There’s an adage that suggests, “if you wish to construct a remarkable city, establish a university and wait 200 years.” The UK holds a prominent position as the second most favored destination worldwide for university students, with four of its universities ranking among the top ten globally. This status brings significant advantages to our cities, regions, and the nation as a whole. Recognizing universities as key players in driving regional economic development, especially in light of the government’s forthcoming industrial strategy, it is crucial to focus on what energizes these institutions.

Universities serve as vital hubs for the business networks that emerge around them. Their contributions in innovation, scientific exploration, and technological advancements—often achieved in collaboration with industry—position them as essential facilitators of industrial growth within their regions. Research conducted by London Economics, alongside Universities UK—which advocates for 141 institutions—indicates that for every £1 invested in UK universities, there is a remarkable £14 return in economic benefits. Furthermore, they approximate that research in higher education boosts the productivity of the private sector by £40 billion annually.

The ongoing shift towards devolution, granting enhanced powers to metro mayors and regional leaders, creates a timely opportunity for universities to become central figures in shaping regional policy, innovation, and growth strategies.

In this significant context, Lloyds Banking Group and PwC UK—both deeply integrated with the higher education landscape—have collaborated on a report aimed at exploring how universities can amplify their impact on regional revitalization and economic growth while also solidifying their financial stability.

The report outlines five essential principles.

• Firstly, universities should recognize that actively engaging in civic responsibilities within their regions is fundamental to their mission, rather than a secondary aspect of their teaching and research objectives. Leading higher education institutions globally often view these three domains as equally valuable and mutually beneficial. While many UK universities have both national and international aspirations, their regional engagement can serve as a strong foundation for these goals.

• Secondly, collaboration is vital. Universities should work alongside local higher and further education bodies, public entities, and businesses. The Manufacturing Technology Centre, established by universities in the Midlands—Birmingham, Nottingham, and Loughborough—is a prime example, collaborating with numerous others and supported by business partners investing heavily in future engineering capabilities.

• Thirdly, universities could streamline the engagement process with potential partners through a cohesive physical or digital “single front door,” staffed by specialists in collaboration and business development.

• Fourthly, embracing modern management and leadership practices can help universities inspire faculty towards increased agility, commercial understanding, and acceptable risk-taking.

• Finally, it is vital for universities to communicate more effectively the expenses and substantial value they generate—both economically and societally—while optimizing the use of their existing resources, intellectual property, and partnerships. Understanding and capitalizing on their expertise and assets is crucial for universities to magnify their impact and assure their long-term fiscal health.

Having significant engagement with about 70 percent of UK universities, Lloyds Banking Group is aware of the financial and strategic hurdles these institutions encounter and is dedicated to aiding in their resolution. Additionally, the Crown Estate has expressed intentions to potentially invest up to £1.5 billion nationally in science and innovation facilities over the next 15 years, focusing on collaborations with university hubs, starting with multi-stakeholder initiatives in Oxford and Cambridge.

It is imperative for all stakeholders to harness the transformative potential of universities within our communities and economies. The vitality and success of numerous current and future enterprises hinge on the strength of our higher education system, which we should collectively strive to support, enhance, and safeguard.

Sir Robin Budenberg is the chairman of Lloyds Banking Group and the Crown Estate.