1

Anticipated impacts of the new university (Sol Plaatjie University) in

the Northern Cape

Deon KleinsmithStats SA

Provincial ISIbalo Symposium on evidence-based decision making

Midrand17 September 2013

2

Outline• Introduction• Method and study area• Literature• Case studies• Demographic impact• Economic impact• Conclusion

3

Introduction

• HE makes valuable contribution to society

• Boston City (Harvard and MIT), Stanford University (Silicon Valley), Oxford and Cambridge (UK)

• Primary mission is education and research, however, they perform much broader functions contributing to well-being of an area

• They influence a number of factors where they are located, e.g. demographic, economic, cultural, and social

4

South African Universities

• In SA, Northern Cape and Mpumalanga presently do not have fully fledged universities and intention is to build

• Part of government’s infrastructure plan• NDP 2030 to increase enrolment from 950 000 to 1,6m• 2 Universities will be opened in 2014 to accommodate

approx 5 000 (NC) and 15 000 (MP) students• Start-up will however be with limited enrolments and

programmes

5

Method

• Theoretical approach in formulating a position on impacts

• Literature review and uses case studies to determine trends and the likely effects of new university

• On population dynamics, study observes population growth and migration as well as the social implications of such migration

• Study observes direct and indirect economic impacts of construction and student spending, employment trends, and the likely effects on the property market

6

Study area

7

Case studies

• Large body of literature found mostly in developed countries such as USA and UK

• Limited studies in developing countries• Weller (1998) – impact of UNBC on City of Prince

George• Enhanced human capital, skilled people and businesses

to area, staff and students from outside area, expenditures on G&S

• Became one of the largest employers in the region

8

Case studies (cont...)

• Rugg et al (2000) and Powel & Barke (2008) analysed relationship between student population and property prices (UK, Newcastle)

• 40% increase in city population and attracted associated facilities such as retail and recreational facilities

• Caused higher demand on student accommodation with result that students turned to private property market

• Relationship not consistent

9

Case studies (cont...)

• South African study (DST, 2009) – economic impact of 4 universities (Eastern Cape)

• Rhodes University – smallest enrolment figures in SA• Most students from outside region – spending on items

such as food, rental, entertainment, clothing, etc.• Creating demand for G&S of approx R504m (2008) and

additional 1 041 employment opportunities

10

Primary demographic impact• POPULATION SIZE• General increase in population size for university hosting cities• Although matrix of other factors play a role• Grahamstown population for instance has increased by 40%

Stellenbosch Grahamstown Potchefstroom1921 7 305 14 909 13 3651936 10 211 19 773 19 0991946 15 294 22 993 27 2051951 17 757 23 789 32 0001960 22 333 32 611 41 9001970 63 157 41 302 57 4001996 58 907 62 640 102 1122001 58 799 61 746 111 3642011 80 316 67 264 149 230

20 000

40 000

60 000

80 000

100 000

120 000

140 000

160 000

11

Primary demographic impact

• 18-24 yr age group in Grahamstown shows significantly higher percentage of people attending a tertiary institution than those in Kimberley

• More having attained higher education qualification

School College University/ Technicon Other

Kimberley 67.9 22.4 8.9 0.8Grahamstown 52.3 12.2 34.4 1.1

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

80.0

No schooling Some primary Completed primary

Some secondary

Grade 12/ Std 10

Higher education

Kimberley 1.7 3.3 2.6 45.0 41.6 4.8Grahamstown 0.6 4.0 3.2 47.0 33.3 10.7

0.0

5.0

10.0

15.0

20.0

25.0

30.0

35.0

40.0

45.0

50.0

18-24 years attending educational institution

Educational attainment, 18-24 years

12

Secondary effects

• Increase in student population changes demographic profile of an area

• Studentification – concentration of large group of HE students into traditional non-students neighbourhoods

• Generally depicted as having strong negative implications for neighbourhoods (Rugg & Barke, 2000)

• Safe and secure environment disturbed – residents• Difficult to identify with local residents – students

13

Economic impact

14

Economic impact

• Direct impact– Construction contributes significantly– Expected to start during 2014– Purchases of some G&S and employment done

locally– Up to 80% of labour used locally (Notre Dame)

15

Student spending• Spending power determines size of spending• E.g. approx 6 300 students at Rhodes created more

G&S and employment than the approx 9 000 University of Fort Hare students

• Spending to start slow with low enrolment numbers & limited programmes in 2014 but will increase

16

Employment

• Universities create direct and indirect employment• Below trend though is increased employment

Direct employment Indirect/ induced employment Direct employment Indirect/ induced

employment Direct employment Indirect/ induced employment Direct employment Indirect/ induced

employmentRhodes University Nelson Mandela Metropolitan University University of Fort Hare Walter Sisulu University

2006 1 268 1 393 2 709 2 977 1 838 2 020 2 617 2 875

2007 1 473 1 618 2 799 3 075 2 154 2 367 2 891 3 176

2008 1 710 1 879 2 891 3 176 2 525 2 774 3 270 3 593

500

1 000

1 500

2 000

2 500

3 000

3 500

4 000

(DST, 2009)

17

Property market

• Shortage in student accommodation likely to occur in Kimberley

• Landlords proved to be more in favour of student renting (pooling) than non-academic tenants

• Grahamstown property prices have quadrupled since early 1990’s due to increased demand and slow supply (Roodt, 2009)

• University can also have inverse effect on property prices

• Studentification can give rise to drop in prices (Hubbard, 2008)

18

Overall summaryFactors Potential positive impact Potential negative impact Undecided

Demographic factors

Population xIn-migration x

Studentification x

Economic factors

Direct impacts

Construction xStudent spending x

Indirect impact

Employment xProperty market X

19

Conclusion

• Few research found regarding university impact on their hosting city in South Africa

• Government could be better positioned to deal with some of the effects that a new university introduces

• Contribution of new HE does not happen overnight

• Nevertheless, on most of the factors considered, a general positive trend could be anticipated for the city of Kimberley as a result of the new university

20

Thank You