Regional impact of higher education institutions in Nordic small towns and rural areas

Strengthening the role of higher education in advancing regional development

EDYNORA webinar highlights

Photo: Magnus Liam Karlsson / imagebank.sweden.se

The EDYNORA webinar on 16 June 2025 explored perspectives on higher education in small towns and rural areas in the Nordic Region. Speakers included representatives from the research and academic sector, regional development actors and the business community. One of the key themes discussed was how to strengthen the role of higher education in advancing regional development. Key takeaways included the following:

“There is a limited correlation between the research outputs of HEIs and local economic impact.”

(Research actor)

At the webinar, one of the authors of a recent study on the role of Swedish HEIs in economic development emphasised that expanding research capacity does not automatically lead to local economic growth. The study found that high-end research often contributes little to local skills development and may even drive brain drain, while weak university–business collaboration further limits knowledge spillovers and the practical application of research findings. The authors argue that HEIs should strive for an improved balance between research and teaching to support regional human capital development more effectively and to build more robust partnerships with industry (Rodríguez-Pose & Wang, 2025). The speaker also underlined the importance of making better use of data to inform evidence-based decisions.

“The connection between students, programmes, R&D and private companies must grow – we need a new kind of triple helix.”

(Regional development actor)

Proximity between local companies and regional HEIs brings clear advantages, including trust, shared goals and a mutual interest in building a more prosperous region. However, in complex fields like robotisation, automation and digitalisation, local HEIs may lack the expertise needed to fully meet all demands of a diverse industry. In such cases, stronger collaboration with HEIs beyond the region becomes essential to address companies’ needs and drive innovation.

“The social inequality dimension often receives less attention, with much of the focus placed on economic impact.”

(Research actor)

This reflects a common tendency in policy and practice to prioritise the economic role of HEIs while overlooking their potential to reduce social inequalities. A speaker from the Mapineq project underlined the crucial role of rural and regional HEIs in tackling inequality and strengthening territorial cohesion. Research shows that students from lower socioeconomic backgrounds often have more limited education choices and a greater tendency to study locally, making regional HEIs especially important. When designing local programmes, it is vital to balance the needs of the private sector with the aspirations and realities of local students, ensuring that higher education supports both economic and social development. 

“Each place needs to define its specific target group and build on its own strengths and programmes – particularly in smaller or more rural contexts.”

(University management)

The University Centre of the Westfjords (UW) in Ísafjörður, Iceland, was established in 2005 on the initiative of regional politicians, with the explicit aim of fostering regional development. From the outset, the emphasis was on on-site education rather than distance learning. Given its small local catchment – limited by both geography and language – UW developed niche master’s programmes aligned with local strengths but designed to attract international students, who now make up 90% of enrolment. UW’s success is attributed to four key factors: place (geography and natural assets), programmes (locally grounded yet attractive to international students), politicians (strong political support and funding) and people (a welcoming local community). One of UW’s key contributions has been in strengthening local identity and reputation – fostering pride and reshaping regional narratives through academic outputs, job advertisements and student stories. 

“The role of career guidance needs to be included in research and discussions. Career guidance relates to many of the identified challenges: outreach, recruitment and finding local employment opportunities.”

(A comment from the audience)

Career guidance plays a crucial role in helping individuals make decisions about their future and can influence whether rural young people choose to stay or leave. Traditional models focused on “career progression” and ideal job matches often fail to reflect rural labour markets, where opportunities tend to be more limited and fragmented (Alexander and Fuqua, 2024). In these contexts, the very concept of “career” and career guidance must be re-envisioned in a more place-conscious way: moving beyond narrow economic matching, valuing informal and locally gained knowledge and connecting to broader life aspirations and the idea of a good life (Alexander & Fuqua, 2024). Such services can strengthen student decision-making about educational choices, career pathways and desired spatial futures, facilitating pathways for staying, leaving and returning and supporting the functioning of both local and national higher education provision (Alexander, 2024).