Higher education is a growth industry.

Manchester University is the UK’s biggest traditional university, and along with Manchester Metropolitan University (MMU) and the smaller universities of Salford and Bolton, the city region is home to 100,000 students and the biggest cluster of universities outside London.

The University of Manchester played host to several big advances in the 20th century. These include Rutherford’s work leading to the splitting of the atom and the development of the world’s first modern computer in 1948.

Today, Manchester scientists ranging from Professor Brian Cox, whose TV programmes have done much to popularise science among younger audiences, to the Nobel winning scientists who discovered the new wonder material graphene, are continuing that tradition and raising Manchester’s profile at home and abroad.

Manchester University continues to climb up the “Academic Ranking of World Universities” carried out by China’s Shanghai Jiao Tong University.

Over the past five years it has moved from 78th position to 38th, and its aim is to be one of the world’s top 25 universities by 2015.

“Higher education has grown in the Greater Manchester region to become one of its largest industries and most important export sectors,” says Professor Michael Luger, Dean of Manchester Business School (MBS).

He estimates the region’s universities generate £750m in net new activity in Greater Manchester each year from non-European students alone.

Manchester University, for example, has more postgraduate students than any traditional UK university and some 44 per cent of these come from overseas.

Last year it won the Queen’s Award for Enterprise for more than doubling its annual overseas income in the past six years.

Manchester’s smaller universities have also been growing quickly.

Last October, Salford University opened a campus for more than 1,500 students at MediaCityUK, the BBC’s new Northern hub. It is offering a range of courses to both undergraduates and postgraduates in audio technology, journalism, animation, computer and video games, digital broadcast technology, and creative technology.

MMU is building a £75m business school and plans to strengthen its local community involvement by building a £107m community campus in Hulme, one of the city’s most deprived areas, which will house MMU’s Institute of Education and Faculty of Health, Psychology and Social Care.

The city’s universities are also working together. The best example is Corridor Manchester, a partnership of Manchester City Council, Manchester University, MMU and the Central Manchester University Hospitals NHS Foundation Trust.

It covers a 600 acre site running from the city centre and out along Oxford Road to Whitworth Park.

Apart from the numerous university research institutes, it is home to the largest clinical academic campus in Europe, and a 55,000 strong workforce.

The aim of the partnership, chaired by MMU vice-chancellor John Brooks, is to turn the Oxford Road corridor into the city’s economic powerhouse by creating 22,000 jobs by 2020 and £2.5bn of investment.

However, Manchester’s university chiefs are conscious there are tough times ahead.

They can no longer count on the benefits of the sharply increased public spending that underpinned their growth over the past decade. Big rises in tuition fees, together with tighter controls on student immigrant visas, have changed their financial outlook radically.

Over the past six years the University of Manchester’s income has risen 60 per cent, to £800m.

Professor Nancy Rothwell, who heads the university, still expects the higher education sector to grow but at a slower pace.

“We are recruiting academic staff, but at the same time are reducing our undergraduate numbers slightly in order to improve their experience at university”, says Prof Rothwell.

She is conscious of the need to repair her university’s below average score for student satisfaction in the latest National Student Survey.

Manchester’s universities are having to redefine their priorities now the era of plentiful public spending has passed.

What is the right balance of resources between research and teaching? How commercial should they become? How important a role can they play in regenerating local communities?

Martin Hall, vice-chancellor of Salford university, wrote in a recent blog: “The old approach, in which a British university simply published a catalogue and waited for students to arrive, is rapidly becoming redundant.”

Other countries are offering serious competition; Australia and India have great universities, and China intends to bring in more international students than it sends abroad within the next few years.

Nevertheless, even if numbers do not grow further, the 100,000 students and tens of thousands of professional and academic staff in Manchester’s universities will continue to be a “major source of economic development” says MBS’s Mike Luger.

“Regions throughout the world envy Greater Manchester for what it has,” says Mr Luger, who believes that, as a marketing asset, the region’s university cluster is just behind football.

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