Economic Impact Among State Universities
An annual study of the University System of Georgia’s (USG) economic impact on the State records a 7.4 percent increase from fiscal year 2011 to 2012. In cash, that is a jump of $980 million, from $13.2 billion to a new high of $14.1 billion of direct and indirect spending fueling the regions served by the System’s 31 colleges and universities.
To calculate the economic impact for FY12, the SeligCenter for Economic Growth in the University of Georgia’s Terry College of Business analyzed data collected between July 1, 2011, and June 30, 2012. The annual study is conducted on behalf of the Board of Regents and the study is conducted by Dr. Jeffrey M. Humphreys, director of the Selig Center.
Clayton State University continues to be among the leaders in economic impact among the System’s state universities, ranking fourth in the current study behind the much-larger Kennesaw State University (first) and the University of West Georgia (second). The newly created University of North Georgia, formed by the consolidation of two institutions, North Georgia College & State University and Gainesville State College, is third, thanks in part to a student enrollment for the consolidated university that approaches 16,000, or more than twice that of Clayton State.
The FY12 Selig study found that Clayton State’s economic impact on the Southern Crescent to be $256 million and 2,377 jobs. To give some additional perspective to these figures, it is worth noting that, even in an uncertain economy, Clayton State’s economic impact has increased 39 percent over the past five years. In the FY2007 Selig study, released in the summer of 2008, Clayton State’s economic impact was $184 million. In that same study, the University was responsible for 1737 jobs, meaning that the number of jobs has increased 37 percent in five years.
“We have been analyzing the University System’s economic impact for a number of years and what is clear is the importance of these colleges and universities on local and state economies from just about every variable: direct spending, income, production of goods and services and jobs,” said Humphreys.
The first study in the series calculated the USG’s impact at $7.2 billion in FY1999. The latest $14.1 billion represents a $7.0 billion increase since FY 1999 – or 98 percent growth in the system’s economic impact on Georgia’s communities. That gain far outstrips inflation, which was only 38 percent over this same time period, Humphreys said.
Since the “Great Recession” (Dec. 2007-June 2009), the USG’s institutions really proved their economic worth, with their economic impact rising by $2 billion – from $12.1 billion in FY 2008 to $14.1 billion in FY 2012.
“Even in the worst economic times in a generation or two, our colleges and universities proved to be strong pillars and drivers of the economies of their host communities, said Humphreys. “That’s due to rising demand for higher education regardless of the overall economic climate.”
“Of course, our studies focus on spending and its economic impact, but do not attempt to measure the value the University System adds in terms of quality of life, the creation of a highly educated workforce to meet the needs of businesses, government and communities, or the overall health of communities,” he said.
The FY 2012 study found that Georgia’s public university system generated nearly 139,263 full- and part-time jobs, or 3.6 percent of all the jobs in Georgia. The bottom line is that one job out of every 28 in the State of Georgia is due to the University System.
Approximately 33 percent of these positions are on campus as USG employees and 67 percent are off-campus positions in either the private or public sectors. Humphreys noted that on average, for each job created on campus, there are two off-campus jobs that exist because of spending related to the institution.
Most of the $14.1 billion economic impact consists of 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. Initial spending by USG institutions and students equaled $9.8 billion, or almost 69 percent of the total output impact.
The remaining $4.4 billion (31 percent) of the output impact was created by respending – the multiplier effect of the dollars that are spent again in the region. For every dollar of initial spending by a University System institution or its students, research found that, on average, an additional 45 cents was generated for the local economy.
The full study with data for all 31 USG institutions is available at: http://www.usg.edu/economic_development/documents/usg_Impact_fy2012.pdf
. Current and past economic impact studies can be found at: http://www.usg.edu/economic_development/publications/studies