Economic Impact of University System Grows to $9.7 Billion
Atlanta — January 18, 2005
A newly released study on the University System of Georgia’s $9.7 billion annual economic impact on the state of Georgia indicates that the economic clout of the USG’s 34 public colleges and universities continues to increase.
The study, which spanned Fiscal Year 2004, was conducted by the Selig Center for Economic Growth in the University of Georgia’s Terry College of Business. It was initially released in 2000 covering Fiscal Year 1999, updated in 2002 to report Fiscal Years 2000 and 2001, and has just been updated again to show a $1.7 billion increase in the System’s economic impact since the 2002 study (identified as $8 billion in Fiscal Year 2001).
In addition to the $9.7 billion in “output impact” generated by the University System, the study found that public higher education is responsible for 2.8 percent of Georgia’s workforce, or 106,831 full- and part-time jobs.
The Intellectual Capital Partnership Program (ICAPP), an initiative of the Board of Regents’ Office of Economic Development, commissioned the study by Dr. Jeffrey M. Humphreys, director of economic forecasting for the Selig Center.
This is the first year the study did not include the economic impact of construction projects on the University System’s campuses. Because of this change, some University System institutions may show a decline in overall economic impact, despite the fact there may have been a significant increase in enrollment over the time period between the two studies.
“The single biggest factor driving the increase in the System’s economic impact is the significant growth in the number of students enrolled in Georgia’s public colleges and universities,” Humphreys said. “Not only are there more students, but they are spending more. And of course, with more students, institutions are spending more to serve them.”
The $9.7 billion “output impact” is a measure of sales in a community. The study calculated spending by each of the System’s 34 institution on salaries and benefits, operating supplies and expenses ($3.8 billion), as well as spending by students who attend that particular institution ($2.6 billion). Of the $9.7 billion total, $6.4 billion (66 percent) is initial spending by the institutions and students; $3.3 billion (34 percent) is the multiplier effect of those dollars as they are spent again in the region. Humphreys found that on average, for every dollar of initial spending in a community by University System institutions, an additional 52 cents was generated for the local economy hosting a college or university.
Yet another component of the study is the analysis of the employment impact of all 34 institutions on their host communities. The impact on jobs is significant, accounting for $4.4 billion in salaries and wages for 106,831 full- and part-time employees. Approximately 62 percent of these jobs are off-campus positions in either the private or public sectors and 38 percent are on-campus employees of the University System. The study found that on average, for each job created on campus, there are 1.7 off-campus jobs that exist due to spending related to the institution. Jobs related to the University System account for about one in every 36 Georgia jobs.
Humphreys notes that the figures do not include spending by people who visit USG campuses to attend meetings, athletic events and reunions, spending by USG retirees living in a community, and income earned by USG employees through consulting and other activities.
“Another important aspect of this study is that we have very detailed data across institutions that can be used for a wide range of planning purposes by the Board of Regents or other state and local agencies and the private sector,” said Humphreys.
For example the study shows that the System’s two regional universities are significant economic players in their host communities. Georgia Southern University had a $439 million impact on the local economy and an employment impact of 6,252 jobs while Valdosta State University’s economic impact was $258 million with 3,635 jobs.
In north Georgia, the combined economic impact of North Georgia College & State University and Gainesville College was $234 million with an employment impact of 2,910 jobs.
Seven institutions in the metro Atlanta area – Georgia Institute of Technology, Georgia State University, Clayton College & State University, Kennesaw State University, Southern Polytechnic State University, Atlanta Metropolitan College and Georgia Perimeter College – accounted for $2.9 billion of the University System’s $9.7 billion total, and 37,239 jobs.
The System’s largest institution – the University of Georgia with 33,405 students – has the single greatest economic impact: $2 billion on the Athens-area economy, or 21 percent of the System’s total statewide economic impact.
The Augusta area receives a significant economic benefit from the presence of the Medical College of Georgia and Augusta State University. Together, these two institutions have a $951 million economic impact on the Augusta economy and produce 10,731 jobs.
The economic impact of two USG institutions in the Savannah area is significant. Together, Armstrong Atlantic State University and Savannah State University pumped $251 million into the Savannah economy and the two institutions produce for 3,315 jobs.
“This Economic Impact Report continues to be an invaluable study,” said Joy Hymel, executive director of the University System’s Office of Economic Development. “It conclusively demonstrates that beyond the almost incalculable benefits colleges and universities offer communities through a more educated society, cultural opportunities and other activities, our campuses have an ongoing and powerful economic impact on communities large and small.”
Note: A complete copy of the report can be accessed on the web at: http://www.icapp.org/pubs/impact/