Transcript Rochester Higher Education Development Committee

Rochester Higher Education
Development Committee
Projections of Economic Impact
The Role and Impacts of a Signature
Research University
in Southeast Minnesota
The Assignment
The Rochester Higher Education Development Committee
recommends that the State of Minnesota:
Establish a world-class signature research and higher education
institution focused on programs that complement and capitalize on
southeast Minnesota’s existing leadership roles in health sciences,
bio-sciences, engineering and technology.
• Impact Economics, LP retained to
calculate the projected economic impact
and potential return on investment to the
State of following this recommendation.
The Basic Structure of
University Impacts
Multiplier Effect (Local Re-spending)
Business
Formation
Business
Growth/Retention
Labor
R&D
Supplies
Local
Spending
Utilities
Backward
Effects
Business
Attraction
Forward
Effects
Education
Private returns
Social returns
Building
Extension
Outreach
& Service
Volunteerism
Consulting
Total Impact
(Backward Linkage)
Q of L Events
Image
Impact Classifications
• Backward Linkage (Spending) Impacts
– Input/output analysis based
– Impact on output (business volume) and
employment
• Forward Linkage (Functional) Impacts
– Research & Development
– Higher Education
– Outreach and Service
Research Assumptions
•
•
•
•
The basic parameters used are those specified in the RHEDC report delivered to
Governor Pawlenty and the State Legislature on January 25th, 2006. The RHEDC
report details the size, scope and mission of the expanded university and serves as
the foundation for developing impact estimates.
The specific characteristics of national universities known to be productive in
stimulating regional technology-based economic development have been evaluated,
and the impact projections assume the expanded university will be developed
similarly. The university should be state-of-the-art in terms of incentives and
support for entrepreneurial and economic development activity.
It is assumed that education gained at the University of Minnesota Rochester
will not simply be a substitute for education available elsewhere within
Minnesota. It is expected that the majority of students will be achieving specialized
degrees specific to the health science, biomedical, bioscience, computer science and
technological focus contained in partnering institutions such as the Mayo Clinic, IBM
and other public/private sector partners.
The rate of retention in the State of Minnesota of students graduating from the
University of Minnesota Rochester is projected to be similar to the national average
for land grant colleges and universities.
Various forces impacting the university and its operating environment will
serve to affect (upwards or downwards) the impacts that are ultimately
achieved. Market forces, capital availability, actions by competing
universities, state revenue and its impact on state spending, and the
unpredictable nature of innovation and scientific discovery are variables that
are subject to change and thus will affect the ultimate impacts achieved.
Economic Assumption
• Impact Economics understands that the intension is to
create a signature research university with specialized
programs designed to link the university to the research
and skilled human capital needs of key economic entities
in the state within target industry sectors.
• Because of its highly specialized focus, the university will
not be in direct competition with other state higher
education institutions.
• Technology-based economic development will expand
the economy of the State and SE Minnesota region,
thereby increasing demand for the more broad-based
educational services of other regional and state higher
education institutions.
University Parameters
• Will be an expansion of the University of
Minnesota Rochester
• Will be a highly focused signature
research institution with programs focused
in:
– Biosciences and Health Sciences
– Engineering, Computer Sciences and
Informatics
– Business Studies and Entrepreneurship
University Development
• The RHEDC report envisions expansion of the University
of Minnesota Rochester in two primary phases.
• The first phase covers years one through five of
university operations and assumes that the university will
be initially accommodated in 30,000 sq. ft. of leased
space in Downtown Rochester.
• Once established at this leased location, planning would
begin for development of a purpose-built campus in
close proximity to the Mayo Clinic (again in Downtown
Rochester).
• Construction of the first phase of the permanent new
campus is anticipated to begin in Year 4 with
development on a two city-block site with a newly
constructed 60,000 sq. ft. facility (with occupancy
anticipated in Year 6).
Size Parameters
(at new campus)
Sq. Ft.
Students
Faculty
Staff
2011
60,000
2012
60,000
2013
60,000
2014
60,000
2015
60,000
842
21.1
63.3
968
28.4
85.2
1,162
36.8
110.5
1,395
49.7
149.2
1,673
65.2
195.7
RHEDC financial projections for the University
expansion show a state investment of $45.4 million
for developing new facilities (including debt service).
Annual operating costs, by the year 2015, are
projected to be $61.5 million.
Structuring for Technology Based
Economic Development
• Economic impact projections assume that the University
of Minnesota Rochester will be structured to be state-ofthe-art in terms of industry-partnering, faculty
entrepreneurship, technology transfer and new business
formation.
• The state has the opportunity to be innovative, creating a
research university focused on biosciences, information
technology and other advanced technological disciplines
that is structured to facilitate the local commercialization
of research discoveries and innovation.
• This opportunity should not be missed, and it is
imperative that the state does not allow just another
traditional academic community to develop, devoid of a
formal commercialization imperative and mission.
Structuring for Technology Based
Economic Development
•
•
•
•
•
•
•
•
•
•
•
•
Entrepreneurial institutional culture and rewards system
Hiring entrepreneurial faculty
Institutional financial structures that favor industry research
IP protection fund
Liberal IP licensing and royalty policies
Industry research partnerships and industry-university
advisory boards and councils
Pre-seed and seed capital fund
Entrepreneurial development courses, assistance and
mentoring programs
Business incubator program
Industry education and training programs
Industrial extension and technical assistance
Career and Internship Services and Placement
University Research, Development and Education
Structuring for Technology-Based Economic Development
Private Sector
Industry-University
Advisory Boards
Partnering & Business Development
Industry Research Partnerships
Institutional Focus
Industry Education & Training Programs
Research Niches and
Core Competencies
Industry Extension & Technical Assistance
IP Protection and Technology Transfer
Applied and Translational
Research Imperative
Impact Outcomes for Minnesota
New Technology and Products
for Existing MN Business
Technology & Process Improvement
for Existing MN Business
Creation of New MN Technology Businesses
Entrepreneurial Training & Development
Pre-Seed/Seed Capital Fund
University Entrepreneurial Culture
(Incentives and Awards)
Business Incubator and Services
Career and Internship Services/Placement
Partnerships with Economic
Development Organizations
State & Local Government
Attraction of Businesses to MN
Licensing and Royalty Revenues from
Out-of-State Projects
Trained Personnel for MN Businesses
and Increased Personal Incomes
Economic Impacts
Impact Highlights
•
Backward Linkage Impacts
– Construction of expanded facilities: 121 jobs and $98.3 million in total economic
impact (2.2 ROI)
– Operations: 2015 (full size) 261 direct jobs and 375 indirect jobs via institutional
spending. $90.4 million in annual spending impacts. (1.5 times ROI on operating
expenditures).
•
Forward Linkage Impacts
– Between $30 and $60 million (per year of higher education) for the Minnesota
Economy through net present value of productivity increases realized through
higher education gained at the university. (Added to spending impacts this
increases operational ROI to between 2.0 and 2.5)
– The University is estimated to attract between $18 million and $22 million in
external funds to support advanced research programs on campus.
($276,000 to $337,400 per faculty member).
– Research to produce innovations expected to generate between 8 and 13 startup enterprises in 2015, with direct employment ranging from 240 to 380 jobs.
Employment and output multiplier effects will be significant. At the 240 direct
jobs level between 642 and 1,331 total jobs would be generated in Minnesota
and between $105.7 and $345.3 million in total economic output. This increases
the operational ROI to between 3.7 and 8.1.
– Advanced education will provide graduates with a two-times increase in their
average annual lifetime earnings, equating to an increase of between $0.66
billion and $1.32 billion in personal lifetime earnings capture for Minnesotans
occurring on an annual graduating class basis.
Backward Linkage Impacts
Impact of the University on the Minnesota Economy
(all data in $ millions, except employment)
Output
Income
Employment
(fte’s)
State
Personal
Income
Taxes
Direct
39.5
--
--
--
Indirect
58.8
25.2
121
0.8
Total
98.3
25.2
121
0.8
Direct
44.6
9.9
261
0.7
Indirect
45.8
13.0
375
0.5
Total
90.4
22.9
636
1.2
Construction
Operations (2015)
Forward Linkage Impacts
• Research
• Higher Education
• Outreach & Service
• Other Impacts
Function
University R&D:
Functional
Economic Impacts
External
research funds
attracted to
Minnesota
Commercial
research
funding from
external
industry
University
Research
and
Development
Commercial
research
funding from
Minnesota
industry
State of
Minnesota
research funds
New
products,
discoveries
and
solutions to
problems
Benefits
Impacts
Licensing of
intellectual
property
Minnesota-based licensees. Open
new markets, generate new revenue
streams, enhance competitiveness.
Jobs, output,
income and gov’t
revenue
Incubation and
generation of
new
Minnesota
businesses
New Minnesota business enterprises.
Open new markets, generate new
revenue streams, enhance
competitiveness.
Jobs, output,
income and gov’t
revenue
New products
for Minnesota
industry
Enhanced income streams, product
lines, productivity and income for
Minnesota businesses
Jobs, output,
income and gov’t
revenue
Improved
products for
Minnesota
industry
Enhanced income streams, product
lines, productivity and income for
Minnesota businesses
Jobs, output,
income and gov’t
revenue
Improved
production
technologies
Enhanced income streams, product
lines, productivity and income for
Minnesota businesses
Jobs, output,
income and gov’t
revenue
New bio-based
products/
biotechnology
Enhanced position of Minnesota in
rapidly emerging biotechnology
sector. New products, companies
and associated potential.
Jobs, output,
income and gov’t
revenue
Improved &
more cost
effective
healthcare
Enhanced public health, social
welfare and reduced
healthcare/medical costs for
business and society
Environmental
protection and
remediation
Enhanced environment, reduced
remediation costs, marketable
technologies and processes
Jobs, output,
income, gov’t
revenue,
reduced costs
Enhanced rural
and urban
quality of life
Maintain social fabric, reduce
poverty, sustain quality of life and
traditions
Reduced
negative costs
Productivity and
reduced
negative costs
Research Funds
• University of Minnesota Twin Cities generates $211,546 in
external research per faculty member.
• 65.2 new faculty projected to be required when University of
Minnesota Rochester at full operational level (2015)
• At $211,546 in research per faculty this equals $13,792,799 in
total projected research funds. Using 3% inflation, by 2015
research funding would be $276,020 per faculty member
($17,996,504.)
• Expect the majority of research funding will come from federal
and other major sources external to the State of Minnesota,
thereby providing a proportionate expansion in the state’s
economic base.
• The advanced bioscience and technology focus is likely to
result in higher volumes of research funding per faculty
member than experienced for the whole of the University of
Minnesota Twin Cities. Thus Impact Economics projects
the 65.2 faculty will generate between $18 to $22 million
in research ($276,000 to $337,400 per faculty member)
annually by 2015.
Licensing & Tech Transfer
• By 2015 the University of Minnesota Rochester would be expected
to generate between 8 and 10 invention disclosures per year,
resulting in between 1.5 and 2 issued patents.
• University expected to be managing a total of 21 to 26 accumulated
license agreements by 2015 with gross revenues to the University of
between $1.2 and $1.5 million.
• The disclosure and patents data represent just a single year (2015)
and there would have been further activity accumulating prior to this
(as the university begins its projected development in 2006).
• National data show that biomedical research lends itself to the
highest volume of IP generation, together with research in computer
science and associated data and communications equipment, These
strong areas of IP generation are a direct match for the intended
areas of University focus. Impact Economics thus believes that the
IP generation potential of the university will likely be higher than the
numbers quantified above.
Business Formation (Start-Ups)
•
•
•
Impact Economics projects that by 2015 the
University may generate between 8 and 13
start-up enterprises (that year) with direct
employment ranging from 240 to 380 jobs.
This depends, however, on the university being
structured in a manner conducive to innovation
and entrepreneurship.
The upside potential for job creation will be
higher for several reasons:
– The university will be an ongoing operation
so the above figures represent only an
annual snapshot.
– The above figures are for direct
employment and the university, its research
and spin-off companies will also generate
substantial indirect employment in the
economy via the multiplier effect.
– If one or two of the university-related startups achieves a high level of success (as
has occurred with some previous University
of Minnesota start-ups), then impacts will
likely be many orders of magnitude higher.
The Star Tribune newspaper
publishes a list of the 100
largest public companies in
Minnesota. Nineteen of these
100 companies were founded
by U of M IT alumni, including:
•ADC Telecommunications
ASV Inc.
August Technology
CNS Inc.
Ceridian
Compex Technologies
CyberOptics Corp.
Datalink Corp.
Digital River
Donaldson Company
Fastenal
Hawkins Inc.
MGI Pharma
MTS Systems
Medtronic
Pemstar
Pentair
Passis Medical
RTW Inc
Business Formation (Start-Ups)
• Start-up Employment, Output and
Indirect Impacts
– IMPLAN input/output
multipliers used for
projections
– Two sectors modeled relevant
to the Minnesota and
Rochester-area economies
that are likely to see spin-off
activity– Sector 302
“Electronic Computer
Manufacturing” and Sector
375 “Surgical and Medical
Instrument Manufacturing”
– For computer manufacturing
the employment multiplier
is 5.5 and the output multiplier
is 2.0. For medical devices
the employment multiplier
is 2.7, and the output
multiplier is 1.8
Top US Corporate Patent Classes are
Well Matched to the Planned Focus
of the University in Rochester
1 Surgical instruments
2 Biology of multi-cellular organisms
3 Surgery: light, thermal and
electronic applications
4 Surgery: application, storage and
collection
5 Prostheses
6 Computer and digital processing
7 Data processing
8 Special receptacle or package
9 Telephone communications
10 Communications: directive radio
wave
11 Chemistry: molecular biology and
microbiology
Leading Patent Generating Entities in Minnesota
Entity
Primary Industry
2000
2001
2002
2003
2004
Total
3M Innovative Products Company
Multiple (diversified), including health and biomedical
308
313
377
410
371
1779
Individually Owned Patents
Multiple
335
295
293
322
254
1499
IBM
Computing and related equipment
206
219
209
204
214
1052
Medtronic
Biomedical devices and equipment
131
101
103
109
105
549
Seagate Technology LLC
Computing and related equipment
18
89
121
122
129
479
Sci-Med Life Systems
Biomedical devices and equipment
80
71
75
85
68
379
Cardiac Pacemakers
Biomedical devices and equipment
41
65
86
93
74
359
Honeywell International
Automation and control equipment
11
69
74
81
124
359
ADC Telecommunications
Telecommunications infrastructure equipment
15
23
46
74
75
233
Micron Technology
Computing and related equipment
19
46
56
39
34
194
Ecolab
Commercial cleaning services
27
36
42
45
41
191
University of Minnesota
Multiple
43
36
37
36
38
190
Unisys
Computing and related equipment
20
23
26
28
53
150
Imation
Removable data storage products
27
32
26
30
32
147
General Mills
Food processing
25
32
29
15
20
121
Rosemount
Measurement instrumentation
17
13
22
43
21
116
Donaldson Company
Filtration and exhaust systems
23
25
21
21
15
105
Mayo Foundation
Biomedical research, products and devices
17
20
21
26
20
104
Augustine Medical
Biomedical devices and equipment
22
27
20
16
1
86
Honeywell Inc.
Multiple, electronics and controls
38
24
11
8
5
86
Eastman Kodak Company
Biomedical imaging equipment
13
8
27
12
22
82
Parker Hughes Institute
Biomedical, cancer drug development
3
18
27
16
12
76
Seagate Technology Inc.
Computing and related equipment
57
10
4
4
1
76
Cargill Inc.
Agricultural and food processing
18
14
15
10
9
66
LSI Logic Corporation
Computing and related equipment
13
6
10
11
17
57
Business Formation (Start-Ups)
Impact of Business Start-Ups Based on Employment Projections
Sectors = Computer Manufacturing and Medical Device Manufacturing
Direct Employment Projected at the 240 and 380 Job Levels
Employment (Jobs) Impact
Direct Employment
Generated
Employment Multiplier
Computer Mfg.
240
5.547461
1331.4
Medical Device Mfg.
240
2.673865
641.7
Computer Mfg.
380
5.547461
2108.0
Medical Device Mfg.
380
2.673865
1016.1
Sector
Total Employment
(Direct + Indirect +
Induced)
Output (Economic) Impact
Sector
MN Output
(millions)
MN
Employment
Output Per
Job
New Jobs
in Sector
New Output
in Sector
(millions)
Output
Multiplier
Total
Additional
Output
Computer
Mfg.
$5,735.509
8,136
$704,964
240
$169.189
2.040719
$345,267,321
Medical
Device Mfg.
$1,655.351
6,862
$241,234
240
$57.896
1.826062
$105,722,188
Computer
Mfg.
$5,735.509
8,136
$704,964
380
$267.883
2.040719
$546,673,259
Medical
Device Mfg.
$1,655.351
6,862
$241,234
380
$91.669
1.826062
$167,393,464
Research impacts have the potential to vary from those estimated.
Impact Economics estimates that the following impacts of the expanded
University of Minnesota Rochester are reasonable for 2015:
University research volume (annual)
Faculty conducting research
Support staff
$20 million
65
196
Invention disclosures (annual)
9+
Patents issued (annual)
4+
Start-up enterprises (annual)
6-8
Direct jobs in start-up enterprises (annual)
180+
Total jobs related to start-ups (including indirect)
600+
Total output related to start-ups (direct and indirect)
> $100
million
These are point in time impacts for a single year (2015). Economic impacts
would be cumulative, accruing year after year as additional research funds are
brought in, innovations made, and businesses started.
Impact of Higher Education
• Skilled human capital has been identified by
economists as the most important determinant of
economic growth in the 21st century economy.
• The key economic impact of higher education
comes via “productivity increases”.
• By gaining advanced education (especially in
technical and scientific disciplines) an
individual’s knowledge and skills are enhanced.
• When applied in the workplace this enables
higher levels of productivity to be achieved (in
addition to other key benefits such as higher
levels of creativity and innovation).
Impact of Higher Education
on Productivity
• Impact Economics used net present value
analysis to project the potential impact of
productivity increases in the Minnesota economy
likely to be driven by the University’s programs.
Based on the projected size of the University of
Minnesota Rochester, it is reasonable to expect
that the net present value of productivity gains to
the Minnesota economy generated by graduates
of the institution will likely be in the range of $3060 million per year of higher education gained
(for the total enrollment).
Private Returns to Education
• In addition to generating societal economic
returns, higher education also provides
economic benefits for individual
Minnesotans. These personal economic
benefits can be clearly seen through the
earnings differentials that increase as
higher education level increases, and in
the internal rate of return (IRR) on a
university education.
Median Earnings and Tax Payments by Level of Education, 2003.
$95,700
Professional Degree
$79,400
Doctorate Degree
$59,500
Master's Degree
$49,900
Bachelor's Degree
$37,600
Associate Degree
$35,700
Some College, No Degree
$30,800
High School Diploma
$21,600
Less Than HS Diploma
$0
Source: US Census Bureau, 2004
$20,000
$40,000
$60,000
$80,000 $100,000 $120,000
After-Tax Income
Taxes
Expected Lifetime Earnings Relative to High School Graduates,
by Education Level
4
3.36
3.5
Earnings Ratio
3
2.65
2.5
1.98
2
1.73
1.5
1
1
1.17
1.23
0.74
0.5
0
Less Than High School
Some
HS Diploma Diploma College, No
Degree
Associate
Degree
Bachelor's
Degree
Master's
Degree
Doctorate Professional
Degree
Degree
Private Returns to Minnesotans
of Higher Education Gained
• Impact Economics used US Census Bureau figures for average
lifetime earnings to estimate increased personal income potentials
for Minnesotans enrolling in University of Minnesota Rochester
programs.
• On a rolling year-to-year basis, it is found that those graduating from
the Rochester university programs would likely increase their
collective combined lifetime earnings by between $1 billion and $2
billion.
• National data for land grant universities indicate that 66% of
students from state universities will stay and work in the university’s
home state for a significant period of time – based on this it may be
assumed that the potential is there for between $0.66 billion and
$1.32 billion in personal lifetime earnings capture for Minnesotans
on an annual graduating class basis.
• Overall these data show that by enrolling in the new university
students will gain a two-times increase in their annual lifetime
earnings on average.
Outreach and Public Service
• Research shows education level to be
highly correlated with volunteerism and
public service.
• Land grant university extension operations
found to be especially relevant in 21st
century innovation driven economy.
Additional Impacts
• Increased retention of skilled high-school
graduates
• Attraction of increased volumes of visitors to the
community, coming to attend special events,
seminars and educational programs at the
university in its specialized subject areas
• Increasing the reputation and recognition of
Rochester as a hotbed of not only technology
development and application, but also advanced
education in bioscience and technology.
• Recruitment of personnel to technology-based
companies and institutions in Minnesota helped
by having a high quality advanced and
continuing education institution available.
Additional Impacts
• With a strong focus on biosciences and biomedical research,
combined with the local presence and collaboration of the Mayo
Clinic, it is likely that the university will be at the forefront of
advanced biomedical discoveries. Biomedical products have the
potential to prevent or cure diseases and sustain human health,
quality of life and worker productivity. Economic benefits result
from this in terms of healthcare costs prevented and prevention of
lost workforce productivity due to illness or injury.
• The university may also serve to help increase clinical care
volumes at Mayo. A significant portion of Mayo’s patient
population is attracted to the Clinic because of its research
leadership and to access experimental clinical protocols. The
university’s biosciences research, particularly in translational and
clinical research, may add to Rochester’s attractiveness for
patients especially since it is expected that Mayo, the U of M
Medical School and the Minnesota Partnership for Medical
Genomics will be active partners in the university’s research
programs.
Conclusions
• The expanded University of Minnesota Rochester will be a
positive investment for the state – providing between a three
and eight fold return on the states investment.
• The University will significantly strengthen and build
Minnesota’s position in the modern technology-driven 21st
Century economy.
• The University effectively leverages, and builds upon, the
existing strengths of the Minnesota and SE Minnesota
economies. It emphasizes pragmatic R&D aimed at
generating innovation-based economic development, and
will help to meet demand for skilled human capital in key
technology growth fields and strategic employment sectors.
• By focusing on advanced R&D and associated technological
and bioscience education the University will fill a unique
opportunity – working to complement other higher education
institutions in the state, rather than directly competing with
them.
Conclusions
•
Backward Linkage Impacts
– Construction of expanded facilities: 121 jobs and $98.3 million in total
economic impact (2.2 ROI)
– Operations: 2015 (full size) 261 direct jobs and 375 indirect jobs via
institutional spending. $90.4 million in annual spending impacts. (1.5 times
ROI on operating expenditures).
•
Forward Linkage Impacts
– Between $30 and $60 million (per year of higher education gained) for the
Minnesota Economy through net present value of productivity increases
realized through higher education gained at the university. (Added to
spending impacts this increases operational ROI to between 2.0 and 2.5)
– The University is estimated to attract between $18 million and $22 million
in external funds to support advanced research programs on campus.
($276,000 to $337,400 per faculty member).
– Research to produce innovations expected to generate between 8 and 13
start-up enterprises in 2015, with direct employment ranging from 240 to
380 jobs. Employment and output multiplier effects will be significant. At
the 240 direct jobs level between 642 and 1,331 total jobs would be
generated in Minnesota and between $105.7 and $345.3 million in total
economic output. This increases the operational ROI to between 3.7 and
8.1.
– Advanced education will provide graduates with a two-times increase in
their average annual lifetime earnings, equating to an increase of between
$0.66 billion and $1.32 billion in personal lifetime earnings capture for
Minnesotans occurring on an annual graduating class basis.
Conclusions
• It is the opinion of Impact Economics LP that the University
represents an eminently logical strategic move for Minnesota.
• The state is in competition with other technology-based
economies in the US and overseas and it is critically important
that Minnesota invest wisely to secure maximum returns from
its current and developing assets.
• Organizations such as the Mayo Clinic and IBM have major
operations in multiple states and they can choose to direct
their R&D and investment resources to where the best
opportunities present themselves. A substantial volume of
data support the fact that a research university is a critically
important catalyst for building sustainable R&D and innovationbased economies, and without the expansion of the University
of Minnesota Rochester it is likely that existing assets in
Rochester may be slowly lost to competing states and the
substantial potential for technology-based economic
development in SE Minnesota left unrealized.
What others say…
Research centers and institutions are
indisputably the most important factor in
incubating high-tech industries. A side
effect of the technical capability and
scientific research activities is the training
and education of the skilled labor that will
be critical to the expansion and
reinforcement of regional high-tech
industries.
R. DeVol (1999) “Americas High
Tech Economy”. The Milken
Institute
Few institutions have more to offer in propelling
economic development on both a national and local
basis that our nation’s colleges and universities.
They are the creators and disseminators of
knowledge and understanding that can help address
urban challenges. As leading institutions in their
communities, they are powerful economic drivers,
technology centers, employers, developers and
investors.
R. Rosan, 2002. “The Key Role of
Universities in Our Nation’s Economic
Growth and Urban Revitalization”.
University research is a powerful stimulus for economic development producing
measurable increases in GDP and employment. More importantly, university research
is shown to exert a dynamic and continuing impact on underlying productivity of the
economy, which carries forward into the future.
F. Martin and M. Trudeau. “The Economic Impact of University Research”.
What Others Say…
Premier universities are at the heart of just about every high-tech success story…
•Silicon Valley in California developed around the universities of Stanford and Berkeley. In
1996, more than half of the $100 billion income from the economy of Silicon Valley came
from companies started by Stanford graduates and faculty.
In 1997 the Bank of Boston Economics Department issued a report “MIT: The Impact of
Innovation” that described the economic benefits flowing from the university. The report
emphasized the creation of 14,000 jobs in Cambridge alone at companies founded by MIT
faculty and graduates. Throughout Massachusetts it was found that over 1,000 businesses
were started by MIT graduates employing more than 125,000.
Research Triangle Park (supported by Duke University, University of North Carolina, and
North Carolina State University is another success story. Today the park contains more than
100 companies employing more than 36,000. Major companies located in the park now
include Motorola, Nortel, DuPont, IBM, Harris Microelectronics and SAS.
The University of Texas is credited with contributing to the development of more then 600
high technology companies in the Austin area and the business corridor into Dallas.
Statewide Office of Budget and Institutional Research, Alaska. July 2002.
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