AMERICUS (July 11, 2012)--As the economy slowly regains footing, Georgia Southwestern State University (GSW) and the 34 other University System of Georgia (USG) institutions continue to serve as consistent economic engines across their respective regions with a total economic impact of $13.2 billion to the state. GSW’s economic impact on the area was estimated at $73.5 million in fiscal year 2011, which is 6 percent higher than the $69.1 million reported for FY 2010. Georgia Southwestern’s employment impact was 902 jobs for the community.
“It is always nice to be reminded that the University is a good citizen, makes a major contribution to the community, and takes seriously its commitment to the region that it serves,” said GSW President Kendall Blanchard, Ph.D. “The data make that clear. At the same time, we realize that our success is in many ways due to the strong support we get from the local community. Without that support I am confident our economic impact on the region would be much reduced.”
The results come from an annual study conducted by the Selig Center for Economic Growth in the University of Georgia’s Terry College of Business. In addition, the USG generated nearly 132,000 jobs – more than 3 percent of all the nonfarm jobs that exist in Georgia. What’s more, one job out of every 29 in Georgia is due to the University System.
While common wisdom might conclude that increased spending and jobs were the result of institutional actions, the study found just the opposite. Students accounted for the increased spending that generated more jobs off campus.
“Comparisons of the FY 2011 estimates to those for recent years show that our public college and universities really proved their economic worth during tough economic times” said study author Dr. Jeffrey M. Humphreys, director of the University of Georgia’s Selig Center for Economic Growth in the Terry College of Business.
Most of the $13.2 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 $9.5 billion, or 72 percent of the total output impact. The Selig Center analyzed data collected between July 1, 2010, and June 30, 2011, to calculate the University System’s FY2011 economic impact.
The study shows that between FY 2007 and FY 2011, total spending by all 35 institutions and their students rose by 30 percent, and the number of jobs that owe their existence to that spending rose by 24 percent – from 106,267 jobs to 131,990 jobs. The number of jobs at GSW increased from 793 to 902 during that same period – an increase of 12 percent.
“That job growth is quite impressive given that the state’s total employment declined by 7 percent during this period” said Humphreys. “Without exception, each college or university is an economic lynchpin of its host community.”
One striking finding is that university – or college-related spending – creates far more jobs off the campus than it does on the campus. On average, for each job that exists on campus 2 off-campus jobs exist because of spending related to the institution. Almost all of the off-campus jobs are in private sector businesses.
Georgia Tech in Atlanta and UGA had the largest impacts on their regional economies: $2.3 billion and 18,640 jobs at Georgia Tech and $2.1 billion and 20,458 jobs at UGA. Georgia State University in Atlanta had a $1.5 billion economic impact with 13,201 jobs.
The Selig Center’s research has its limitations – it neither quantifies the many long-term benefits that a higher-education institution imparts 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.
The complete report with data for all 35 institutions is available at: www.usg.edu/economic_development/documents/PS-USGImpact2011.pdf.
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