When Nancy Rothwell boarded a chartered jet to attend a prestigious property conference in Cannes this year, it was something of a moment for the institution she runs.

The University of Manchester had attended the annual Mipim conference before, when the physicist Brian Cox, its most recognisable academic, presented on graphene, a kind of carbon with important industrial uses. But this was a pure real estate pitch, and the vice-chancellor was taken aback to find herself one of the star attractions.

“We thought there would be a lot of interest . . . but I didn’t quite expect them all standing down the side of the room,” Dame Nancy says. “I was surprised by how many were there,” she adds. “The sovereign wealth funds, international pension funds . . . how big they were.”

The £1.5bn ID Manchester project will transform a faded central campus into a gleaming development, complete with residential blocks, commercial units and multinational tenants

The £1.5bn project, known as ID Manchester, will transform a faded central campus into a gleaming development, complete with residential blocks, commercial units and multinational tenants. In Cannes, she hoped to find a partner to help develop a “trailblazing innovation district”, which she had first sketched out on a dinner napkin.

Once known as Cottonopolis because of its booming textiles industry in the 19th century, Manchester is one of the many cities in the north of the UK damaged by deindustrialisation.

The university is now helping the city reinvent itself as a commercial hotbed for the 21st century. Universities, which were once insulated from financial pressures, are at the forefront of Manchester’s changing skyline, where cranes and glass vie with disused red-brick industrial buildings.

Across the developed world, an urban model anchored around education, rather than commodities, is taking hold, inspired by a US example. In the UK, the approach provides an emerging counterweight to London’s dominance of a services-driven economy.

Manchester is the clearest portrait of this new educational-industrial complex. Its universities act as magnets for young people, draw in investment and find themselves increasingly intertwined with the corporations that hire their graduates and put their research to profitable use. Including Manchester Metropolitan and Salford universities, the city has one of the largest student populations in Europe.

“Education is an industry in this city, and an important one,” says Richard Leese, leader of the city council for the past 23 years.

In a city known for its football clubs and popular music but which has not yet forgotten the trauma of the 1980s recession, the temptations of this new approach are evident: jobs, investment and ideas. But as Manchester booms and its universities move more deeply into the unfamiliar world of commerce, the risks of its new urban geography are beginning to emerge.

Manchester map

Before Cannes, Dame Nancy, a decorated physiologist from rural Lancashire, took another flight. This time, the destination was Boston, Massachusetts, and the purpose was field research.

Kendall Square, close to MIT, was held up in a 2014 Brookings Institution report as a development which best exemplifies the “anchor plus” model — a particular approach to the “commercialisation of innovation”.

Universities make for ideal anchors for an ambitious, modern city. MIT, Brookings wrote, has always emphasised partnerships between the university and industry. And from the 1950s, it has “actively deployed university-owned land to support this goal”.

The land that will be used for ID Manchester is also owned by the university. It comprises the listed Sackville Street Building, a host of postwar tower blocks and the £60m Masdar building, a sleek black structure specialising in graphene and co-funded by the Abu Dhabi government. The UAE’s deputy prime minister, Sheikh Mansour bin Zayed al-Nahyan, bought Manchester City football club in 2008.

The university expects to transfer the land into a joint venture on a 250-year lease, in exchange for an equity stake. One of the attractions, for investors, is the continued involvement of the university, which has relationships with a long list of big companies.

Picture by Jon Super for The Financial Times newspaper. Pic fao Juliet Thomas re story by Thomas Hale. Picture for Big Read re id Manchester feature, May 20-21, 2019. Picture shows Rowena Burns, Chief Executive at Manchester Science Partnerships. (Photo/Jon Super 07974 356-333)
Rowena Burns, chief executive, says Bruntwood’s arrangement with the university 'is driven by the belief that you can align commercial interests to public interests' © Jon Super/FT

Just around the corner, on the city’s Oxford Road, a similar project is well under way. Bruntwood, a local developer, is working on a site formerly occupied by the BBC and has secured Hewlett Packard Enterprise as a tenant. The US company has relocated its graduate programme for sales to Manchester.

Bruntwood grew rapidly through the 1990s when founder Michael Oglesby and his son Chris refurbished old office blocks and let them out for a profit. But Bruntwood is now at the forefront of the city’s education-fuelled ecosystem. It is, along with the university, a joint shareholder in Manchester Science Partnerships, an incubator for new businesses.

“A lot of what the university wants to achieve out of ID Manchester is what we’ve already been trying to achieve,” says Phil Kemp, chief executive of Bruntwood’s SciTech, a joint venture with the insurance company Legal & General which aims to build a “network of thriving innovation districts” and will invest £360m over a decade.

“We want to replicate this model everywhere,” he says, adding that Bruntwood is in talks with other cities. “We wouldn’t go anywhere without a university being at the core of it.”

This model is enthusiastically championed by Manchester’s local government. Sir Richard says that when he took office as leader of the city council in 1996, British universities had little interest in the communities around them. “If anything they would have liked to build a wall around themselves,” he says. “Now, it’s the opposite.” This is true across the UK, where universities have turned to alternative sources of investment as direct government funding has declined.

Sir Richard, convinced that universities need “critical mass”, encouraged the arts-heavy Manchester University to merge with the University of Manchester Institute of Science and Technology in 2004. Like Dame Nancy, he also points to places such as Boston’s Kendall Square as a “triple helix” model combining the private sector, government and universities. Derelict land, vacated after the city’s industrial decline, offers opportunities for development.

“If you go around East Manchester now, you will see large swaths of empty land,” says Sir Richard. “They used to be factories”.

MANCHESTER, ENGLAND - OCTOBER 23: Chancellor of the Exchequer George Osborne (L) and the President of the People's Republic of China Xi Jinping are given a tour of the National Graphene Institute at Manchester University by Nobel Prize winners Professor Sir Kostya Novaselov & Professor Sir Andre Geim on October 23, 2015 in Manchester, England. After listening to a presentation from Dame Nancy Rothwell, the party toured the University Centre which leads the world in graphene research and is one of the most important centres for commercialising the one-atom-thick material. (Photo by Richard Stonehouse - WPA Pool/Getty Images)
Nancy Rothwell with former UK chancellor George Osborne, left, and Chinese president Xi Jinping, right, at Manchester university's graphene institute in 2015 © Getty

The Soapworks in Salford once produced toothpaste, detergent and dishwasher liquid on a large scale. Even at the time of its closure in 2004, it was making more than 1m products a day.

It is now the new home of TalkTalk, the first FTSE 250 business to move its head office to Greater Manchester. The old industrial machines are memorialised in black and white photographs on the walls, but the interior spaces now include ping-pong tables and games consoles. The cranes of central Manchester are visible from the balcony.

Daniel Kasmir, head of UK human resources for the company, identifies the education industry as a crucial reason for the move. “We have the biggest student population in Europe here and a huge pool of talent,” he says. TalkTalk is working closely with all three local universities, and plans to begin doing schemes with students that involve working for a year in industry.

More businesses are flocking to Manchester. Amazon will this year open its first UK corporate hub outside London in the city, providing 600 jobs. Doug Gurr, UK country manager for the online retailer, points to the number of graduates who remain in the city.

The close relationship between private companies and universities is also on display at the campuses of Manchester Science Partnerships. About 160 companies rent offices across its sites.

Picture by Jon Super for The Financial Times newspaper. Pic fao Juliet Thomas re story by Thomas Hale. Picture for Big Read re id Manchester feature, May 20-21, 2019. Picture shows leader of Manchester City Council Sir Richard Charles Leese. (Photo/Jon Super 07974 356-333)
'Education is an industry in this city, and an important one,' says Richard Leese, leader of the city council for the past 23 years © Jon Super/FT

Rowena Burns, chief executive, says Bruntwood’s arrangement with the university “is driven by the belief that you can align commercial interests to public interests”. It provides spaces where “serendipitous meetings can happen, where educators and industrialists meet and mingle”. It is also about building a global academic and business network. Her managing director, she says, has just returned from Tel Aviv with four leads.

“I’m far more interested in what we might do with Boston and Eindhoven and other cities across the world,” she says, “than I am in what’s happening down the road, in peer cities in the UK”.

There is another side to TalkTalk’s move. The company closed offices in Warrington, Cheshire, and downsized operations in Irlam, Greater Manchester, shifting 1,300 workers to the city. As activity clusters in the centre of Manchester, the city’s surrounding regions are hollowing out. From the most recent census information, the population of 25 to 34-year-olds increased by 47,000 between 2001-14 in the metropolitan boroughs of Manchester and Salford while declining in the city’s eight outer boroughs.

Universities exercise a powerful migratory effect. Charlie Ball, head of higher education intelligence at Graduate Prospects, a careers organisation, says the skilled graduate labour market in the UK is “getting concentrated in larger cities”.

Many graduates come from nearby towns, and are more likely to settle in places where they have studied. “We want to think about whether the larger cities are essentially sucking talented and skilled workers out of surrounding areas,” he says. “To an extent, Manchester operates in the north-west like London does in [the whole of] England”.

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In the UK, half of young people do not enter higher education. Lisa Nandy, Labour MP for Wigan in Greater Manchester, believes that the city has prospered at the expense of its surrounding towns, and their plight is fuelling the rise of populism. Towns are getting older, according to research from the Centre for Towns, a think-tank she helped establish, which she links in part to the push by governments to get more young people to university.

“Young people who could leave and grasp that opportunity to go away to work or study would do so,” she says. “But they increasingly found there was nothing to return home to.”

Holly Madeley, 27, originally from Huddersfield in Yorkshire, studied cell biology at Manchester university. She now works at YourGene, which is based at Manchester Science Park. But housing is an issue. “Even [with] combined salaries, we don’t earn enough to get a two-bedroom house,” she says. “If you want kids, you want them to play in a garden”.

Some of the fiercest critics of the city’s “developer-led” approach are found at the university. Professor Karel Williams, at Alliance Manchester Business School, says its economic and political unsustainability will soon be exposed.

“The cranes on the skyline indicate overbuilding which threatens a price crash in the next downturn,” he says.

Picture by Jon Super for The Financial Times newspaper. Pic fao Juliet Thomas re story by Thomas Hale. Picture for Big Read re id Manchester feature, May 20-21, 2019. Picture shows an architectural model of BruntwoodÕs Circle Square development. (Photo/Jon Super 07974 356-333)
An architectural model of Bruntwood's Circle Square development © Jon Super/FT

Through ID Manchester, the university will have a stake in residential accommodation in the city, as well as office blocks. More of its graduates are staying in the city; they might rent close to the centre, and work for the same companies paying rent to their alma mater.

“This site is about us saying, ‘what do we want for us, what do we want for the city’, because if the city’s thriving, we’ll thrive,” says Dame Nancy, who warns that universities must also avoid becoming “second-rate companies”. She adds: “We’re not master planners, we’re not developers. We just feel we need a partner who is really expert at that.”

Just by the ID Manchester site, a Unite accommodation block houses many students. It is next to the disused Mayfield railway station, soon to be renovated, from where trains once journeyed to nearby towns such as Wilmslow. Thirty years ago, there were just 500 people living in the city centre, according to Sir Richard, compared with tens of thousands today. A bustling city centre comes with many strains. For local leaders, it must be contrasted with the recession of the 1980s. Sir Richard says the city is “still recovering”.

“We are still not back to the population we had in 1971,” he says. “Urban living is becoming a permanent state of affairs, not a passing phase.”

But in Manchester, the past is hard to avoid. The Sackville Street Building, a grand structure which opened in 1902, is particularly popular with investors who have already visited the site. It is one part of the old campus that will not be torn down. A plaque pays homage to a slice of the city’s educational history: the old Mechanics’ Institute. Its first president, Benjamin Heywood, was not, strictly speaking, a man of the sciences or the arts. He was a banker.

Welcome to the ‘entrepreneurial university’

In the mid 1990s, a pair of academics came up with a new way of thinking about higher education. In a now-influential paper, Henry Etzkowitz and Loet Leydesdorff identified what they called a “triple helix” of government, industry and universities.

In more recent work, Prof Etzkowitz, who has worked at Stanford, California and Newcastle, England, elaborated on the idea. “Society is more complex than biology,” he wrote. “A double helix was sufficient to model DNA. A triple helix is required to model university-industry-government interactions.”

What was emerging in the US, he argued, was an “entrepreneurial university” — one that played a crucial role in the incubation of technology-based firms. This had been fuelled in part by the Bayh-Dole Act of 1980, that allowed universities to own federally-funded inventions. 

It also tied education institutions into the very fabric of globalisation, which “takes place through regional networks among universities as well as though multinational corporations”. 

The idea was central to a later 2014 paper by the Brookings Institution on “innovation districts”. The think-tank highlighted the role of “anchor institutions” — often universities — across American cities. It pointed, also, to a parallel reimagining of urban areas, “where industrial or warehouse districts are undergoing a physical and economic transformation”.

For Prof Etzkowitz, the triple helix model for universities is not without complications. “Of course,” he conceded, “not all agree that it should play this new role. Many academics believe that the university best fulfils its mission by limited itself to education and research.”

While his idea was based on a biological metaphor, he turned to theological history to sharpen his assessment of higher education.

“The university is a flexible and capacious organisation,” he wrote. “Like the church, its medieval counterpart, it is capable of reconciling apparent contradictions while pursuing multiple goals in tandem.”

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