International students add 2.3 billion to UK economy

09 June 2015 Consultancy.uk

International students contribute a total of £2.8 billion to the economy in London, while costing the city only £540 million in public spending, resulting in an added value of £2.3 billion, research by PwC shows. In addition, almost 70,000 jobs in London are supported by the activities of international students at the higher education institutions, further highlighting the benefit of international students to the city.

With immigration an increasingly burning issue and international students included in the net migration target statistics, the issue of the economic value of these students to the UK economy has been the target of debate. In a recently released report, titled ‘London Calling: International students’ contribution to Britain’s economic growth’, PwC and London First explore the added value of international students to the UK economy by comparing the students’ spending with their costs to public spending. The research includes a survey of more than 1300 (ex) students of London-based universities.

Reasons for studying in the UK

For many students studying in the UK is a popular choice, with the majority of students choosing London as their place of study for the ‘quality of education’, the ‘English speaking education’ and the ‘reputation of London’s universities’. Eight out of ten would recommend studying in the UK, with 14% of students saying that such a recommendation was one of the reasons to study in the UK.

Value added arising from spending

PwC’s research shows that the added value which comes from international students’ spending money in the UK totals to £2.8 billion. This amount can be brought down to spending of their own, tuition fees and subsistence costs, and spending from friends and relatives visiting students. In addition to adding value via spending, the students also add value to the UK economy in the form of 70,000 jobs that are supported by the activities of international students and their money spent. 

Jobs supported

Although some might say that international students are a burden to the UK as they might put too much pressure on the country’s public services, such as the NHS, PwC states that this is not true. In 2013/2014, the international students only consumed 540 million in public spending. When comparing this to their contribution of £2.8 billion in the same year, the country’s net economic benefit has been £2.3 billion.

Net short term economic benefit

Commenting on the results, Jo Valentine, Chief Executive of London First, says: “International students are made to feel unwelcome because of anti-immigration rhetoric – and the fact that they are currently included in the government’s net migration target. But students’ expenditure here is a modern-day export: they pay substantial fees and contribute significantly in consumer spending.”

Julia Onslow-Cole, Head of Global Immigration at PwC, adds: “While politicians recognise the importance of international students, there has been considerable debate over the economic value.  This is the first study to quantify the benefits of student migration.  We need more hard data like this to inform immigration policies and targets. The £2.3 billion benefit of international students illustrates there is a huge amount at stake.”

Profile

×

Project management industry adds £156 billion of value to UK economy

15 April 2019 Consultancy.uk

Project management has grown into one of UK’s largest areas of business over the past decade, amid the increasing ‘projectification’ of work. With the gross value added to the UK economy by project management estimated to be £156 billion, this trend is likely to continue in the coming era.

Despite the huge success of project management in recent years, until now there has been relatively little data available on the size of project activity. As a result, there has been a great deal of debate on things like the number of people involved in the sector, the number of projects, and how it contributes to economic output. Due to this need for clarity, APM, the UK’s professional body for project management (the largest organisation of its kind in Europe, with 28,000 individual members) commissioned economists from PwC to shed light on the industry's economic impact.

The research concluded that the profession makes a more significant contribution to the UK economy than the financial services sector. 2.13 million full-time equivalent workers (FTEs) were employed in the UK project management sector, generating £156.5 billion of annual gross value added (GVA). In comparison, the financial services sector contributes £115 billion, and the construction industry adds £113 billion.

Gross value added to UK economy

Commenting on the discovery, Debbie Dore, Chief Executive of APM said, “Project management runs as a ‘golden thread’ through businesses, helping to develop new services, driving strategic change and sector-wide reform.”

Who is a ‘project manager’?

To reach these estimates, PwC’s researchers used detailed models to map out the value of project management activity. They ultimately defined relevant ‘projects’ as “temporary, non-routine endeavours or rolling programmes of change designed to produce a distinct product, service or end result… [with] a defined beginning and end, a specific scope, a ring-fenced budget, [and] an identified and potentially dedicated team with a project manager in charge.”

Building on this, they then went on to define what the act of project management actually is. The job consists of applying “processes, methods, knowledge, skills and experience” so that clients can meet their objectives and bring about planned outputs or outcomes. The analysts added that this includes “initiating the project, planning, executing, controlling, quality assuring and closing the work of an identified and dedicated team according to a specified budget and timeframe.”

Importantly, it should be noted that the profession is not exclusive to only roles explicitly labelled as ‘project manager’, but to any role where specialist project management skills are used. This means that across sectors these roles can have very different titles, from the self-explanatory contract managers of procurement, or the campaign managers of advertising, to the likes of festival co-ordinators in the events sector, and many more. The roles in question also span all strategic levels of the profession, from strategic to tactical and operational positions.

Gross value added of project management profession

From a sector perspective, the financial and professional services, construction and healthcare industries make up almost two-thirds of the total project management GVA. At the same time, understandably, the UK Government has a huge project portfolio, which further drives the size of the GVA the sector contributes, thanks to megaprojects like HS2 and Crossrail.

Commenting on this to the report’s authors, Oliver Dowden, Minister for Implementation remarked, “Project delivery is at the heart of all Government activity, whether it’s building roads and rail, strengthening our armed forces, modernising IT or transforming the way government provides public services to citizens. Getting these projects right is essential if we are to ensure that we build a country that works for everyone.”

Throughout 2019, 26 major government projects were delivered, representing a fifth of the overall Government Major Projects Portfolio (GMPP) of 133 projects. According to the IPA annual report 2017-18, these represented a whole life cost of £423 billion. In addition to this were a plethora of smaller scale projects, and those in early development.

Elsewhere, with the increasing digitalisation of the economy impacting entities of all shapes and sizes, IT and digital transformations tended to dominate the projects of the UK scene alongside new product development projects, with a respective 55% and 46% of organisations in the research sample having undertaken these types of project in the past year. At the same time, this varied across sectors, and unsurprisingly, in the construction and local government sectors, fixed capital projects were the main project type undertaken.

Outlook

Looking to the future, 40% of business leaders expect project management will grow in the coming years due to the increased use of projects – or the ‘projectification’ of the UK. In a trend that has been witnessed elsewhere, organisations have to rapidly and continuously change in the digital age of business, driving the need for project management.

Outlook for project management services

An increased focus on value over cost – especially in the construction sector – and a forecast increase in the number of international projects are predicted to be key drivers of growth, according to the expert contributors. However, this will not happen in the absence of challenges; more than half of organisations expressed concern over the perceived impact of political uncertainty in the UK. Skills and capability shortages were also cited as a potential barrier by a third of organisations.

With regard to budgets, meanwhile, a third of those surveyed by PwC said they expect the size of project budgets will increase in the coming three years, while 40% anticipate a growth in project size. As the profession continues to mature, and as the recognition of the importance of good project management grows, it is expected that a greater proportion of project work will gain more distinct attribution to the profession itself, giving more recognition and appreciation to the role of the project manager.

Speaking on the findings of the study, Sandie Grimshaw, a Partner at PwC, concluded, “The project management profession is relatively new compared to some other professions, such as lawyers, teachers and doctors. However, as project management is a core competence vital to organisations in the UK, the profession is critical and will continue to grow in stature.”