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The UK economy is doing a little better than expected this autumn with public sector borrowing down and tax receipts increasing. Nevertheless many households find their prospects bleak: welfare and local services are being cut, wage growth is weak and young people's job hopes are bearing the brunt.
It is against this backdrop that the UK higher education sector's response to a new round of EU funding for research and innovation and opportunities for young people takes on particular urgency. From 18 November, the European Parliament will vote on funding worth €84.9bn (£70.8bn) for research and innovation, and student scholarships and vocational skills.
This comprises funding of €70.2bn (£58.5bn) for the Horizon 2020 programme for research and innovation and €14.7bn (£12.3bn) for the Erasmus+ programme for students to study and train abroad – effectively an investment not only in higher education, innovation, and young people in the European area, but also in sustaining the competitiveness of Europe in the global era.
Let's not forget that the long-term impact of the most recent round of EU funding for research and innovation is estimated at nearly 900,000 additional jobs and a GDP growth of nearly 1%, which Europe can surely not do without. The Horizon 2020 Impact Assessment report, meanwhile, calculates that across all member states, every euro of funding for the programme leads to an increase in industry – added value of €13.
Just as important is the experience of the students themselves. Since 2007, approximately 400,000 people a year across Europe have studied or trained abroad, benefitting from the EU's collected student, teacher and vocational skills programmes. The soft skills, particularly intercultural awareness and adaptability, acquired during such periods overseas make these students far more employable by global business.
Within Europe the UK higher education sector is a leading player. OECD data finds the UK higher education sector's record of working on research and innovation with small and medium-sized enterprises is particularly good; and it certainly has not been slow to avail itself of EU research and innovation funding under previous programmes. While the UK overall comes second to Germany in the current European programme for research and innovation, the UK higher education sector comes top. In proportionate terms, the benefits are crucial for research funding.
For UK higher education institutions, EU funding provides an additional 15% on top of the UK government's own research budget, a sum greater than that of all but two of the UK Research Councils. Funds for research projects requested by UK higher education institutions from the European Commission rose from €508.6m (£424.1m) in 2008 to €856.3m (£714.1m) in 2012. In contrast the UK domestic science budget, reconfirmed in the UK 2013 spending review, is frozen in cash terms.
Under Erasmus, the EU's flagship student mobility scheme, the number of UK students studying or working in Europe in 2012/13 rose by 7% to 14,607, the highest number in the 25 years since the programme was launched in 1987, and an important antidote to young people's stricken prospects. The figures show that the number of UK students on the Erasmus programme has more than doubled since 2006/07.
The challenge now is for the UK higher education sector to maintain its European outputs and look for opportunities to improve. While the UK is highly successful in attracting European funding for research and working collaboratively with small to medium businesses, there is scope to establish more partnerships with the latter and, as recent British Council research suggests, to link research and innovation projects to increasing global investment into the UK.
Already, European countries such as Germany, France and Italy are pre-eminent in collaborating with the UK but there is more our higher education sector can do to remove barriers to partnerships with higher education institutions in Europe in the future, as an International Unit conference with our partners DAAD (German Academic Exchange Service) and Institut Francais will investigate later this month.
While under British Council management, Erasmus+ has seen a leap in participation by the UK's young people, the UK overall is only sixth in terms of total students participating, lagging far behind France, Germany and Spain, who have almost three times as many young people gaining vital skills needed for the global market.
The Horizon 2020 and Erasmus+ funding presents the UK with some unmissable opportunities for economic development. But funding is just one side of the equation; creative and commercial acumen and partnership, on the part of UK's higher education sector are just as important.
Of course, the UK higher education system already punches well above its weight. Internationally, the sector is runner up only to the US in terms of the number of international students it attracts to its colleges, and it is the second largest producer of international collaborative research in the world, but we cannot take this position for granted.
Peter Scott, professor of education studies at the Institute of Education, University of London, recently stated that EU withdrawal "would tend to confirm the 'mid-Atlantic' status of UK higher education, as a system in ideological thrall to US higher education models". I would argue that while Europe is crucial to the fortunes of our higher education sector it is not enough for the UK to remain in Europe. The challenge is for UK higher education to keep improving its ways of working in Europe and to translate that into investment that makes a visible difference to austerity Britain.
The International Unit's conference European University Co-operation in the Era of Globalisation takes place in London on 19 November
Joanna Newman is director of the UK Higher Education International Unit – follow it on Twitter @InternationalUT
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