Oxford, Cambridge fall in global college rankings — experts say it's a red flag for UK innovation

Top British universities fell in global rankings last week, with experts raising red flags about the region's ability to continue attracting international talent and nurturing innovation.

The annual QS World University Rankings saw Britain's elite Oxford and Cambridge universities drop one place to fourth and sixth, respectively. Meanwhile, 54 of 90 British universities fell in rankings. They include a number of leading ones, including the University of Edinburgh, which dropped seven places to 34th, and the London School of Economics and Political Science, which dropped six places to 56th.

QS World University Rankings measured the performance of over 1,500 universities in more than 100 locations globally using metrics such as research and discovery, learning experience, employability, global engagement, and sustainability.

However, Sankar Sivarajah, head of Kingston Business School, told CNBC Make It that despite the headline figures, there has been some progress: 17 of the 90 U.K. universities made the global top 100 and institutions such as Imperial College London, the University of Oxford, the University of Cambridge, and University College London held their positions in the top 10.

'Intensifying global competition'

Nevertheless, “the sector faces significant challenges from intensifying global competition, declining research funding, and difficulties in improving metrics such as faculty-student ratio and internationalization,” Sivarajah said.

He explained that institutions in China, Singapore, and Australia are “making sustained investments in research, international partnerships, and faculty recruitment,” while the U.K. lags behind in those areas.

“The UK must prioritize sustained investment in research and development, focus on graduate outcomes and employer reputation, and strengthen strategic global engagement to remain competitive,” he said.

Edward Knight, president at venture capital firm Antler, added that the declining ranking, on top of a proposed 6% tax on foreign students studying at U.K. universities, could make the region a less attractive study destination.

“What I hear at the same time ... is that increasingly, in places like China and India, the narrative is shifting to 'Hey, kids don't go abroad to study anymore. You can stay at home.' So the combination of that plus taxes to make it more expensive, for foreign students, is obviously not helpful,” Knight said.

“If you're putting taxes on people coming in around at the same time as there's a growing hesitance to actually go and study abroad anyway, then that's obviously not a particularly healthy set of drivers for the overall health of the ecosystem,” Knight added.

'Europe is significantly behind the rest of the world'

British universities falling behind in global rankings is also a wake-up call for the region's tech and startup sector, which has persistently been seen as lagging behind the U.S. and China.

“It's all well and good saying the U.K. is the leading place for innovation in Europe, but I think that you're going to get a more rounded, more balanced perspective if the reference set is actually broader than that,” Knight said.

He pointed out that artificial intelligence will be integrated into the national curriculum in China from primary school; the U.S. has the Stargate Project, an initiative investing $500 billion over the next four years to build AI infrastructure; and the Abu Dhabi launched MGX, an investment firm for AI technologies.

“I think what you would probably conclude is that it's all fine being on top of the pile in Europe, but Europe is significantly behind the rest of the world,” Knight added.

Knight noted that Cambridge University has produced some of the region's finest tech companies, including DeepMind and Darktrace, but that the U.K. has lost those firms to the United States. Darktrace was bought by a private equity firm in the U.S., while DeepMind was sold to Google.

“For some reason, these companies feel that they are better domiciled in the United States, but also because the growth multiple, the growth valuation the market in the U.S. puts in these companies is higher than it is in the UK,” Knight said.

“Revolut is probably a $50 billion company. Are they going to go public in the United States or are they going to stay here? Spotify came out of Stockholm, but it's listed on the NASDAQ. If you want to host these businesses and companies, you need to be able to provide a new, more supportive environment,” he added.