Just a 1% increase in tertiary education could boost Commonwealth GDP by $28 billion by 2029
A new report, The impact of investment in higher education on economic growth, commissioned by the Association of Commonwealth Universities (ACU) and conducted by London Economics, presents compelling new evidence linking higher education expansion with long-term national economic growth.
The COVID-19 pandemic exposed and deepened long-standing vulnerabilities in higher education across the Commonwealth. Budget cuts in low- and middle-income countries, combined with sharp declines in international student mobility, have left many universities financially strained and less able to meet rising demand – especially as 60% of the Commonwealth’s population is under 30. Despite growing needs, tertiary enrolment remains far below the global average, putting millions of young people at risk of being left behind in the modern economy.
There is an urgent need to reposition higher education as a strategic national asset – one that enables inclusive growth, social mobility, innovation, and sustainable development. But this requires stronger evidence and smarter investment.
In response to this critical moment, the ACU commissioned new research from London Economics to strengthen the case for investment in higher education. The study uses harmonised global data to show a clear, statistically significant link between tertiary attainment and economic growth, providing vital evidence for governments seeking to build more inclusive, resilient, and future-ready economies.
Key findings
According to the ACU’s newest analysis, conducted by London Economics, a 1 percentage point rise in tertiary attainment is associated with a 0.03 percentage point increase in average annual GDP per capita growth over the following five years. In practical terms, this means that if a country like Nigeria increased its tertiary education attainment from 10% to 11%, it could expect its average GDP per capita growth to rise from, say, 1.50% to 1.53% per year – all else being equal.
The returns are even more pronounced in lower-income countries, where the impact of higher education on economic growth is stronger, reflecting the transformative power of upskilling at earlier stages of development.
$28 billion windfall for the Commonwealth
To further illustrate the findings, the report models a scenario in which every Commonwealth country increases its tertiary attainment rate by 1 percentage point in 2025. The result? A collective GDP boost of $28 billion by 2029.
Countries with large economies would see the biggest monetary gains – India ($8.7 billion), the United Kingdom ($6.4 billion), Bangladesh ($997 million), Nigeria ($391 million), and Uganda ($131 million). And the benefits would continue to compound beyond 2029.
Wider societal payoffs beyond GDP
The report also highlights a broader set of long-term benefits universities deliver and which are not captured in GDP data alone. These include:
- Improved health outcomes and reduced crime rates
- Greater civic engagement and social cohesion
- Intergenerational benefits through better outcomes for children of educated parents
- A stronger, more capable public sector workforce
Additionally, universities drive innovation and productivity through research, commercialisation, and partnerships with industry. These indirect contributions are not accounted for in the core econometric model, meaning the real economic impact of tertiary education is likely even greater than the headline findings suggest.
Recommendations for further action
The report calls on governments across the Commonwealth to take bold, evidence-led steps to unlock the full economic and social potential of higher education. Key recommendations include:
- Prioritise public investment in expanding access to tertiary education, particularly in lower-income countries where the economic returns are most pronounced.
- Embed higher education in national economic and development strategies, recognising universities as engines of talent, innovation, and inclusive growth.
- Strengthen data systems to track attainment, spending, and outcomes – enabling more effective policymaking and better targeting of investment.
Professor Colin Riordan, Secretary General and Chief Executive of the ACU, said:
'There is an urgent need for governments to reposition higher education as a strategic national asset – one that underpins inclusive economic growth, social mobility, innovation, and sustainable development. This study shows the scale of the opportunity. The time to act is now.'
Dr Kim Brooks, President and Vice-Chancellor of Dalhousie University, Canada and Chair of the ACU Higher Education Taskforce Finance and Funding Working Group, said:
'This research makes the case, unequivocally, that investing in higher education is not a luxury – it is a development imperative. For Commonwealth countries striving to strengthen their economies and empower their citizens, universities are one of the most powerful levers available.'
Maike Halterbeck, Partner at London Economics, added:
'This analysis confirms that the accumulation of human capital is one of the key drivers of long-term economic growth – at a global level. Our findings show that the attainment of tertiary education qualifications is associated with strong positive impacts on GDP per capita growth, providing a clear case for investment in tertiary education. The effects are particularly large for lower income countries, showing the importance of having a highly educated workforce for countries’ long-term economic development.'
A turning point for education investment
At a time when countries are re-evaluating their growth models in the wake of global shocks, this study sends a clear message: investing in people – through quality, accessible higher education – is one of the most effective strategies for driving long-term national resilience and prosperity.