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University System of Georgia Has $8 Billion Impact on the State

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Atlanta — April 8, 2002

Georgia’s 34 public colleges and universities had a massive impact on the state’s economy during the last fiscal year, generating nearly 101,500 jobs and infusing $8 billion into local communities, according to a study conducted by the Selig Center for Economic Growth in the University of Georgia’s Terry College of Business.

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 at the Selig Center. To enhance understanding of how the University System of Georgia contributes to the state’s economy, he analyzed three categories of college/university-related expenditures:

  • Spending by the institutions themselves for salaries and fringe benefits, operating supplies and expenses, and other budgeted expenditures;
  • Spending by the institutions on capital projects (construction); and
  • Spending by the students who attend the universities.

Of the University System’s $8 billion total economic impact, $5 billion, or 63 percent, represents initial spending by the USG institutions and the students attending them; the remaining $3 billion, or 37 percent, represents the impact generated by the re-spending of these dollars. The study concludes that, on average, every dollar spent by a USG institution or student injects an additional 56 cents into the host region’s economy.

Humphreys said the University System’s 34 institutions also collectively accounted for 101,427 jobs in the state during FY ‘01 - 2.8 percent of all the jobs in Georgia, or about one job in 37. Approximately 43 percent of the University System’s jobs are on campus - representing employees of the University System of Georgia - and 57 percent are off-campus in either the private or public sectors. On average, for each job created on campus, 1.4 off-campus jobs exist because of spending related to the institution, he noted. Altogether, the System generated $3.7 billion in labor income in FY 2001.

“The University System of Georgia truly is an economic engine that helps to power our state on many levels, from producing graduates to building capital projects, to leveraging our employment and spending power,” said Chancellor Thomas C. Meredith. “Dr. Humphreys’ study documents our value in very specific terms, adding dimension to the many intangibles our campuses contribute to the economy on a daily basis.”

The Selig Center study supports a 2001 report by the National Association of State Universities and Land-Grant Colleges (NASULGC), which concluded that state and land-grant universities are “major economic players in the cities and towns in which they are located.”

“Colleges and universities not only spend money year by year, but also have long-term impacts on the labor force, local business and industry, and local government,” Humphreys noted. “A college or university improves the skills of its graduates, thereby increasing their productivity and their life-time earnings. Also, local businesses benefit from easy access to a large pool of full-time and part-time workers.”

Humphreys cautions that the figures in his study are conservative, noting that the actual economic impact of the University System of Georgia is much higher than his report reflects, because it does not factor in such figures as spending by people who visit USG campuses to attend meetings, athletic events and reunions; spending by USG retirees who have remained in the region; and income earned by USG employees through consulting and other activities.

The study also does not attempt to measure more intangible long-term benefits USG institutions have afforded their host communities, such as increased opportunities for intellectual and cultural stimulation through workshops, lectures, plays, concerts, art exhibits, etc.

The System’s FY 2001 total impact of $8 billion represents a 2 percent decrease since the last time the study was conducted - an $8.2 billion impact was reported for FY 2000. Studies like these typically show statistical variations of plus or minus 2 percent, Humphreys said, so this change does not trouble him.

“The bottom line is that, from a statistical perspective, a 2 percent change really is not significant. Basically, the study suggests that the impact in 2001 was about the same as in 2000,” Humphreys said.

More than $3 billion of the System’s $8 billion economic impact can be attributed to seven Atlanta-area campuses - Georgia Tech, Georgia State and Kennesaw State universities, Georgia Perimeter College, Clayton College and State University, Southern Polytechnic State University and Atlanta Metropolitan College. For example, Georgia Tech’s economic impact in FY ‘01 was $1.3 billion, while Georgia State’s was more than $905 million.

It’s no surprise that the University of Georgia - the largest institution in the University System of Georgia, with 32,300 students - has a far greater economic impact than any other USG campus. According to the study, UGA contributed more than $1.7 billion to the Athens economy during FY ‘01, $400 million more than any other USG institution pumped into its service area.

Two Savannah campuses - Savannah State and Armstrong Atlantic State University -pumped more than $230 million into that city’s economy in FY ‘01. Armstrong Atlantic’s economic impact was $117 million, while Savannah State’s was more than $113 million.

Meanwhile, the University System’s presence infused more than $178 million into the economy of Albany - nearly $122 million of it generated by Albany State University and $56.4 million by Darton College.

“We have found Dr. Humphreys’ report to be extremely valuable in documenting the economic vitality and contributions of the University System throughout the state,” said Annie Hunt Burriss, assistant vice chancellor for economic development. “Data is undeniable, and these numbers tell an impressive story.”

The complete report is available on the University System’s website (www.usg.edu/pubs/) under Publications.

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