An assessment of the economic impact of South Africa’s public universities

Abstract

With the understanding that universities play multiple social purposes, we aimed to provide an estimation of the economic impact of the public universities in South Africa. Using models described in the literature, we estimated economic benefits from four university activities – university exports, research at universities, the production of graduates and universities as business entities. Comparative analysis shows that, as an economic sector, Higher Education contributes more to South Africa’s gross value added than other economic sectors such as Wood and Wood Products, Textiles, Clothing and Leather Goods, or Paper and Paper Products. It is comparable to sectors such as Gold Mining, and Beverages and Tobacco. Taking into account a number of assumptions, which are explained in the text, for 2018 the total economic impact was estimated at about ZAR513 billion. Governmental expenditure on higher education in that year was ZAR66 billion. These figures produce a cost–benefit ratio for the sector of 1: 7.7, considering only these four university activities.