Delivering Impact: A Comparison of Studies on the Economic Impact of Irish HEIs

What made the headline on the Irish Times education page this Wednesday was a report carried out by Viewforth Consulting on the economic, cultural and social impact of University College Dublin (UCD). Over the last few years, Viewforth Consulting has been a major partner working with Universities UK on the economic impact studies of UK universities. The Viewforth study on UCD is the second report the company has produced for Irish HEIs, with their pilot study on the social and economic impact of Dublin City University (DCU) published in 2014.

In this blogpost, I would like to compare the results from the Viewforth studies on the two institutions with the results from our Tionchar project.

Prior to any discussion of the results, it is crucial though, to acknowledge any differences between the methodologies adopted by the studies which would affect the final results on the economic impact.

In the Viewforth study on UCD, little has been said about the methodology adopted to undertake the analysis. Its DCU report, however, indicates that “the university’s impact on Ireland was modelled using a type II input-output model of Ireland”, with a footnote further explaining that “economic modelling of Irish impact was undertaken … using the national input output tables 2010 (CSO, 2014).”

Even so, there is a lack of details on the methodology in both reports which is well presented in the Viewforth studies on UK universities. It seems reasonable to assume that a similar, if not exactly the same, approach has been undertaken by the company to conduct analysis for universities in the UK and Ireland.

Therefore, both the Viewforth studies and our Tionchar project adopt a type II input-output model of Ireland and use the national input output tables 2010 which are the most recent ones for the country, making the comparison more straightforward.

Table 1 below shows some key indicators and results from the Viewforth and our own studies on DCU and UCD.

It should be stressed that the data shown in Table 1 does not include any impact from students, as in the Tionchar project we could not gather enough data from all Irish HEIs to calculate the economic impact of student expenditures. We, based on the studies on UK universities, assumed that student impact should be modest in comparison to the impact generated by the university and its employees. Nevertheless, according to the Viewforth study on UCD, its students generate an additional €448 million to the total economic impact of the university and its employees (€850 million), suggesting that students enrolled at UCD are a significant force of the university’s overall economic impact. The exclusion of student impact, although reducing the value of total economic output, should have no influence on the comparison between the two studies.

Table 1: Key indicators and results of the economic impact of DCU and UCD (excluding any student impact)

Tionchar

(2010/11)

Viewforth Consulting

(2012/13)

∆ 2010/11-2012/13
DCU
Income €175 million €148 million -€27 million
Expenditure €172 million €144 million -€28 million
Staff FTE 1209 1228 +19
Total output impact €719 million €278 million -€441 million
Output multiplier 4.18 1.88 -2.30
UCD
Income €411 million €421 million +€10 million
Expenditure €403 million n/a n/a
Staff FTE 2978 3340 +362
Total output impact €1702 €850 million -€852 million
Output multiplier 4.14 2.01 -2.13

In general, there are significant differences between the results from the two studies, with the Tionchar project reporting significantly higher results than the Viewforth studies. In the case of DCU, the Tionchar project found a output multiplier of 4.18, while the Viewforth reported that the output multiplier for DCU was just 1.88. A similar drop from 4.14 to 2.01 could be seen in the case of UCD.

One may wonder that if the difference was resulted by the fact that the two studies used institutional data in different years. Indeed, the Tionchar project used institutional data in the year of 2010/11, in order to make a direct linkage to the national input output tables 2010, while the Viewforth studies used more recent data for both DCU and UCD (2012/13).

This is a reasonable speculation, as Table 1 shows that the income of DCU decreased from €175 million to €148 million over the period, which could have a negative impact on its output impact. However, the income of UCD in fact increased from €411 million in 2010/11 to €421 million in 2012/13, making it more difficult to suggest what might be the underlying factor for the decrease of the output impact.

That said, both studies have confirmed that Irish HEIs, DCU and UCD more specifically, are significant driving forces of regional and national economy. Furthermore, as the Viewforth studies have shown, both institutions have substantially broader social and cultural impacts as well as the financial contribution they make to the economy.

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Irish HEIs and Region Series Report: Athlone IoT and the Midlands Region

Introduction to the ‘Irish HEIs and Region Series Report’

As part of the Tionchar project, we have produced two reports on the economic impact of Irish higher education institutions (HEIs). The two reports used different research approaches: one with the Keynesian macro-level approach and the other with the input-output (IO) micro-level approach. For the purpose of dissemination, we focused on the economic impact of HEIs at the national level, with less attention paid to their impact at the regional level. Nevertheless, we recognise that it is essential to examine the role of HEIs in both regional and national economies. The ‘Irish HEIs and Region Series Report’ is intended to contribute to our understanding of the importance of HEIs to the region where they are situated. Each of the blogs will look at the case of an individual institution and the region where it is situated. As a whole, it is hoped that these reports could provide an overview of the Irish HEIs and their region.

Athlone IoT and the Midlands Region

Situate in the heart of Ireland, the Midlands region consists four counties, namely Laois, Longford, Offaly and Westmeath, and according to the 2011 census has a population of 282,410. In Figure 1 below, we show the population growth in the four counties of the region and in the whole region as well as in the country between 2002 and 2011. It is apparent that all the counties in the Midlands Region saw their population growing faster than the national average.

Figure 1: Population by census year (2002=100)

image (19)

Source: CSO.

Despite the high growth rate of population over the last decade, the region has been struggling from an economic perspective. Figure 2 below illustrates the index of disposable income per person in the four counties between 2002 and 2012, while the state level is set at 100. Over the period, the gap between the Midlands region and the state has become wider, with the index of the region falling from 95 in 2002 to just below 90 in 2012.

Figure 2: Index of disposable income per person (State=100)

image (20)

Source: CSO.

As shown in Figure 3, the Midlands region lags behind the state in the share of employment in services. In the fourth quarter of 2014, less than 68% of employment in the Midlands Region was in services while that number was above 75% in Ireland. As suggested by many studies, the growth of the service sector could help make development more sustainable and more competitive in the knowledge-based economy. Therefore, the Midlands Region seems to face more difficulties than the rest of the country in building a modern economy.

Figure 3: Persons aged 15 years and over in employment (%)

image (21)

Source: CSO.

There is no city in the Midland region, and the largest town is Athlone in County Westmeath with a population of 20,153 according to the 2011 census (Figure 4). Portlaoise in County Laois and Mullingar in County Westmeath are the second and third largest towns in the region. With a population of 3,001, Clare in County Offaly is the tenth largest towns in the Midlands region.

Figure 4: Ten largest settlements in the Midlands region by population (2011)

image (22)

Source: CSO.

As the only third level institution in the region, Athlone Institute of Technology (IoT) is located in Athlone – the largest town in the Midlands. In 2010-11, a total of 4,439 undergraduates and 446 postgraduates were enrolled at the Athlone IoT, which employed a total of 509 staff. According to its financial data of 2009-10, the Athlone IoT received €47.4 million and spent €43.9 million.

In 2010-11, the Athlone IoT had the effect of generating a gross local output nationally of €81.30 million, with a concomitant generation of local disposable income nationally of €65.65 million (Table 1).

Using the Keynesian macro-level approach, our analysis also showed that, the Athlone IoT had the effect of generating a gross local output regionally of €64.75 million, with a concomitant generation of local disposable income regionally of €52.84 million.

Overall, the gross local output multiplier at the regional level on an output basis was estimated as 1.83. Every €1 of initial increase (decrease) in the expenditure base of the Athlone IoT would result in a rise (fall) of €1.83 in gross local output in the Midlands region.

For income, the local disposable income multiplier at the regional level on an output basis was estimated 1.76. Every €1 of initial increase (decrease) in the value of disposable income from the Athlone IoT would lead to a rise (fall) of €1.76 in local disposable income.

Table 1: Effects of the operation of Athlone on the Midlands region and Ireland (€000s)

Midlands region Ireland
Expenditure base 43,598 43,598
First round GLO (Y1) 35,365 42,405
First round LDI (D1) 30,096 35,545
Second round GLO (Y2) 24,239 30,495
Second round LDI (D2) 18,761 23,603
Final GLO (Yf) 64,751 81,299
Final LDI (Df) 52,841 65,648
GLO multiplier (Yf/Y1) 1.83 1.92
LDI multiplier (Df/D1) 1.76 1.85
Expenditure base multiplier (GLO) (Yf/E) 1.49 1.86
Expenditure base multiplier (LDI) (Df/E) 1.21 1.51

Source: Zhang et al. (2015).

Innovative Culture in Ireland’s Higher Education Institutions: An Assessment

In this blog, I provide a summary of the working paper we have done on assessing the innovativeness of organisational culture in Ireland’s higher education institutions (HEIs). The full paper is available at SSRN: http://ssrn.com/abstract=2604196

The roles universities play in socio-economic development have been notably redefined during the last few decades as a response to the environment. Universities are no longer only isolated islands of knowledge, as they used to be, but become closely engaged in a wide range of activities with their external partners.

Whilst there is a large body of literature examining the innovation linkages between universities and firms from an external perspective, much less attention has been paid to the internal factors within universities which drive those linkages. This paper seeks to assess the innovativeness of organisational culture in Ireland’s HEIs.

Studies have attempted to describe what is called an innovative culture or an innovation-supportive culture. For Jassawalla and Sashittal (2002), an innovation-supportive culture is a firm’s ‘social and cognitive environment, the shared view of reality, and the collective belief and value systems reflected in a consistent pattern of behaviour among participants’. Sarros et al. (2008) view an innovative culture is a culture where all its members are engaged in creating new products, services or processes. More specifically, the organisational culture may be labelled as an innovative culture if it ‘elicits people’s innovation capacity, tolerates risk, and supports personal growth and development’ (Menzel et al. 2007).

This paper employs the ‘Six Building Blocks of an Innovative Culture’ introduced by Rao and Weintraub (2013), which argues that an innovative culture rests on a foundation of six blocks: resources, processes, values, behaviour, climate and success.

Each of the six building blocks is composed of three factors (18 in all), and each of those factors incorporates three underlying elements (54 in all). In this way, the innovative culture, in the view of Rao and Weintraub (2013), becomes more measurable and manageable. To analyse the results for an organisation, one calculates an average for each question (element), an average for each factor (average of the three questions related to each factor) and finally the average for each building block (the average for the three factors related to the building block). Rao and Weintraub (2013) termed the final average of the six building blocks – the company’s overall score – as the ‘Innovation Quotient’.

In Table 1, we show the ‘Innovation Quotient’ – the overall average innovation score of the organisation – for each of the 19 Irish HEIs, which measures the general perception of the innovativeness of their organisational culture by all staff.

Table 1: Innovation quotients of Irish HEIs

Institution Innovation quotient
DCU 3.03
Waterford IoT 2.89
UL 2.71
Cork IoT 2.68
Universities 2.66
IoT Tralee 2.65
UCD 2.62
UCC 2.59
TCD 2.59
MU 2.58
All HEIs 2.55
IoT Carlow 2.53
NUIG 2.52
Athlone IoT 2.45
Dundalk IoT 2.43
IoTs 2.42
Letterkenny IoT 2.37
IoT Sligo 2.35
IoT Tallaght, Dublin 2.3
Limerick IoT 2.23
Galway-Mayo IoT 2.06
Dublin IoT 2.04

The ranking is led by Dublin City University (3.03) and Waterford Institute of Technology (2.89), while Galway-Mayo Institute of Technology (2.06) and Dublin Institute of Technology (2.04) falling at the bottom of the table.

At the sectoral level, organisational cultures in universities were perceived to be more innovative than those in IoTs. In particular, the innovation quotient of universities was 2.66, closely followed by that of all HEIs as a whole (2.55), while IoTs had the lowest score of 2.42. This finding may contrast to the conventional view that IoTs, which were originally established to provide the requisite array of skills demanded by industries, are closer to business and the community. It is the university sector that seems to be better equipped with innovative culture. More strikingly, while six out of seven universities showed higher scores than the national average, only three out of 12 IoTs were perceived to be above the national average.

Table 2 compares the innovation scores of the two sectors in more details. In both sectors, academic staff considered their culture to be less innovative than support staff.

Table 2: Innovation quotients of universities and IoTs by position and faculty

All staff Position Faculty
Academic staff Support staff STEM AHSS Other
Universities 2.66 2.63 2.72 2.64 2.64 2.78
IoTs 2.42 2.30 2.62 2.29 2.41 2.67
All HEIs 2.55 2.50 2.64 2.52 2.55 2.63

Although further investigation is needed to understand why this is the case, one could argue that HEIs should strength the areas where their academics perceive to be less supportive. Presumably, when one academic does not consider the overall institutional environment could well nurture her/his innovative ideas, she/he would be less likely to engage with external stakeholders.

Both academic staff and support staff in the university sector scored higher than their counterparts in the IoTs, though the gap between academic staff was wider than that between support staff. Support staff in the IoT sector seemed to have a similar score to academic staff in the university sector. An implication from these results is that academics working at IoTs tended to have the lowest level of recognition of the innovativeness of their organisational culture.

Table 2 also compares the innovation scores of academics in STEM and AHSS subjects. An interesting fact is that AHSS faculty and staff were more likely to perceive their organisational culture to be innovative than STEM staff, supporting the argument that the importance of AHSS subjects has been largely overlooked.

Table 3 breaks down the overall innovation quotient of each HEI into six components, and compares the score of each component between the university sector and IoT sector.

Table 3: Innovation quotients of universities and IoTs by block

Block Universities IoTs All HEIs
Values 2.94 2.57 2.75
Behaviours 2.55 2.23 2.39
Climate 2.61 2.46 2.53
Resources 2.68 2.46 2.57
Processes 2.47 2.26 2.37
Success 2.73 2.50 2.62

As Table 3 shows, universities scored higher than IoTs in all of the six blocks, indicating all-round advantages of the sector.

For the university sector, values were put the highest score of 2.94 by its staff, followed by success (2.73) and resources (2.68). University staff tended to have a general acknowledgement of the value of its organisational culture, and believed that their organisations have invested a significant amount of resources into the development of innovative activities. By comparison, universities were less innovative in processes, which had a score of 2.47. It seems to suggest that, there is plenty of room for improvement in universities in handling innovative ideas from their staff.

The IoT sector had relatively high score in the blocks of value (2.57) and success (2.50), while behaviours were ranked lowest with a score of 2.23. The main difference between the two sectors lies in the fact that it was less likely for an IoT staff than a university staff to actually put an innovation plan into action. At this stage, it is hard to tell what the explanations are, although one may speculate that it is likely to be resulted by a combination of several factors.

Overall, in this paper, we use an assessment tool to examine how innovative university and IoT staff in Ireland perceive their own organisational cultures to be. The main contribution of the study is that it undertakes the analysis from an internal perspective, different from many previous studies which look at similar issues mainly from an external perspective.