External Affairs Division

Economic Impact of University System Reaches $11 Billion

Atlanta — June 5, 2008

An updated report offers confirmation that Georgia’s public university system continues to be one of the state’s key economic engines. Together, the 35 institutions of the University System of Georgia (USG) packed an economic impact totaling $11 billion on the state’s economy during Fiscal Year 2007.

The Intellectual Capital Partnership Program (ICAPP), an initiative of the Board of Regents’ Office of Economic Development, commissioned the Selig Center for Economic Growth in the University of Georgia’s Terry College of Business to analyze data collected between July 1, 2006, and June 30, 2007, to calculate the University System’s FY2007 economic impact. This work updates a similar study conducted on FY2004 data that placed the University System’s economic impact at $9.7 billion. The first such study calculated the USG’s impact at $7.7 billion in FY1999.

In addition to the $11 billion in total impact generated by the University System in FY2007, the study determined that Georgia’s public higher education system is responsible for 106,267 full- and part-time jobs – 2.6 percent of all the jobs in the state or about one job in 39. Approximately 42 percent of these positions are on-campus jobs and 58 percent are positions in the private or public sectors that exist because of the presence in the community of USG institutions.

“All 35 of the University System’s institutions are economic engines in their communities and the state,” said study author Dr. Jeffrey M. Humphreys, director of economic forecasting for the Selig Center. “The benefits they provide permeate both the private and public sectors of the communities that host the campuses. For each job created on a campus, there are 1.4 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.”

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 $7.3 billion (66 percent) of the $11 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 FY2007. Re-spending – the multiplier effect of those dollars as they are spent again in the region – accounted for another $3.8 billion (34 percent). Researchers found that, on average, for every dollar of initial spending in a community by a University System institution, an additional 52 cents was generated for the local economy hosting a college or university.

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.

“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 and other state and local agencies, as well as 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 $470 million impact on the local economy and an employment impact of 5,238 jobs, while Valdosta State University’s economic impact was $302 million with 3,100 jobs.

In north Georgia, the combined economic impact of North Georgia College & State University and Gainesville State College was $298 million with an employment impact of 3,000 jobs.

Seven institutions in the metro Atlanta area – Georgia Institute of Technology, Georgia State University, Clayton State University, Kennesaw State University, Southern Polytechnic State University, Atlanta Metropolitan College and Georgia Perimeter College – accounted for almost $4.5 billion of the University System’s $11 billion total, and 40,700 jobs.

The University System’s largest institution – the University of Georgia (UGA) with 33,405 students – has the single greatest economic impact: close to $2.1 billion on the Athens-area economy, or 19 percent of the System’s total statewide economic impact. Humphreys noted that, due to changes in the way the University of Georgia accounts for and reports HOPE Scholarship funds and Stafford loan funds, the expenditures and impact of this institution are not comparable to previously published estimates.

The Augusta area receives a significant economic benefit from the presence of the Medical College of Georgia (MCG) and Augusta State University. Together, these two institutions have a $1.1 billion economic impact on the Augusta economy and produce 11,000 jobs. However, MCG’s economic impact does not include spending by the hospital and clinics operated by MCG Health, Inc., which became a non-profit corporation in 2000. The expenditures and impact of this institution are not comparable to impact data gathered before FY2004.

The economic impact of two USG institutions in the Savannah area is significant. Together, Armstrong Atlantic State University and Savannah State University pumped $317 million into the Savannah economy and the two institutions produce more than 3,100 jobs.

“This Economic Impact Report continues to be an invaluable study,” said Terry Durden, interim assistant vice chancellor of the University System’s Office of Economic Development. “It conclusively demonstrates that – beyond all the 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.

To download the Selig Center’s FY2007 report, go to

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