As more and more universities struggle under financial strain and grapple with questions of their future, a new study reveals the important economic role universities play in the success of cities.

Universities are often a city’s top skilled employer, leading international exporter, and serve as catalysts for regeneration and innovation.

This is based on research from the Centre for Cities, which tracks the success and growth of UK cities, and warns of what national reforms to universities could mean for the future of UK cities.

Universities account for a quarter of all ‘knowledge’ jobs in Stoke, Plymouth, and Hull, attracting skilled workers to the local labour market.

In places like York and Exeter, universities are also major employers, but planning restrictions could potentially limit workforce growth especially in the private-sector.

This dichotomy of the role of universities in cities reflects their central role in smaller cities – the classic trope of the ‘university town’ – and how this can provide a continuous influx of young people to boost the local economy, as well as a stable centre for jobs.

The research also found that universities are among the biggest international exporters in many UK cities. In Exeter, Dundee, and Leicester, universities are the single largest export sector, largely driven by international students.

In half of UK cities, universities are in the top ten export sectors, particularly in the greater south east. Universities outrank legal services in Cardiff and metal manufacturing in Sheffield in terms of exports.

International students are often an economic backbone for universities, with their higher fee cost, as well as Home Office prices for student visas. A higher international student level could crush many UK city’s international export growth, the research says.

Universities are also found to be transformative for city regeneration, in both infrastructure and demographics. Nottingham, Liverpool, and Coventry has seen their population grow larger and younger in the past two decades thanks to universities. Coventry saw students drive a three-quarters increase in city centre accommodation in the same time frame.

Expansion of student housing has spurred on wider private investment, but this also comes at a price – retaining graduates requires a broader investment in the local economy, rather than just student accommodation.

This ties into the spin-out culture of universities – universities outside major hubs like London often serve as nurseries for innovation, rather than gardens. Most university spin outs relocate, as 40% of London’s spin-outs actually began in other cities.

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While universities only account for about 2% of city innovation, policy should focus on retaining innovative spin-outs to support the local economy.

The research culminates in saying that any national changes in university policy will not be felt evenly across the UK. While some universities may be small compared to others, their role in local economies may be paramount to cities.

Policy changes have already made the future of universities uncertain in the UK: domestic undergraduate fees have been frozen for a decade, as student numbers drop due to demographic shifts and rising cost of living.

While universities turn to international students for revenue, this could shift as the UK’s anti-immigration rhetoric and policy – restricting students dependents, proposed cuts to graduate visa times, and a levy on international fees – puts this at risk.

The research paper highlights that almost half of universities could face a deficit this year, as the academic sector is faces the same economic woes as the rest of the world.

Scottish universities are no exception to the tirade of disarray facing UK academic institutions. The University of Dundee was the first to publicly face struggles, facing a £30m deficit before the UK government stepped in with a taskforce to save the institution from financial ruin.

The University of Edinburgh is currently going through a range of cost-cutting measures, waving goodbye to staff as it attempts to stave off financial hardship.

The University of Aberdeen is also facing a £1.12m budget gap as it pauses recruitment and revisits voluntary redundancies to stay afloat.