06Conclusions and Policy Recommendations

The future economic success of the UK is increasingly dependent on the ability of its cities to both attract and retain talent. And this is a big challenge for many of our cities. While the UK’s great universities are spread around the country, many new graduates head straight for the bright lights of the capital.

London employs 22 per cent of all working new graduates who move after university, and 38 per cent of those working new graduates who have a first or upper second class degree from a Russell Group university.

But it is not that cities outside London do not retain graduates – it is that they do not retain the majority of those students who move to their city to study. In Manchester, for example, 67 per cent of the students who went to study in the city left upon graduation. In Birmingham this figure was 76 per cent. In Southampton it was 86 per cent. And it is these people that drive the migration flows to the capital.

Despite the pull of London, most cities still experience a brain gain. This is because they attract more graduates to their city than the number of graduates who grew up in their city but leave to work elsewhere. It is also because their universities, to a varying degree, play an important role in ‘growing their own’ – educating students who grew up in the city and who stay after graduation to work.

The patterns of graduate migration appear to be primarily driven by job opportunities. But this is not just about the jobs or level of wages available today. There is no relationship between moving graduates and wages, which suggests that future career opportunities play an important role in influencing where graduates move to and why.

Policy recommendations

If a city wants to attract and retain a greater number of graduates, then it needs to focus on wider economic growth and job creation policies that support the creation of more jobs, and particularly high-skilled knowledge jobs, rather than focus on policies that are specifically targeted at graduate attraction and retention. In particular this means cities need to:

Focus on educational attainment to improve skills throughout the workforce

Cities and their partners – including universities and businesses – should concentrate on increasing the supply and quality of home-grown talent. Efforts to increase educational attainment of residents and improve workforce development should take priority. Improving schools will also help make cities more attractive for skilled workers with young families.

Focus on the economic fundamentals

Cities need to ensure that the factors that underpin successful city economies are in place and working well. This involves:

• a transport system that allows for efficient movement of goods and people around and into and out of the place;
• a housing market that enables people (existing and new) to find somewhere to live that meets their expectations; and
• a planning system that is adaptable and responsive to changing employment and residential trends and preferences.

Focus on helping to boost demand for high-skilled workers among businesses

Cities and partners should coordinate efforts to boost demand for high-skilled workers by concentrating on innovation, inward investment and enterprise policies. Importantly, cities should ensure that any resources are being deployed to maximum effect, and regularly reviewed and evaluated to identify options for improvement.

Recognise that universities are important but not crucial

Those cities that have quality higher education institutions should look to make the most of them. Cities need to work with their universities and businesses to increase the demand for graduates, as well as helping graduates find existing graduate jobs. And those cities that do not have universities need to think carefully about the costs and benefits of trying to acquire one.