While tax cuts understandably dominated the weekend’s headlines, there was much more in Kwasi Kwarteng’s Growth Plan that will be crucial if the Government is going to hits its ambitious 2.5% trend growth target.
Immigration policy is one such area, with the Government rightfully stating that ‘migration, in particular skilled and high-skilled migration, plays an important role in economic growth, productivity, and innovation’. And it seems these are more than just the usual warm words, with reports in the Sunday Times suggesting changes to the immigration system are coming soon.
One proposal apparently under consideration is a new visa for workers who graduated from one of the top 50 or top 100 global universities. This is slightly confusing as we already have the High Potential Individual (HPI) visa, which opened for applications in May 2022, and gives people a route to the UK based on their academic achievements. Under the HPI system, individuals are eligible if they are a recent graduate from a university which appears on at least two of three internationally recognised university rankings.
So it is unclear how a new visa would differ from this. Even so, while the HPI visa certainly took us a step in the right direction, it still freezes out the kind of talented people that successive governments have sought to attract to the UK. So if we are changing the immigration system, finding ways to complement the HPI visa would be a good place to start.
As it happens, we at the Entrepreneurs Network have been pushing for just such a policy. In July, we published ‘True Potential’, in which Sam Dumitriu and Jason Sockin proposed a novel methodology for determining eligibility for access to the UK labour market on a visa tied to academic performance.
The university rankings which underpin the HPI visa are a useful but imperfect proxy for talent. For example, in one of the indices the HPI visa uses – the Times Higher Education World University Rankings – 60% of an institutions score is based on its research and citations, and just 30% on teaching. Zero weight at all is given to students’ post-graduation outcomes, which is what matters most to a country deciding who to let into its labour market.
Using real world data on graduate earnings from Glassdoor, however, we can get an understanding of how graduates do when they leave their campuses and enter the labour force. This data ought to be used to create a new, earnings-based ranking, which would open up a pathway to the UK for graduates from institutions which educate highly skilled individuals but do not invest heavily in research.
The universities missing from the rankings currently used to determine eligibility include some small and elite American liberal arts colleges, business schools such as the Stockholm School of Economics and France’s IPAG Business School, and some STEM focused institutions, such as the Olin College of Engineering. Perhaps most critically, it would include graduates from India’s prestigious Institutes of Technology, which have educated the current CEOs of Google, Twitter and IBM.
We know just how important getting the right immigration system is for our economy. Previous research from The Entrepreneurs Network, for example, found that while only 14% of the UK population is foreign-born, half of all the UK’s fastest growing businesses have an immigrant as a founder.
Truss has demonstrated that she’s not scared of taking big decisions and breaking the mould. It’s also clear that she understands supply-side reforms are essential if Britain is to prosper. A new approach to high-skilled immigration would ensure that more of the world’s most talented individuals can set up shop in the country, boosting the productive capacity of the economy and delivering new jobs and growth.
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