Even during tough economic conditions Georgia’s public university system remains a powerful economic engine for the state as chronicled in a newly released report. The Selig Center for Economic Growth in the University of Georgia’s Terry College of Business found that the University System of Georgia had a $12.6 billion economic impact on the state’s economy during Fiscal Year 2010.
The FY10 output impact of USG Institutions on their regional economies was essentially flat compared to FY09, reflecting both lower spending by USG institutions on operations and consequently smaller levels of spending by vendors and business that service the System’s 35 institutions. But, the overall employment impact increased substantially, reflecting higher enrollments, more spending by students in labor-intensive economic sectors, and higher overall employment multipliers.
Details of the study indicate that Georgia’s public higher education system generated 130,738 full- and part-time jobs. This was 3.4 percent of all the jobs in Georgia in FY10, or about one job in 30. Most of those jobs – 66 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 of the jobs (34 percent) are on campus.
The Selig Center analyzed data collected between July 1, 2009, and June 30, 2010, to calculate the University System’s FY10 economic impact. The report updates similar studies conducted on behalf of the Intellectual Capital Partnership Program (ICAPP), an initiative of the USG Office of Economic Development. The first study in the series calculated the USG’s impact at $7.7 billion in FY1999; the FY10 economic impact of $12.6 billion is a nearly $5 billion increase since FY99 — a growth of 64 percent in the system’s economic impact on Georgia’s communities.
“Colleges and universities are key drivers in economic development,” said study author Dr. Jeffrey M. Humphreys, director of economic forecasting for the Selig Center. “Higher education institutions educate the workforce, innovate through basic and applied research, and collaborate with employers to help them become more competitive.”
Initial spending by USG institutions equaled $9.1 billion, or 72 percent of the total. This spending included salaries and fringe benefits, operating supplies and expenses, and other budgeted expenditures. When combined with spending by students who attended the institutions in FY10, total initial spending accounted for the lion’s share of the $12.6 billion in overall economic impact. The remaining $3.5 billion (28 percent) in economic impact was created by re-spending – the multiplier effect of those dollars as they are spent again in the region.
In addition to state-wide economic impact, the report quantifies the significant contributions that each of Georgia’s 35 public colleges and universities makes to the local economy of its host community. Researchers found that, on average, for every dollar of initial spending by a USG institution in its host community an additional 38 cents was generated for the local economy.
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 $487 million on the local economy and an employment impact of 6,925 jobs.