The Single Market of the Mind

For many of those who voted to Remain, as well as those from other EU countries who were not eligible to vote, the referendum result was a moment of emotional rupture. It was a blow to their sense of themselves as, simultaneously, citizens of their home country and of a wider continental entity. For others there was the prospect of a professional rupture, a direct impact on their working lives.

In higher education and cultural spheres, in particular, collaboration across the boundaries of the EU has for long been an accepted part of working life, and an essential part too. For institutions there is the prospect of a rupture in funding sources and in the volume of funding, a rupture whose onset will become more visible over the next few years. Nowhere will this be felt more than in the university sector.  

The UK is without question a world leader in higher education and in the arts and creative industries. That has been achieved in large part because we have been an intellectually open country with a high level of international engagement with peers in other EU countries. Sustaining this level of European engagement remains a vital national interest that has to be addressed constructively in any negotiation of our future relationship with the EU. Whether we are in or out of the EU, the free exchange of ideas and talent will remain wholly necessary in both these spheres.

There are many reports that chart the connections between the UK and the rest of the EU, but few that do so on the Welsh level. It is to fill that gap that the IWA has attempted to draw together as much data as possible on these two areas,  education and culture, that impact directly on the competitiveness and profile of Wales in the world. The picture revealed underlines just how much Wales has at stake.

It is true that the world of the intellect knows no boundaries. Ideas cross boundaries with a speed our forebears could not have imagined. Educational, scientific and artistic collaborations already go well beyond the boundaries of the EU, and even if the UK withdraws from the EU, many working linkages will almost certainly survive. But in the last 50 years the EU has built a habit and depth of collaboration, and an intricacy of connections – intellectual, practical, financial, personal and professional. It is no longer a simple transactional arrangement, rather an evolving natural single market of the mind.

Any withdrawal from that single market of the mind poses a threat, but particularly to the UK’s research base where our national investment in research and development is already significantly lower than that of many competitor countries, and yet more reliant on EU funding.

The UK is 20th in the world league table of R&D spend as a percentage of GDP. That spend has dropped from 2.4 per cent of GDP in 1981 to 1.63 per cent today, considerably less than Germany’s 2.85 per cent. And yet, the UK is the second highest recipient of EU funding over the decade 2006-15 – just behind Germany – and undoubtedly a net beneficiary. The ONS has calculated that in the period 2007-13 the UK contributed €5.4bn to the EU research funding pot but received €8.8bn back – a 63% return.

If the prospect of losing access to this pot is a concern at the UK level, it is doubly so for us in Wales. Across the UK EU funding represents roughly a third of the competitive funding distributed by the UK’s Research Councils and Innovate UK. For Wales that EU funding represents nearly two thirds. We are also disproportionately dependent on higher education for R&D, and therefore even more vulnerable. Across the UK the private sector is responsible for 45% of the €226.3 billion spent on research and development. In Wales the private sector accounts for only 10%.

This low private sector input may have less to do with the willingness of business to invest than with the structure of Welsh industry with its tiny proportion of large businesses, the dominance of small and medium sized industries, and the profusion of branch plants where R&D may be done elsewhere in the UK or abroad. But this much greater dependence on the higher education sector means that, in short, Wales has more to lose, and just at the wrong moment.

In recent years the research record of Welsh universities has been on an upward trajectory, in both volume and quality. In quality terms the proportion of research at Welsh universities classified as 4* ‘world leading’ rose from 14% in 2008 to 30% in 2014. Volume is a bigger problem. At present we just don’t have sufficient people working in high value research, particularly in science, technology, engineering, mathematics, and medicine. We are several hundred researchers short, although steps have been taken through the Welsh Government’s £56m Ser Cymru II fund to plug that gap, with no less than 51% of the money – £29m – coming from the EU.

Any improvement has to be sustained over many years to come before we can be content that we have established a truly competitive quantum of R&D that can help close the gap with the rest of the UK in terms of Wales’s economic performance.  If the Welsh research effort is allowed to stall we will pay a high price.

No less than €117m of research funding came into the HE sector in Wales from the EU during 2007-13, without counting the contributions from the ERDF that in recent years have amounted to £174m. and which have funded major capital developments in almost every institution. Higher education has not been the only beneficiary. In further education the European Social Fund contributed to £93m to 14 projects during 2007-13.

The issue is wider than funding alone, important though that is. It is also a matter of preserving unconstrained access to expertise and deep participation – by right as well as by inclination – in increasingly numerous formal European academic networks, often with connections to research and development by European companies.

By now 16% of academic staff in the UK are from other EU countries. At Swansea University, to take one example, there are 127 academic staff from other EU countries, 27 of whom are at professorial level. At the same time, between 2007-13 4,500 students and 733 staff from Welsh universities studied in other countries under the ERASMUS scheme that hopes to see 20 per cent of students spending some time abroad by 2020.

International collaboration is the name of the game in research. It has been estimated that in 1981 90% of UK research output was entirely domestic, whereas by now that domestic portion is down to one half, with almost all the growth in research over the last three decades attributable to international collaboration. The EU has been at the forefront of that, with the research budget increasing from a mere €3.3 billion in 1984-7 to €80 billion for 2014-20.

The value, quality and intricacy of the research connections thus created will not be easily or satisfactorily sustained undamaged without continuing formal commitments by both the UK and the EU. Were the Welsh Government permitted ‘red lines’ in the negotiations, this would undoubtedly be one of them.

Similarly, in the cultural sphere, where Wales is internationally deeply engaged in many fields, quality has been enhanced by the absence of any unnecessary barriers to the free flow of ideas and talent – a more important factor even than funding.

Whether it is Welsh National Opera co-producing with 11 other EU countries; or companies such as our National Dance Company or NoFit State Circus benefiting hugely from European talent, and touring regularly to EU-funded festivals; or Aberystwyth’s Mercator Institute leading an EU-wide Literature across frontiers project; or our National Museum working with museum professionals from 23 EU states – our culture has been hugely enriched by that sense of a borderless community of art. That is why the cultural sector fears the return of clumsy and costly restrictions that it had thought were things of the past.

Whether in the field of university research, student and staff mobility, or in the artistic sphere, we will have to cope with three challenges: the threat to funding and to free movement, and the choice either of negotiating continued access to the architecture of collaboration that the EU has built – the European Research Area, ERASMUS+ and Creative Europe – or of constructing new organisational structures of our own to develop and manage bilateral/multilateral arrangements that can have the same effect.

There are a number of lessons to be drawn from any study of this intense weave of European connection. First, these issues have to be a key part of any negotiation. Second, that a hard Brexit could do untold damage to the educational and cultural fabric of Wales that would harm our economic competitiveness. Third, whatever the outcome, it is imperative that Wales creates a fuller more effective international strategy in which education, culture and the creative industries are essential components. Fourth, that “global” is not an alternative to “European”, rather an extension of it.