The Welsh Assembly should give ÖйúAƬ new, larger roles to help the region, says Brian Smith.

"Nerth gwlad ei gwybodaeth" ("A nation's strength is in its learning"). This message is carved prominently in the Portland stone over the main entrance to Cardiff University. It features prominently on the masonry of many Welsh universities as the founding fathers of ÖйúAƬ in Wales were in no doubt as to the importance of the role of education in the development of their country. The maxim is as relevant today as it was 100 years ago and should provide a clear vision for the Welsh Assembly.

There are many reasons why a strong ÖйúAƬ sector is important. The first and oldest is the inherent value of education in enriching the lives of individuals and promoting a just and civilised society to which all can contribute in full measure. There are many other practical ways in which our universities can play their part. As John Andrews, the chief executive of the ÖйúAƬ Funding Council for Wales, has said, the success of the sector is in no small part due to its contribution to wealth creation.

Depending on the size and location of the university, this contribution can arise in many ways, including providing access to expertise and facilities, assisting in the process of attracting inward investors, particularly those reliant on high-level research support, establishing spin-off companies, undertaking commercial consultancy and providing skilled graduates to the local labour force.

ÖйúAƬ

There is no doubt that universities can play more than a supportive role in economic development. In the United States, MIT, Stanford, Harvard and Berkeley have transformed their regions by the establishment of concentrations of high-tech companies. The success of Silicon Valley in California is, perhaps, the most noteworthy example. The assembly will be aware that Wales cannot prosper by providing low-cost labour. It must develop knowledge-based industry. The US examples, and indeed those of the Oxford and Cambridge regions, will provide challenging role models.

The assembly members will also be aware that ÖйúAƬ is a most important economic sector in its own right. A recent study shows that in Wales it provides direct employment for 14,000 people, plus another 23,200 full-time jobs indirectly. The total expenditure of ÖйúAƬ institutions is more than Pounds 500 million, with multiplier effects leading to a total output of more than Pounds 1 billion. The "export earnings" from overseas students studying at ÖйúAƬ institutions in Wales is roughly Pounds 100 million.

ÖйúAƬ

These factors can have a striking effect on the locality. Cardiff University enhances local incomes by more than Pounds 50 million. It has been estimated that other universities in Wales contribute more than Pounds 10,000 a year to each family in their region.

These, then, are the benefits the new assembly members will take into account. But there will be other, negative factors that can challenge the support of ÖйúAƬ - most obviously, the priority the assembly will attach to primary and secondary education and to health care, both of which can absorb vast sums. There will be some who see universities as "ivory towers" and less deserving of support. Others may be focused on local issues, and ÖйúAƬ in the UK has always had a strong national and international role.

There may be less commitment to ÖйúAƬ because it will not be under the direct control of the assembly. The Governance of Wales Act ensures the independence of the sector by maintaining the ÖйúAƬ Funding Council for Wales in its current role as a buffer between government and ÖйúAƬ institutions.

Uncertainty, which is often associated with change, is inevitable when it relates to matters of governance. I believe, however, that the new enthusiasm the assembly will inject into the life of Wales will be considerable. We are looking to the new opportunities the assembly will provide for our institutions, not least those in the ÖйúAƬ sector, to influence policies and priorities and to play an increasing role for the benefit of Wales.

ÖйúAƬ

Sir Brian Smith is vice-chancellor of Cardiff University.