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Report Brief

Shaping the Future: The Economic Impact of Public Universities

PURPOSE

This report was issued by the National Association of State Universities and Land-Grant Colleges (NASULGC) in 2001. It summarizes an economic-impact survey conducted by NASULGC in 2000 (the third in a series of such surveys) that gathered data from its member institutions about the extent to which they contribute to state and local economies. The survey achieved a 50% response rate and the data represents 96 member institutions and 10 university systems.

KEY POINTS FROM THE REPORT

• States' investments in public universities generate significant jobs, additional spending and increased tax revenues for local and regional economies.
• State-supported universities are powerful engines for economic stability and growth.
• The average return on every $1 of state money invested in a NASULGC institution is $5.
• The mean annual institutional spending reported, including for equipment, maintenance, and capital improvements, is $284 million.
• For every $100 spent directly by a NASULGC member institution, its employees, visitors, and students spent another $138 of their personal funds.
  • This represents an increase from $88 in additional spending reported in the previous NASULGC survey (published in 1997).
  • The increase probably reflects a real increase in spending during a good economic period as well as increasingly sophisticated calculations by institutions.
• The mean tax revenue generated through state and local taxes paid by employees, students, and visitors is $60 million annually.
• The mean number of jobs provided by these institutions is 6,562, not including part-time student employees.
• For every job on a public university campus, another 1.6 jobs are generated beyond the campus.
• On average, two out of three graduates of NASULGC institutions remain in their states for a significant period of time after they receive their degrees.
• The mean amount of sponsored research received by these institutions is $105 million.
• NASULGC institutions aid their local economies by helping to commercialize some of the intellectual property developed in their research. Sixty-five percent have a research park and/or business incubator.

ADDITIONAL INFORMATION

• Statement from the NASULGC Office of Public Affairs:
  • The report makes no attempt to compare the impact of individual institutions or to arrive at cumulative figures about the total economic impact of the responding institutions, because universities, university systems, and, in some cases, states use different criteria for calculating the direct and indirect economic effects of their operations.
• Institutional highlights are included. The summary for Iowa State University:
  • For every state tax dollar spent on the university, the institution generates $5 total spending in the Iowa economy.
  • The university employs 6,202 people, and its presence generates an additional 16,500 jobs in the state.
  • The university spent almost $749 million in fiscal 2000 on supplies, materials, equipment, acquisition, maintenance, and other institutional expenses.
  • The campus received $199 million in competitive grants and contracts in fiscal 1999.
  • University employees spent $325 million in the local economy, and students contributed almost $210 million.
  • The university generated $35 million in tax revenue in fiscal 1999.
  • During the past 10 years, 32 companies employing 862 people were created by faculty and/or others in the area as a result of university-developed intellectual property. In addition, during the same period, approximately 1,200 jobs were generated by businesses located in university research parks or business incubators that did not rely on university-generated work.
  • In the past five years, the university received about $21 million in income from technology-licensing agreements, trade marks, and royalties from university-generated intellectual property.
  • University researchers were issued 227 patents during the past five years.

REFERENCE

National Association of State Universities and Land-Grant Colleges. (2001, August). Shaping the future: The economic impact of public universities. Washington, DC: Author.

Submitted by Leah Ewing Ross, April 2004. This is a report summary and excerpts are quoted directly from the text.