External Affairs Division

Economic Impact of University System Reaches $12.7 Billion

Atlanta — July 8, 2010

A newly released report states that Georgia’s public university system made a $12.7 billion economic impact on the state’s economy during Fiscal Year 2009, continuing its record of growing contributions to the state’s economic prosperity. The 35 institutions of the University System of Georgia (USG) generated nearly three percent of the state’s total jobs during that time.

The Selig Center for Economic Growth in the University of Georgia’s Terry College of Business analyzed data collected between July 1, 2008, and June 30, 2009, to calculate the University System’s FY2009 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 FY2008 data, placed the USG’s economic impact at $12.1 billion. The first study in the series calculated the USG’s impact at $7.7 billion in FY1999. The latest $12.7 billion thus is a $5 billion increase since FY1999 – or a growth of 65 percent in the system’s economic impact on Georgia’s communities.

“A college or university improves the skills of its graduates, which increases their lifetime earnings. Local businesses benefit from easy access to a large pool of part-time and full-time workers,” said study author Dr. Jeffrey M. Humphreys, director of economic forecasting for the Selig Center. “In addition, 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. In these ways, and many more, the University System plays a critical role in Georgia’s economic recovery.”

The study found that Georgia’s public higher education system generated 112,336 full- and part-time jobs – 2.8 percent of all the jobs in the state in FY2009. Most of those jobs – 62 percent of them – are off-campus positions in the private or public sectors that exist because of the presence in the community of USG institutions. The remainder (38 percent) are jobs on campus.

Most of the $12.7 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 FY2009. (Initial spending by USG institutions equaled $8.4 billion, or 66 percent of the total.) The remaining $4.3 billion (34 percent) in economic impact was created by re-spending – the multiplier effect of those dollars as they are spent again in the region. For every dollar of initial spending in a community by a University System institution, researchers found that, on average, an additional 51 cents was generated for the local economy hosting a college or university.

The report quantifies the significant contributions that each of Georgia’s 35 public colleges and universities makes to the economy of the community where it is located. The University System’s largest institution – the University of Georgia (UGA) with 34,885 students – has the single greatest economic impact: $2.2 billion on the Athens-area economy, or 17 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 $5.3 billion of the University System’s $12.7 billion total, and 42,434 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 $526 million on the local economy and an employment impact of 5,935 jobs, while Valdosta State University’s economic impact was $340 million with 3,391 jobs.

In north Georgia, the combined economic impact of North Georgia College & State University and Gainesville State College was $367 million with an employment impact of 3,452 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 11,176 jobs.

The economic impact of two USG institutions in the Savannah area is significant. Together, Armstrong Atlantic State University and Savannah State University pumped $352 million into the Savannah economy and the two institutions produce more than 3,332 jobs.

Fort Valley State University, Georgia College & State University, Middle Georgia College, and Macon State College combine to have an economic impact of $630 million and contribute 6,311 jobs to middle Georgia.

The University of West Georgia and Columbus State University have a combined economic impact of $599 million and contribute 5,813 jobs to the west Georgia region.

“Companies and agencies that depend on highly specialized skills often cluster around universities. This is especially true for the knowledge-based companies that are expected to grow faster than the economy in general,” said Terry Durden, assistant vice chancellor of the University System’s Office of Economic Development.

This is the first year that the study documents the economic impact of two new clinical campuses that the Medical College of Georgia is opening in Albany and Savannah. Although the initial economic impacts are quite small, they will grow rapidly once students are enrolled at these MCG branch campuses. The combined economic impact of these two new campuses is $662,385, with seven jobs.

The Selig Center’s research has its limitations – it neither quantifies the many long-term benefits that a higher-education institution and its outreach and service units impart 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.

View the full USG Economic Impact report.

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