Report: 33,000 jobs and an 11:1 return on every state dollar invested
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The University of Massachusetts system contributed over $4.8 billion to the Massachusetts economy in Fiscal Year 2010 ߝ a return on investment of more than $11 for every $1 in state money that UMass received, according to a study released today.
The report, prepared by the University of Massachusetts Donahue Institute, also underscores the role of the five UMass campuses as economic engines for their individual regions and for the state.
UMass directly employs 16,623 people across the Commonwealth. If the University was a private employer, it would be ranked in the Top 15 in Massachusetts, ahead of such major employers as Genzyme, Biogen Idec and NStar.
Spending emanating out of the University helps to support an additional 16,598 jobs in a variety of sectors in every region of the stateߝ from healthcare to real estate to hospitality.
The major drivers of economic impact are student, faculty and staff spending, construction projects and the University purchasing the goods and services required for its educational, research and public service activities.
"This report makes clear that alongside academic excellence and a strong reputation for cutting-edge research, UMass should also be recognized as a crucial economic asset to the entire Commonwealth," said UMass President Jack M. Wilson. "We see that during this past year, every state dollar invested in UMass multiplied eleven-fold in the form of economic impact."
"This is a vivid, contemporary example of how the University's original economic-development mission endures and has grown far beyond what its founders could have imagined," President Wilson added.
The Donahue Institute study accounts for economic impact generated by the combined effects of University System operations and faculty and staff and student spending at the University of Massachusetts Amherst, University of Massachusetts Boston, University of Massachusetts Dartmouth, University of Massachusetts Lowell, University of Massachusetts Medical School and the University of Massachusetts central services division.
While the 16,598 jobs supported by University spending occur across many sectors of the Massachusetts economy, the largest sectors include over 3,430 jobs in trade, transportation and utilities, over 2,820 jobs in education and health services, and over 2,650 jobs in leisure and hospitality.
"It is clear that the University of Massachusetts is a terrific investment for the Commonwealth," said Robert J. Manning, chairman of the University of Massachusetts Board of Trustees. "The University supports thousands of jobs in every region of the state and promotes economic innovation across many sectors. It is apparent that the education that the University of Massachusetts provides and the research it conducts is important for Massachusetts to remain an economic leader nationally and internationally."
According to the new report, the economic impact of each campus is:
- Amherst: $1.434 billion
- Boston: $632 million
- Dartmouth: $356 million
- Lowell: $490 million
- Medical School: $1.752 billion
While gauging the University's economic impact is "an important and telling measurement," it is not the only way that the University's contribution to the Commonwealth's economy can be described, President Wilson said.
President Wilson noted that UMass helps to drive the economy by educating 68,000 students annually, producing more than 12,000 graduates each year, by conducting nearly $500 million in sponsored research annually and by producing discoveries that create new companies and strengthen firms already doing business in Massachusetts. In Fiscal Year 2009, the University of Massachusetts earned $73 million from licensing fees and royalties, placing it in the Top 15 nationally in intellectual property income.
In addition to University operating expenditures and faculty, staff and student spending, the total University System economic impact includes one-time construction project expenditures totaling over $187 million. These construction projects yielded over $334 million in total economic activity in Massachusetts and 1,857 jobs. Earlier this year, the UMass Board of Trustees approved a borrowing plan to fund $546 million in additional construction projects on all five campuses.
The data underpinning the new report was compiled and analyzed by the Institute's Economic and Public Policy Research Unit, using the IMPLAN modeling system ߝ a widely used proprietary software tool. IMPLAN combines the U.S. Bureau of Economic Analysis' Input-Output Benchmarks with regional employment and wage data to construct quantitative models of the flow of goods and services among businesses that purchase materials and services from one another and from employees who use their increased earnings to purchase additional goods and services from local businesses.
This methodology and the database generated is very conservative and does not take into account millions of dollars generated by the University System from research, technology spinoffs, patents and start-ups. The vast majority of dollars spent on the University system come not from the state but from research funding, patents and intellectual property, professional services and student fees.
State appropriations for the University System totaled $429 million (exclusive of federal stimulus funding) in Fiscal Year 2010ߝ representing 16 percent of the entire UMass operating budget of $2.66 billion. That makes the ratio of total University economic impact ($4.83 billion) to Commonwealth investment ($429 million) more than 11:1.
The 16,598 external jobs supported by UMass economic activity break down in the following way:
- Amherst: 5,174
- Boston: 2,516
- Dartmouth: 1,329
- Lowell: 1,711
- Medical School: 5,439
- UMass Central Services: 430
For businesses in Lowell and the Merrimack Valley, UMass Lowell generates $490 million and 1,711 external jobs.
"The University of Massachusetts Lowell represents the future of Lowell and the surrounding region," said James J. Cook, executive director of the Lowell Development & Financial Corporation or Lowell Plan. "UMass Lowell has raised the city of Lowell up by its presence, providing energy and jobs to the Merrimack Valley. It has helped to transform this symbol of the Industrial Revolution into a city that competes in the global economy."