Economic Impact of University System Reaches $12.1 Billion
Atlanta — April 1, 2009
A newly released report confirms that in the midst of a severe economic downturn, Georgia’s public university system continues to be one of the state’s major economic engines. Together, the 35 institutions of the University System of Georgia (USG) made a $12.1 billion economic impact on the state’s economy during Fiscal Year 2008.
The Selig Center for Economic Growth in the University of Georgia’s Terry College of Business analyzed data collected between July 1, 2007, and June 30, 2008, to calculate the University System’s FY2008 economic impact. This work updates similar studies conducted on behalf of The Intellectual Capital Partnership Program (ICAPP), an initiative of the Board of Regents’ Office of Economic Development. The previous report, based on FY2007 data, placed the USG’s economic impact at $11 billion. The first study in the series calculated the USG’s impact at $7.7 billion in FY1999. The latest $12.1 billion thus is a $4.4 billion increase since FY 1999 – or a growth of 57 percent in the system’s economic impact on Georgia’s communities.
“While our research has consistently shown the important economic contributions public colleges and universities make to communities and the state, this latest study supports the argument that the University System can play an important role in helping Georgia’s economy recover,” said study author Dr. Jeffrey M. Humphreys, director of economic forecasting for the Selig Center. “For each job created on a campus, there are 1.6 jobs that exist off-campus because of spending related to the college or university. These economic impacts demonstrate that continued emphasis on colleges and universities as a pillar of the state’s economy translates into jobs, higher incomes and greater production of goods and services for local households and businesses.”
In addition to the $12.1 billion in total impact generated by the University System in FY2008, the study determined that Georgia’s public higher education system is responsible for 108,405 full- and part-time jobs – 2.6 percent of all the jobs in the state – while approximately 39 percent of these positions are on-campus jobs, a majority – 61 percent – are positions in the private or public sectors that exist because of the presence in the community of USG institutions.
Humphreys’ report quantifies the economic benefits that the University System of Georgia’s institutions convey to the communities in which they are located. He determined that $8 billion (66 percent) of the $12.1 billion in total economic impact was due to initial spending by USG institutions for salaries and fringe benefits, operating supplies and expenses, and other budgeted expenditures, as well as spending by the students who attended the institutions in FY2008. Re-spending – the multiplier effect of those dollars as they are spent again in the region – accounted for another $4.1 billion (34 percent). Researchers found that, on average, for every dollar of initial spending in a community by a University System institution, an additional 51 cents was generated for the local economy hosting a college or university.
The University System’s largest institution – the University of Georgia (UGA) with 34,180 students – has the single greatest economic impact: $2.2 billion on the Athens-area economy, or 18 percent of the System’s total statewide economic impact.
Eight institutions in the metro Atlanta area – Georgia Institute of Technology, Georgia State University, Clayton State University, Kennesaw State University, Southern Polytechnic State University, Georgia Gwinnett College, Atlanta Metropolitan College and Georgia Perimeter College – accounted for $5 billion of the University System’s $12.1 billion total, and 41,282 jobs.
The study shows that the System’s two regional universities are significant economic players in their host communities. Georgia Southern University had an impact of $506 million on the local economy and an employment impact of 5,470 jobs, while Valdosta State University’s economic impact was $326 million with 3,317 jobs.
In north Georgia, the combined economic impact of North Georgia College & State University and Gainesville State College was $344 million with an employment impact of 3,129 jobs.
The Augusta area receives a substantial economic benefit from the presence of the Medical College of Georgia (MCG) and Augusta State University. Together, these two institutions have a $1.2 billion economic impact on the Augusta economy and produce 10,667 jobs.
The economic impact of two USG institutions in the Savannah area is significant. Together, Armstrong Atlantic State University and Savannah State University pumped $332 million into the Savannah economy and the two institutions produce more than 3,180 jobs.
The University of West Georgia and Columbus State University have a combined economic impact of $570 million and contribute 5,515 jobs to the west Georgia region.
“This report underscores the important role the USG plays not only in higher education but also in the ongoing economic vitality of Georgia,” said Terry Durden, interim assistant vice chancellor of the University System’s Office of Economic Development.
The Selig Center’s research has its limitations – it neither quantifies the many long-term benefits that a higher-education institution imparts to its host community’s economic development nor does it measure intangible benefits, such as cultural opportunities, intellectual stimulation and volunteer work, to local residents. Spending by USG retirees who still live in the host communities and by visitors to USG institutions (such as those attending conferences or athletic events) is not measured, nor are additional sources of income for USG employees, such as consulting work, personal business activities and inheritances.
To download the Selig Center’s FY2008 report, go to http://www.usg.edu/economic_development/documents/usg_impact_fy2008.pdf.