 50% of vacancies reported as hard to fill and 48% of vacancies face skills shortages. The Games Academy delivers a course portfolio aimed at providing current industry creative and technical skills. This includes courses in AI, computing, VR and immersive computing, art and design, robotics, user experience design and web development. This offer is reviewed annually to ensure it reflects industry skills need. Students also have access to one of the UK’s largest games development studios equipped with industry-standard software and games engines. The Academy was featured as one of the top 40 games schools in the world by the Princeton Review, a leading US admission services company, which equates to a place as the top English gaming school and 4th in Europe. This is especially important given the national and local emphasis on the lead role of the creative industries in creating a globally competitive economy. Through the Metamakers programme, the Academy also delivers research into the creative potential of software for commercialisation and engages with local schools to build aspirations to work in the games industry. Source: Consultations & DCMS Statistics, February 2020

“It’s important for universities to make sure their facilities remain industry relevant. Falmouth University has a high quality of technical facilities and performing arts spaces which can help students and young people to advance in their industry.” Lee Hornsby, Creative Industries Federation

“The Games Academy ranks above established names such as MIT, Full Sail and DePaul University, all huge US institutions.” Dr Douglas Brown, Director of the Games Academy

Skills Development Impacts: Employment 4.26 HESA UK Performance Indicator data shows that 96% of Falmouth’s 2016/17 graduates are employed or studying, compared to 94% of creative arts and design graduates27. 4.27 The strength of Falmouth University’s strategic approach to delivering skills is reflected in its Gold TEF rating. The TEF panel’s statement of findings reports that this is based on the University’s:

• • •

“outstanding employment outcomes and an effective strategic focus on vocational and professional education, which indicate that students acquire knowledge skills and understanding that are most highly valued by employers.” “outstanding levels of satisfaction with academic support and assessment and feedback from students of all backgrounds, notably exceeding the provider’s benchmark.” “highest quality physical and digital resources appropriate to industry and which are used by students to enhance learning.”

4.28 These strengths are illustrated in the route into work of BA Illustration graduate Jake Hawkins, outlined in Figure 4.5.

Figure 4.5 - Case Study: Jake Hawkins, BA (Hons) Illustration Graduate Falmouth University’s undergraduate course in illustration is designed to provide students with the skills needed to succeed in the visual communications industry. Students are supported to build their own online marketing campaign, given the opportunity to showcase their work in the University’s in-house publication and supported to develop professional practices through work placements and by seeking commissions while they study. Optional national and international study trips also allow students to visit potential employers and also to exhibit their work.

“Very high proportions of students from all backgrounds continue with their studies or progress to highly skilled employment or further study, notably exceeding the provider’s benchmark” Teaching Excellence Framework, Statement of Findings: Falmouth University

This approach combined with a strong work ethic proved effective for Jake Hawkins. Soon after graduating from Falmouth University Jake was employed as a Designer at The Telegraph. Jake has also been commissioned to deliver a Gay Times cover and report cover for Iraq’s first LGBTQ+ organisation. In an interview with the University’s marketing team, Jake noted the overarching theme to his work was formed whilst at Falmouth University. Source: Falmouth University website and Teaching Excellence Framework statement

HESA, UK Performance Indicators, 2018. Based on full time first degree graduates.

Skills Development Impacts: Self-employment 4.29 Falmouth University exceeds in preparing its graduates for self-employment. 22% of leavers are in self-employment compared to 5% across all UK universities, and 1% of all UK selfemployed graduates come from Falmouth University28. Falmouth University was also rated the second-best UK university for people who want to be a business leader by Hitachi Capital Invoice Finance based on a study of 9.5 million former UK students29. Self-employment skills are particularly important for work in the creative economy and for workers in Cornwall. Freelance and portfolio working accounts for a third of the UK’s creative workforce compared to 15% of the overall workforce30. Cornwall has a relatively low proportion of large employers31, which traditionally has implications for the level of investment in skills and training opportunities. Selfemployment is an option for entrepreneurial students who wish to remain in Cornwall despite restricted employment opportunities compared with London and the South East. By starting up businesses in Cornwall, Falmouth University graduates provide an opportunity for stronger future growth in Cornwall which could generate further creative employment.

Figure 4.6 - Case Studies: Tom Raffield Ltd and Studio Mutiny Since discovering the traditional technique of steam bending wood whilst studying at Falmouth University, Tom Raffield has become one of the world leaders in this ecological technique. Tom’s company designs and crafts lighting and furniture. Now with 30 employees, a mini-factory and six-acre woodland, the company is thriving and supplying John Lewis and various celebrities amongst other clients. Tom even built his own house out of steam bent wood and featured on Channel 4’s Grand Designs.

Studio Mutiny is a games development company founded by a team of Falmouth graduates. Recently Studio Mutiny secured £25,000 from the UK Games Fund, beating 12 teams from across the UK as part of the Transfuzer competition. The funding will allow the team to develop their game, Sai, which began as a third year student project. Studio Mutiny intend to remain in Cornwall, continue to work with the Games Academy and mentor future students.

“My aim is to innovate with everything I do. And design through making is fundamental to innovation. I picked up this passion while at Falmouth and try to never lose sight of it.” Tom Raffield, Founder of Tom Raffield Ltd

“This win is a testament to the way Falmouth University teaches its students in innovative ways, particularly our focus on teamwork.” Dr Douglas Brown, Director of the Games Academy

Source: Falmouth University website

28 29 30 31

2020 Graduate Outcomes Survey. Hitachi, UK university’s students most likely to start or manage a business, 2020. Creative Industries Federation, Creative Coalition: A Plan to Reimagine, 2020. CIOS LEP, Draft LIS, 2020.

Skills Development Impacts: Public outreach 4.30 Public outreach is an important part of Falmouth University’s remit as a Cornish anchor institution given the opportunity to increase local employment aspirations in the context of high levels of deprivation and distance from urban centres with larger employers.In 2018/19, Falmouth University provided over 10,000 public events. This is almost 50% more events held on average than similar universities, as defined by the Knowledge Exchange Framework. The benefits are three-fold: providing industry experience for students, encouraging local people to consider higher education and work in the creative economy, and contributing to Cornwall’s cultural and heritage offer.

“Over the last decade, the skills profile of the CIOS LEP workforce has changed considerably. The proportion of working age people with higher education qualifications has doubled, while the proportion with no qualifications has halved. Falmouth University has been fundamental to inspiring residents from all backgrounds to consider higher education.” Emily Kent, CIOS LEP

Figure 4.7 - Case Study: Academy of Music and Theatre Arts Falmouth University’s Academy of Music and Theatre Arts (AMATA) delivers HE courses and operates as a working venue, providing 11 performance and rehearsal spaces, a flexible theatre space, 650 square meters of sprung dance floors, live rooms, control rooms, and digital and analogue equipment. AMATA students work with industry partners, such as record label Island Records, music multinational Yamaha and digital music distributor RouteNote, collaborate with gaming, animation and film students and engage with AMATA alumni. Notable alumni who have engaged with AMATA students include Dominic McKeirnan, Visual Creative Coordinator at Warner Brothers Records, Marcus Knight, Product and Marketing Manager at Cooking Vinyl and Joe Pym, Streaming and Commerce Manager at Island Records. AMATA also offers students the opportunity for industry experience via its industry quality performance facilities. In the 2018/19 academic year, AMATA hosted 185 free and ticketed performances, public lectures, community classes, workshops for almost 18,000 attendees. These events are an important part of Falmouth University’s offer to the local culture and community.

05: Innovation and Enterprise

Innovation and Enterprise

05:

Importance of creative innovation and business growth 5.1

As well as developing skillsets to meet industry demand, Falmouth University has the ability to respond to issues faced by the CIOS and UK economy and align to opportunities provided in the creative industries, by improving the levels of innovation and business growth.

5.2

The UK Industrial Strategy32 reports that the UK lags behind competitors in terms of productivity. Two main drivers of UK productivity levels highlighted are innovation levels and the business environment:

• • 5.3

Despite being a leader in measures of research excellence, the UK does not do enough to translate research into industrial and commercial applications, and there is a need to invest more in R&D and to build R&D excellence across the UK. Although the UK has strengths as a place to start and grow a business, there remain specific barriers to business growth across UK regions.

The Industrial Strategy describes the creative industries as a world-class strength of the UK economy. The industries are expected both to benefit from greater innovation levels and to generate greater levels of future business growth. This is particularly important given the opportunity and need for creative businesses in response to the Fourth Industrial Revolution around growth of artificial intelligence and data technologies. However, there are existing creative industries challenges demonstrated by the Creative Sector Deal33 such as the fragmentation of a heavily SME-based sector, and market failures, such as poor access to finance outside of London and the strength of IP rights.

The need and opportunity for the Cornwall and the Isles of Scilly economy 5.4

Cornwall and the Isles of Scilly face various innovation and enterprise development issues34:

• •

32 33 34

A lack of large employers: 31% of employment is in microbusinesses. This contributes to lower coordination of investment in innovation, access to large funding pots and collaboration with large research organisations. Limited research development and innovation (RD&I) experience, infrastructure and investment: CIOS has the lowest level of all LEP areas. Companies spend an average 0.39% of GDP on R&D compared to a UK average of 1.7%. A lack of IP advice and information on the potential commercial opportunities presented by investment in R&D are a barrier to this. Business density: Much of CIOS has low business density. This results in fewer opportunities for peer-to-peer support, collaboration and knowledge transfer. Below average growth of new businesses: Compared to the UK average, fewer start-up businesses scale up. This limits the opportunities of scale ups to boost innovation, productivity and high-quality job creation.

HM Government, UK Industrial Strategy, 2017. HM Government, UK Industrial Strategy: Creative Industries Sector Deal, 2018. CIOS LEP, Draft Local Industrial Strategy, 2020.

5.5

The draft CIOS LEP Local Industrial Strategy reports that CIOS’s research institutions including Falmouth University have a fundamental role to play in translating research into commercial opportunities. Noting Falmouth University’s strengths in generating start-ups, the strategy also states the importance of encouraging and supporting businesses to scale up by providing suitable workspace and access to finance.

5.6

The LEP’s innovation and enterprise ambitions include:

• • • • • •

Improving productivity, efficiency and R&D expenditure across the businesses base; Increasing trade and the expansion of local business supply chains; Achieving greater connectivity and networking for businesses, both physically and digitally; Better promotion of CIOS sector strengths and capabilities nationally and globally, nurtured by an increase research institute presence; Greatly improving dissemination and diffusion of innovation, new products, technology and alternative business models and practices; Achieving productive connections across sectors, linking businesses with academia and other relevant skills development initiatives.

Falmouth University’s approach to innovation and enterprise development 5.7

Having been established in part to address the needs of the Cornwall and the Isles of Scilly economy, Falmouth University continues to recognise its responsibility as a local anchor. The university strategy reflects the University’s potential to attract diversified skillsets, investment opportunities and raise productivity. It fosters a high level of involvement in the wider economy, to create opportunities for graduates to stay in Cornwall, and maximise benefits of innovation diffusion, and enterprise support for the local economy and UK creative industries.

5.8

Research and innovation at Falmouth University aims to tackle the challenge of the Fourth Industrial Revolution by applying creativity, digital technology, cross-disciplinary collaboration and entrepreneurial activity. Where possible the University seeks to innovate alongside industry to develop high growth markets. Although this approach responds to global needs, the University is committed to using research and innovation to boost the Cornish economy.

5.9

To respond to local challenges, Falmouth University research programmes are designed to follow the themes of:

• • •

Creative Connected Communities: tackling issues around education, health and wellbeing, societal cohesion, environmental awareness and the enabling economy; Design Thinking: to address climate change, energy security, an aging society and health and wellbeing; Digital Economy: focused on the opportunities digital technologies present in the creative industries and other sectors such as e-health and wellbeing, space and aerospace, marine and agri-tech.

Open Innovation 5.10 Falmouth University’s Open Innovation approach takes a transdisciplinary, whole ecosystem view to innovation and enterprise development. 5.11 Figure 5.1 outlines how Falmouth University fits with the wider innovation ecosystem as a partner, catalyst and civic lead. It seeks to challenge traditional HE structures and brings together insight from crosssector partners. By viewing the innovation ecosystem as a whole, the University can align elements of that ecosystem for greater impact. For example, by increasing skills levels through teaching, helping to attract funding and investment and collaborating with industry and the public sector.

“Falmouth University’s senior leadership team are very much engaged with the local business community, more so than would be the traditional role of a university.” Kim Conchie, CEO of Cornwall Chamber of Commerce

Figure 5.1 - Open Innovation approach

I ~~~~:A;~~~ )

'-'~

Source: Falmouth University, Knowledge Exchange Framework Local Growth and Regeneration Narrative, 2020

5.12 The University applies Open Innovation to develop the local business ecosystem through the following core routes:

• • • • •

Undertaking research to address Cornwall’s key industry and resident needs; Supporting Cornwall’s businesses to innovate and connect with the University’s research; Enabling the creation of high growth businesses in response to local industry opportunities; Unlocking regional prosperity through an active approach to policy and facilitating investment attraction; Attracting talent: Falmouth University and the ecosystem attract talent to the region providing a pipeline for businesses to draw upon.

5.13 Falmouth University’s Launchpad programme responds to several of its innovation and entrepreneurship aims. The Launchpad programme is introduced in Figure 5.2.

Figure 5.2 - Case Study: MSc Entrepreneurship & Launchpad Falmouth University’s Launchpad programme provides postgraduate entrepreneurs with the opportunity to develop a high-growth tech business while gaining a master’s degree in Entrepreneurship. The University is one of twenty UK universities to be awarded ERDF funding by UKRI to operate a University Enterprise Zone (UEZ). With £1.02m of funding awarded, the University was able to leverage a further £4.5m of ERDF and £900k of Cornwall Council funding. This funding supported the unlocking of the Launchpad programme to 2022.

“Launchpad is the forerunner of a new approach to economic development. It presents an opportunity to kick start the next high growth business in Cornwall and the Isles of Scilly, which would have far reaching implications for local jobs and businesses.” Glenn Caplin-Grey, CIOS LEP

Cllr Bob Egerton, former Cornwall Council Cabinet portfolio holder for Culture, Economy and Planning, remarked on the UEZ award: “This announcement is great news for Cornwall. We are increasingly seeing technology rapidly changing the way we live and work and it is clear that creativity and the digital economy will be key to creating high value jobs and products here in Cornwall. That’s why we’ve put this sector at the centre of our economic development strategy.” The programme begins by forming teams of entrepreneurs and providing them with a set of challenges based on known market gaps within the digital economy, as articulated by Launchpad’s industry partners such as BBC Studios, Amazon Web Services and Sony Interactive Entertainment. The teams respond by developing a new business concept; Launchpad then acts as an incubator and accelerator to help bring their product or service to market. In addition to a clear market focus based on evidenced need, students are supported with a £16,000 stipend, workspace, access to training and expertise, pitching opportunities and a network of current and previous Launchpad businesses and industry partners. The Launchpad programme aims to generate economic growth through the creation of businesses and jobs and attraction of inward investment and entrepreneurs. All Launchpad companies are required to remain headquartered in Cornwall for five years, to boost the local entrepreneurial ecosystem. Now in its fifth year, Launchpad has created 23 businesses. Examples of the paths of Launchpad companies are given in Figure 5.8 and 5.9. Falmouth University and Cornwall Council both retain a share of each business and, through share recycling, Launchpad aims to create an evergreen fund to support future start-ups. Launchpad has been recognised internationally for its approach to enterprise development, winning awards at the Reimagine Education Awards in Philadelphia USA in 2016, and the Guardian University Award for Entrepreneurship in 2017. Launchpad regularly hosts delegations from other universities, senior civil servants and UKRI amongst others. Source: Consultations with Falmouth University staff: Jonathan Eddy, Kamran Harandy, Cyril Janody & James Murray

Impacts on innovation and enterprise in Cornwall: Innovation 5.14 Across Falmouth University’s research themes of creative connected communities, design thinking and digital economy, the University’s academic staff are working on a broad range of current, local issues. Examples given below demonstrate the impact Falmouth University is delivering through its academic research and innovation.

Figure 5.3 - Case Study: South West Creative Technology Network Falmouth University partnered with the South West Creative Technology Network (SWCTN), a £6.6 million Connecting Capability Fund initiative to expand the use of creative technologies in the South West. Through the network, the University has been developing relationships across Cornwall and the wider South West. To date, Falmouth University has provided the highest number of industry applications through the scheme pro rata per institution.

“Building on the region’s wellestablished digital expertise, this collaborative project offers real opportunities to deliver economic impact for the South West.” Professor Tanya Krzywinska, SWCTN Project Lead for Falmouth University

Nine of the University’s academic staff have been involved as fellows, working in a mixed industry team to explore the themes of Immersion, Automation and Data. Four of these teams have received prototype awards of up to £40,000 to continue their research. Source: Falmouth University website and Falmouth University Knowledge Exchange Framework: Public and Community Engagement Narrative Template, 2020

Figure 5.4 - Case Study: wAVE Immersive Experiences in Museums Falmouth University has partnered with CIOS LEP, Cornwall Museums Partnership and five participating Cornish communities to deliver augmented and virtual experiences in Cornwall’s museums, attracting £346,000 of UK Government Coastal Communities Funding. The scheme will leverage Cornwall’s distinct history and growing immersive-tech sector and position the county at the forefront of the technology’s transformative potential through:

• • •

Development of technologies such as VR headsets, HD projection, and CGI by Falmouth University academic staff to engage visitors with heritage sites and artefacts; Involvement of local communities to raise the profile of Cornwall’s cultural and heritage offer and allow local tourism businesses to future proof their offer; Strengthening of knowledge sharing and digital skills development across Cornwall.

The wAVE project intends to attract up to 25,000 additional visitors per year to the area. This project responds directly to Cornwall’s needs and opportunities by aligning traditional sector strengths with emerging opportunities, while engaging and inspiring the local community. Source: Cornwall Museums Partnerships, wAVE Immersive Experiences in Museums

Figure 5.5 - Case Study: South West Centre of Excellence for Satellite Applications Falmouth University is a partner of the South West Centre of Excellence for Satellite Applications (SWCoESA) alongside the University of Plymouth and led by the University of Exeter. SWCoESA links academic staff involved in developing satellite applications with industry, start-ups and SMEs in the South West. By building on research expertise and regional assets, the partnership seeks to boost the local space and satellite industry. This is in line with the CIOS LEP plan which includes the space sector as one of ten key opportunities for the region. One of the satellite application projects led by a Falmouth University academic, Connected Health Care, aims to deliver satellite led solutions to connecting primary and secondary care and service users in the South West’s rural communities. The project will implement a “Test and Learn” approach and evaluate the potential clinical and commercial value of a secure satellite connected infrastructure in improving quality, accessibility and efficiency within the health sector. Source: Falmouth University website

Impacts on innovation and enterprise in Cornwall: Collaboration 5.15 Collaboration with local businesses is an important route through which Falmouth University leverages its resources of academic, student and graduate talent and facilities to boost business growth in Cornwall and provide benefits for its students and local people. Key Falmouth University schemes aimed at improving levels of business collaboration are the Academy of Innovation and Research (AIR) and Launchpad Outreach scheme pilot. The impact of these is discussed in Figure 5.6 and Figure 5.7.

Figure 5.6 - Case Study: Academy of Innovation and Research The Academy of Innovation and Research (AIR) building exemplifies the University’s Open Innovation approach by enabling connections between research, industry and study. The AIR building is physically connected to the Launchpad Building via an interconnecting space which embodies the ‘Creative Bridge’ concept and symbolises the University’s role in linking innovation and enterprise. AIR acts as a central hub for research and innovation and provides:

• • • • • •

dedicated space for the University’s three core research themes; flexible space for collaborative working, including a television screen which allows multiple users to share digital content on screen; an events space designed for workshops and knowledge sharing; informal seating and hospitality areas to increase opportunities for knowledge sharing; meeting spaces of different sizes, equipped with audio visual equipment; PhD student hot desk facilities.

The space is designed to enable opportunities for academics, students and external organisations to work together to disseminate knowledge and encourage business growth.

Figure 5.7 - Case Study: Launchpad Outreach pilot The focus of the Launchpad Outreach pilot is to support SMEs in CIOS to develop new products or services, but its role within the University is much further reaching. The core function of the programme is to assess product or service development plans against market intelligence and advise businesses on their growth plans. In practice, Launchpad Outreach takes a more holistic approach to collaboration by developing strong relationships with businesses by reviewing how the University can best support their needs and then connecting them to the most suitable opportunities. As well as the Launchpad Outreach offer itself, this could involve accessing academic advice or student skillsets, university workspace or facilities, a professional development course, or acting as a Launchpad industry partner. Commencing just six months before Covid-19 took hold in March 2020, Launchpad Outreach has already engaged 78 SMEs across a broad variety of sectors. 39 of these signed up for business support with a view to develop new products or services and many others have been signposted to engage with the University in other ways. Launchpad Outreach continues to build relationships with the Cornish SME community and attract increasing client referrals. Source: Consultation with Rachel Koerner

Impacts on innovation and enterprise in Cornwall: Business creation 5.16 Business creation is important because as well as creating employment for Falmouth University graduates and local people, each business created represents an opportunity for innovation and value creation in the creative industries. Launchpad is designed to target business growth outcomes and is an important contributor to the number and success of Falmouth University’s new businesses as evidenced by the examples in Figure 5.8 and Figure 5.9.

Figure 5.8 - Case Study: Launchpad Start-up Codices Interactive Ltd Codices Interactive Ltd was created through Falmouth University’s Launchpad programme in response to challenges set by Amazon and others. Valued at over £3.5m, Codices now works with live streaming platform Twitch, the Premier League and Jagex, and supports brands and influencers to create live interactive shows. Its two products are used by 1.5m people per month.

“Falmouth University’s Launchpad provides the best environment for starting a business.” Tim Edwards, Co-founder & CEO of Codices

Its Co-founder & CEO, Tim Edwards, undertook the MA Entrepreneurship course in 2017 after facing barriers to setting up a business previously. Three years on, Codices employs 11 people in Cornwall and has won numerous accolades including CogX’s best AI product in entertainment and DTG’s Transformers competition. It was chosen as one of Tech Nation’s 10 Rising Stars, and has raised a total of £850,000 in funding. Tim notes that, without Launchpad, he would not have had the inputs required to grow the business. Source: Consultation with Tim Edwards, Codices Interactive Ltd

Figure 5.9 - Case Study: Launchpad Start-up Hertzian Ltd Created in the pilot year of the Launchpad programme, Hertzian Ltd is now a market leader in using AI technology to provide client businesses with analysed market data. Five years on from its inception in Launchpad, Hertzian has increased in value year on year and is still based in Truro. The company works with a variety of high profile and international partners and clients across the digital entertainment and healthcare industries, for example Ubisoft, Avalanche, Jagex, and the clients within the NHS. Hertzian is well integrated into the Cornish economy, boosting the digital technology cluster supply chain by making use of local service providers and providing software development apprenticeships in partnership with Truro College.

“The support Falmouth University gave during incubation meant everything for the business’ success in starting up. Since then elements of this support have adapted and continued through business acceleration. Now Hertzian is committed to supporting local business and employment.” Christopher Weavill, COO & Co-Founder of Hertzian Ltd

Christopher Weavill, COO & Co-founder of Hertzian, identifies that Hertzian wouldn’t exist without the conditions the Launchpad programme provided him and his co-founders during incubation. He reports that Launchpad creates a ‘best of all worlds’ environment for a business’ first year. Aspects which create this environment include establishing a cofounding team, provision of office space, income, a network of academics, learning support, commercial experience and access to mentors in industry. Christopher also noted that since the business has left Launchpad, the support of the non-executive board director provided by the programme has been helpful in supporting the company’s governance. Hertzian plans to continue growing to expand their games and health sector client base and expanding into wider sectors. They intend to continue working with the Cornwall supply chain to build the local digital cluster. Source: Consultation with Christopher Weavill, Hertzian Ltd

Levering in funding for economic development and regeneration in Cornwall 5.17 Regeneration of the local economy is one of the drivers for the development of Falmouth University. Consultees noted that the transformational impact on the University’s supply chain over the past twenty years is clear. 5.18 In its role as an anchor institution the University provides economic stability and an opportunity to attract investment into Cornwall. Recognising this responsibility, the University has built formal partnerships with Cornwall Council and CIOS LEP, and senior representatives of the University have served on several LEP boards.

5.19 To date, the University has attracted £225m of EU and UK investment. Falmouth University’s total income from regeneration and development programmes is 73% higher than the average for UK universities (with £1.1m more attracted in 2018/19). 5.20 Through its involvement with CIOS LEP, Falmouth University helped formulate a £40m EU funded CIOS Investment Fund in response to the local SME finance market gap.

“The university is a great asset for organisations in Cornwall to leverage bids for larger funding pots which wouldn’t be accessible otherwise.”

5.21 This market gap is based around the finding that CIOS is the location of 1% of the UK’s SMEs but only 0.1% of its equity deals.

Emily Kent, CIOS LEP

5.22 An early assessment report of the CIOS Investment Fund found it has impacted the productivity and sales of its beneficiary businesses and is showing encouraging early signs for the CIOS business ecosystem such as improved financial knowledge, strengthened financial networks and raised investment opportunities.

Figure 5.10 - Outcomes achieved as a result of receiving CIOSIF finance Increased skill s in the existing wo rkforc e Increased inv estm ent in R&D Progressed p rod ucts/se rvices towards comm ercia li sat ion Avoid ed bus iness clos ure Introduced more effic ient processes Int roduce d new p rodu cts or services Appli ed for pat ent s or licences Increased inno vatio n in, o r adoptio n of, low carbo n techno log ies -

0 Equity (n = 4) ■

Debt (n = 4) ■

Number of cases

Source: SQW Ltd, Cornwall and Isles of Scilly Investment Fund - Early Assessment Report, 2020

06: Falmouth in 2030

Falmouth in 2030

06: 6.1

The preceding sections have established Falmouth’s current contribution to the Cornwall and UK economies and its distinctive role in the creative economy. The University has put together an ambitious strategic plan up to 2030 to build on its strengths and respond to the drivers that are shaping higher education and the wider economy.

6.2

This section outlines the key features of the strategic plan from the lens of economic impact, concluding with a case study of Launchpad+ to exemplify some of these principles in action. Section 7 then provides an estimate of how Falmouth’s economic contribution is likely to develop, should the targets in the plan be reached.

Overview of the 2030 Strategy 6.3

The overall vision for 2030 is for the University to be a creative innovation hub. At the heart of the strategy are a number of important cross-cutting themes, including cross-discipline working, ‘Doing it for Real’ and Partnering with industry.

6.4

Building on its foundations as a university designed to drive economic development in Cornwall, the strategy magnifies this anchor institution role by partnering with the public and private sector to support the county’s economic, skills and enterprise agendas. The 2030 Strategy has been designed to align with, and help deliver on, the objectives of local partners as well as the broader opportunities for the UK creative economy.

6.5

The Strategic Plan has six key elements and is underpinned by three sub-strategies, as summarised below:

Figure 6.1 - 2030 Strategy Elements Open Innovation

Making Future People

Doing it Differently

Taking Cornwall Global

Being Sustainable

Being Gold

2030 People Strategy

2030 R&I Strategy

2030 Portfolio Strategy

6.6

From the point of view of economic impact, the most important elements of the plan include:

• • •

a rebalancing of income sources between accredited academic programmes and innovation, research and commercial ventures, as shown below. Income from the latter is expected to increase to £70m per annum from a base of £2.8m in 2016/17 (25-fold growth). very significant growth in business start-ups and associated job creation, which is expected to grow to 1,575 jobs by 2030. To put this into context, recent estimates have put the total number of jobs in the creative industries at 4,800 in 201835. diversifying the teaching portfolio into new markets and subjects, responding to industry need. Overall student numbers are expected to grow to 15,500 (142% growth). Off-campus students are expected to grow nearly eight-fold to 2030, as figure 6.4 shows.

Table 6.1 - Selected Targets to 2030 on Business Start-ups Baseline 2015/16

Target 2030

28%*

33%

Number of new companies started

111

Number of jobs created through start-ups

1,575

Percentage of graduates in self-employment 15 months after graduation

*2016 - six months after graduation

Figure 6.2 - Income Sources £80 £60

£20 £3m £0

2016 / 17

2019 / 20

Accredited academic programmes

■

2029 / 30

Inno vation, research and commercial ventures

Figure 6.3 - Student Growth Projections 9,000 V,

c QJ

""O

ai E ::,

8,000 7,000 6,000 5,000

4,000 3,000 2,000 2020

2021

2022

2023

2024

On Campus --

2025

2026

2027

Off Campus -

Source: Falmouth University 2030 Strategy

Cornwall Business Observatory, Cornwall’s Creative Industries and Creative Tech, 2019.

2028

2029

■

6.7

The strategic plan commits to help Cornwall to “go global” by building a pipeline of new highgrowth, high value companies based in Cornwall but trading globally, and by attracting staff and students from around the world.

Launchpad+ 6.8

The Launchpad+ development serves to illustrate well the University’s vision for blending together skills, enterprise and innovation in future. A summary is provided below. Figure 6.4 - Case Study: Launchpad+ Falmouth University is partnering with Cornwall Council to deliver a pioneering element of the planned Pydar regeneration project. Launchpad+ will be a new, digitally focused and entrepreneurial innovative learning and living environment. It will help create jobs in highgrowth, high-value business that will benefit Cornwall’s wider economy. The new building is expected to accommodate over 500 students, as well as existing and new businesses. Launchpad+ will be a state-of-the-art building in the heart of Truro, which will provide a blueprint for how innovation, enterprise and education will weave together in the future. Falmouth University’s vision is for Launchpad+ to be a hub for the screen and digital sectors creating jobs, prosperity and community, whilst ensuring top talent stays in Cornwall. It will be open ‘24/7’, providing a new model of ‘living, learning, working and playing’. This will support Truro by making it a destination city; reinvigorating the night-time economy; mixing people and businesses with different backgrounds, skills & experiences; supporting an open and inclusive community; creating a ‘Soho’ atmosphere where culture influences businesses and businesses influence culture. It will be a vibrant marketplace where people do business in ideas, opportunities, skills and needs. Launchpad+ will support a ‘Live, Work, Make’ approach. This will involve multigenerational living where students, typically under 30, will be based at Launchpad+ full-time and mix with older residents in mutually beneficial ways. A core aspect of Launchpad+ is the development of future skills for the future economy. It will focus in particular on the growing screen sectors – film, television, games and animation – but with an emphasis on entrepreneurship. Subject areas are expected to include Immersive & Mixed Reality, Artificial Intelligence, Experience Economy, E-Sports & Edutainment, Robotics, and Post-Production & Visual Effects (VFX). Launchpad+ will not simply just support courses from undergraduate, postgraduate to PhD level in a traditional way - learning and enterprise will be truly blended. It will give students industry-focused ‘micro-credentials’ – the skills really required by employers; create a supportive environment for incubating new companies and innovations; and enable businesses to access new talent and the latest technology. Source: Falmouth University

07: Economic Impacts at 2030

Economic Impacts at 2030

07: 7.1

This section sets out estimates of how the University’s economic contribution can be expected to change as a result of the implementation of the 2030 Strategy.

Drivers of economic impact 7.2

In order to estimate the University’s economic impacts at 2030, we have drawn on the relevant projections within the plan, which serve to drive various sources of economic impact. These are summarised in Table 7.1, along with the links to economic impact:

• • • •

The overall growth in income and various on-site activities will increase the institution’s economic footprint in Cornwall through increases in direct GVA, employment and knock-on multiplier effects from growth in staff numbers and expenditure. The increase in student numbers will drive student and visitor spending locally from on-campus students. It should be noted that most of the growth will take place in off-campus provision. This will not generate any additional local expenditure but will have significant skills impacts. The increase in enterprise activity manifested in the number of business start-ups will lead to direct job creation and associated direct GVA, as well as multiplier effects from supply chain linkages and staff spending. The increase in research and innovation activity will drive R&D spillovers as ideas become commercialised and applied, generating economic returns as well as wider social benefits.

Table 7.1 - Change in Key Economic Impact Drivers Key driver

Income

Students

Start ups

2016/17 baseline

Projection by 2030

£53m

£145m

5,428

6 (2014/15)

15,500 (8,500 off campus)

How this drives economic impact • Increases direct GVA • Growth in Operations drives rise in direct staff • Consequent supply chain and induced multiplier effects • Student and visitor spend impacts (including multiplier effects) from on-campus students increase • Note: growth in off-campus students may drive some student spend impact in rest of UK but note attribution • Increase in number of graduates drives skills impacts

111 • GVA and job creation from start-ups increases

Jobs created through startups Income from innovation

19 (2014/15)

£2.8m

1,575

£70.2m

• Increase in R&D spillovers locally and nationally

Source: Falmouth University 2030 Strategy and baseline data from Falmouth University

Economic impacts by 2030 7.3

Bringing together all of the elements of the University’s current economic contribution, our assessment has found that the University contributes a total of £100m in GVA and supports 2,030 FTE jobs in Cornwall, and £160m in GVA and 2,760 FTEs in the UK as a whole36.

7.4

This implies that the University currently accounts for at least £1 in every £109 of GVA generated in Cornwall (excluding those effects that have not been quantified).

7.5

Using this baseline valuation and the projections outlined above, we estimate that the University’s economic contribution could grow to £200 million in GVA and 4,260 jobs by 2030 (2018/19 prices), equivalent to a more than doubling over the period. The table below shows the components of this. As this shows:

• • •

The demand side economic footprint almost doubles, rising to £130m in GVA and 2,090 FTEs, driven by growth in on-campus operations and the associated multiplier effects. The supply side impacts rise more significantly from their current base, given the projected increases in start-ups and innovation activity (by 400% in GVA terms). In simple terms, all things being equal, this would see the University’s total economic contribution rise to 1 in every £54 in GVA in Cornwall. This is most likely an underestimate as it does not count the economic contribution of graduates that remain in Cornwall for work.

Table 7.2 - Economic Impacts in Cornwall, Baseline and 2030 (GVA in £m, 2018/19 prices, undiscounted) Baseline, 2018/19

Target, 2030

Change (abs and %)

GVA (£m)

FTE jobs

GVA (£m)

FTE jobs

GVA (£m)

FTE jobs

Direct

770

870

31 (70%)

100 (13%)

Indirect

100

0 (0%)

10 (11%)

Induced

200

230

10 (100%)

30 (15%)

Student and visitor spending

700

890

0 (0%)

190 (27%)

Enterprise and innovation

270

2,170

60 (400%)

1,900 (704%)

Total economic contribution

100

2,030

200

4,260

100 (100%)

2,230 (110%)

Source: 2030 Strategy and baseline data from Falmouth University, and Hatch calculations Note: Figures are rounded

Note: UK figures include spending by all students, including off-campus students originally from the UK.

Appendix A

Approach to Impact Assessment

Appendix A: Core economic impacts: Direct effects

A.1

Direct impacts refer to the employment and wealth creation resulting from the University’s activities, in terms of Full Time Equivalent (FTE) employment and Gross Value Added (GVA):

•

Employment numbers have been sourced from a snapshot provided by the University’s HR department covering the 2018/19 academic year. This captures the number of direct employees by mode (Full Time/Part Time), residential location and salary. Employee headcount has been converted to FTEs using the information on their contracted hours. Gross Value Added (GVA) is the key measure of economic output at the level of a firm, sector or region. It can be measured in a number of ways and typically for a firm this is done using the income approach, as the sum of EBITDA and compensation of employees. These figures have been sourced from the University’s Annual Report and Accounts for 2018/19.

Core economic impacts: Indirect effects A.2

Indirect impacts refer to the employment and GVA supported by Falmouth University and FX Plus’ external expenditure (capital and revenue) on local suppliers. This expenditure creates employment and value added within the University’s immediate suppliers and all subsequent tiers of the supply chain as the University’s suppliers make purchases from their own suppliers.

A.3

Falmouth University and FX Plus hold a database of expenditure on external suppliers, containing information on each supplier’s location, the total level of spend and their sectoral classification.

A.4

We mapped Falmouth University and FX Plus’ sectoral classification onto the Standard Industrial Classification (SIC) contained in Hatch Urban Solutions’ Input-output model for the UK and the regions, and used the postcode information to determine the location of each supplier.

A.5

The full economic impacts of this expenditure were then estimated using our input-output model. The model is based on data from the UK National Accounts and allows us to estimate the supply chain multiplier effects from an initial injection of expenditure in a particular sector.

Core economic impacts: Induced effects A.6

Induced effects refer to the effects of spending by employees whose jobs are supported directly within the University and indirectly within its supply chain:

•

Impacts from expenditure by the University’s employees have been estimated using data on wages and salaries from Falmouth University and FX Plus’ HR data, adjusting for income tax (PAYE), National Insurance contributions, pension contributions and saving rates. Different rates of leakage of expenditure are assumed for the different impact areas. Our input-output model has been used to estimate the economic impacts from this spending. Impacts from expenditure by employees in the supply chain have been estimated using the Type 2 (indirect and induced) multipliers within our input-output model. 55

Student impacts: Expenditure A.7

Expenditure by the University’s students is an important source of its economic contribution. The National Student Income and Expenditure Survey, published by BIS, provides detailed data on the spending behaviour of students in UK universities, split by full time/part time students and the goods and services purchased (other breakdowns are also available). We have used the data from the latest survey (for 2014/15), along with Falmouth University and FX Plus data on the student population, to estimate the economic impacts of this expenditure. The approach is as follows: 1. Work out how many full time and part time distance and on-campus students live in each impact area, split by those who live in university-owned accommodation and those who live in other accommodation for the latter (using data from Falmouth University and FX Plus). 2. Analyse how many of these originally came from outside the impact area before moving to study there – this includes both domestic and international students. 3. Apply the average expenditure per student (split by full- and part-time on-campus and fulltime distance learners) to these breakdowns of the student population (excluding expenditure which represents a transfer to the University, such as tuition fees and rents, for those living in university accommodation). 4. Allocate this expenditure to sectoral categories in our input-output model, using a best fit analysis of the categories in the Student Income and Expenditure Survey. 5. Apply leakage rates for each of the impact areas, to each expenditure category. 6. Estimate the economic impacts from this expenditure using our input-output model.

A.8

We have estimated the total economic impact from this expenditure, as well as the portion which comes from students who were originally from outside the impact area.

Visitor Impacts A.9

The University generates visits to Falmouth in a number of ways. The challenge is to understand how many visits there are, how much these visitors spend in the local economy, what they spend their money on, and what the consequent economic impacts are.

A.10 Falmouth University and FX Plus hold some data on visits to various events it holds, but does not systematically collect data on the origin of visitors, their spending behaviour and so on. We have therefore not translated all of it into economic impacts. We have, however, estimated the economic value generated by visits from friends and relatives of students, by assuming that on-campus students originating from outside the impact area (domestic and international) each receive one visit and using evidence on the typical GVA and FTE contribution of visitors in the area.

compared with 5% across all UK universities

spent with UK-based

suppliers is spent in

of which

Cornwall

over on-campus student population

£225m tripled EU & UK investment

since 2001 Predicted economic•

impact by 2030

attracted to date

£200fflGVA 4,260 FTEs