Institut für Öffentliche Dienstleistungen und Tourismus The role of universities for regional labour markets: the example of central Switzerland Simone Strauf Dr. Roland Scherer Szczecin, April 2007

Institut für Öffentliche Dienstleistungen und Tourismus Page 2 Central issues What are the key factors contributing to the positive economic development of a region? What role do universities play? Concept of the learning region What methods are there to measure the economic impact of universities on a region? Example of universities in central Switzerland: how can the universities contribute to improving both the regional labour market and the quality of the region as a business location: University as employer Educational function (training and further education) Knowledge transfer Brain drain – brain gain Added regional value Conclusion

Institut für Öffentliche Dienstleistungen und Tourismus Page 3 Current research status – Methodological approaches

Institut für Öffentliche Dienstleistungen und Tourismus Page 4 Porters diamond model for the competitiveness of regions

Institut für Öffentliche Dienstleistungen und Tourismus Page 5 Regional skills and expertise Expertise and skills Contributing factors Intensive problemsolving support Impetus for innovation ( push) Informationand knowledge transfer Consultants Research and educational institutions Customers High-quality demand Innovation cluster (pull) Specialisation of overall conditions Administrative expertise- Specific transport and communications- infrastructure Labour market Qualified labour force Knowledge transfer Informal information and knowledge transfer Informal discussions Conferences

Institut für Öffentliche Dienstleistungen und Tourismus Page 6 Methods of identifying regional economic effects

Institut für Öffentliche Dienstleistungen und Tourismus Page 7 Analysis methods to identify regional economic effects of infrastructure facilities Input-output analysis Cost-benefit analysis Mathematical finance Incidence analysis Network approach Method used: Combination of incidence analysis and network approach

Institut für Öffentliche Dienstleistungen und Tourismus Page 8 Regional economic effects of infrastructure facilities (e.g. universities) EffectsExamples Intangible Effects Competence effects Brain gain Knowledge transfer Educational function Network effects Horizontal and vertical networks of the universities Student networks Structural effects Infrastructure facilities Labour market effects Image effects Media reporting Location for living, working and learning Tangible Effects Direct economic effects brought about by the universities Analysis of the success of the universities Lucerne campus, Student Housing Association (StuWo) Direct economic effects brought about by students and participants Student expenditures Participant expenditures Induced total revenues Regional multiplier

Institut für Öffentliche Dienstleistungen und Tourismus Page 9 Case study: Central Switzerland

Institut für Öffentliche Dienstleistungen und Tourismus Page 10 Where is Switzerland located and what is typical? Switzerland

Institut für Öffentliche Dienstleistungen und Tourismus Page 11 Where is Central Switzerland located? Central Switzerland

Institut für Öffentliche Dienstleistungen und Tourismus Page 12 Universities in Switzerland Universities in Central Switzerland

Institut für Öffentliche Dienstleistungen und Tourismus Page 13 Numbers of students at the universities in central Switzerland Total: 6,200 students

Institut für Öffentliche Dienstleistungen und Tourismus Page 14 The effects of the universities on the regional labour market

Institut für Öffentliche Dienstleistungen und Tourismus Page 15 University as employer 1,000 people are employed by the three universities (full- time positions) The universities together are among the five largest employers in the canton of Lucerne (quantitative aspect) Most of employees have a tertiary educational degree. The percentage of highly-qualified residents has increased (qualitative aspect) Also students are visible on the regional labour market: about 75% of the students hold jobs while they are studying.

Institut für Öffentliche Dienstleistungen und Tourismus Page 16 Educational level of the population 1998 and 2004 Percentage of the population between 25 and 34 with a university degree

Institut für Öffentliche Dienstleistungen und Tourismus Page 17 Educational effects

Institut für Öffentliche Dienstleistungen und Tourismus Page 18 Proportion of diploma / bachelor degrees in 2005

Institut für Öffentliche Dienstleistungen und Tourismus Page 19 Knowledge transfer Networking with regional players Specialists from companies have part-time contracts as lecturers Companies make use of the universities for further education Universities have service contracts to address issues and problems stemming from the business sector Students create networks with companies Graduate organisations (alumni) Companies are active in university committees, university members are active in associations and public committees Knowledge Transfer Centres, Academy of Applied Sciences

Institut für Öffentliche Dienstleistungen und Tourismus Page 20 Knowledge transfer - student contacts to companies and institutions

Institut für Öffentliche Dienstleistungen und Tourismus Page 21 Brain gain – brain drain Location of students after graduation Do you want to stay in the canton of Lucerne after graduation? Where did you live before your degree program? In the canton of Lucerne In another canton NumberAs a %NumberAs a % Yes, I will stay in the canton of Lucerne No, I will go to another canton I don't know Total

Institut für Öffentliche Dienstleistungen und Tourismus Page 22 Net brain drain – brain gain Net brain-drain brain gain in proportion to the number of highly-qualified individuals percentage

Institut für Öffentliche Dienstleistungen und Tourismus Page 23 How to explain brain drain vs. brain gain?

Institut für Öffentliche Dienstleistungen und Tourismus Page 24 Employment rate of new graduates

Institut für Öffentliche Dienstleistungen und Tourismus Page 25 Employment rates of graduates after 1 and 5 years

Institut für Öffentliche Dienstleistungen und Tourismus Page 26 Gross annual income by region

Institut für Öffentliche Dienstleistungen und Tourismus Page 27 Regional added value

Institut für Öffentliche Dienstleistungen und Tourismus Page 28 Conclusions Highly qualified individuals are attracted (brain gain) and they play a role in preventing the brain drain. Knowledge transfer through university involvement (national and international, by students and employees) Strong networks between the universities as well as with companies, cultural institutions and other areas Structural effects: companies make good use of the supply of graduates in both quantitative and qualitative terms. Total additional revenues triggered in 2005 reached 72 million for the canton of Lucerne. The appeal of Central Switzerland as a business location is enhanced. The economic power increases and the universities contribute to boosting the buying power

Institut für Öffentliche Dienstleistungen und Tourismus Page 29 How can the effects of the universities on the regional labour market be increased? The effects of universities on the regional labour market can be very different depending on the structure of the region. Simply having jobs available is not the only criterion for attracting highly-qualified individuals to a region. Universities, companies and politicians share joint responsibility for creating the overall conditions to increase brain gain and prevent brain drain.