The Statewide Economic Impacts of the University of Missouri

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The Statewide Economic Impacts of the University
of Missouri

• Tom Johnson
• August 2007

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What is Economic Development?

• Temporal dimension
• Short-run versus Long-run
• Spatial dimension
• Where development occurs
• Quality dimension
• Stability, sustainability, and quality of life

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Short-run Versus Long-run
Short and Long run often confused Very different
causes and consequences

• Short Run
• Spending
• Consumption
• Consumer confidence
• Stability

• Long Run
• Saving
• Investment
• Productivity
• Change

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Spatial Dimension of Development
Quite distinct local, regional, state, national
and global causes of economic development These,
too, are often confused

• Local development
• Spending
• Inward investment
• Industry attraction
• In-migration
• Exports and local multipliers

• Global development
• Saving
• Investment
• Industry creation
• Population growth
• Specialization trade

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How does the University contribute to development?

• It contributes on all these dimensions and in
  all these ways.

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In the short-run the University

• Is a very large economic engine, employing and
  producing, selling and buying
• Contributes to the state and national income and
  production
• Is a major exporter, selling its education
  product nationally and globally

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In the local, regional and state economy the
University

• Contributes thousands of high quality, high
  paying jobs directly and indirectly.
• Indirectly pays taxes that provide public
  services to all residents.
• Generally offers continued growth and stability
  to the local economy
• Attracts new employers and residents

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Economic Impacts of UM Operations and Capital
Investments

• Because of its strong linkages with the state
  economy and its creation of good jobs and income
  UM has a strong multiplier effect
• Over 60,000 jobs created
• 2.4 Billion contributed to GDP
• 1.1 of the Missouri economy

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Economic Impacts including Students

• 62,000 students
• .6 Billion non-tuition expenditures annually
• Total Impacts
• 68,000 jobs
• 2.7 Billion contribution to GDP
• 1.3 of total economy
• Almost 4 times the state appropriations to the
  University

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But it is the long-run developmental impact that
is the universitys greatest contribution
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In the long run

• The only real long run investments are in
  knowledge and our ability to generate knowledge
• Knowledge is generated by research
• Knowledge resides in people
• Knowledge is made available through education and
  extension
• Knowledge results in productivity
• Knowledge comes from every discipline, from every
  art, and from every science

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In terms of quality of economic development the
University

• Prepares people for change
• Foments innovation
• Encourages diversity and mobility
• Enriches quality of life
• These are all part of the quality dimension of
  economic development

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What role do Universities play in economic
development?

• Universities are clusters of talent, tolerance
  and technology from which creativity emerges to
  lead to high quality regional, state and global
  economic development

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At the local level the University

• Attracts creative people and offers them a
  nurturing social and intellectual environment.
• It supports the local economy, providing direct
  and indirect jobs, income and tax base with which
  the community can provide amenities demanded by
  creative people.

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At the regional level the University

• Provides knowledge spillovers, technical
  assistance, trained labor force, innovative
  graduate students, research facilities, learning
  facilities, and much more.

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At the state level the University

• Provides regionally appropriate technology,
  educational programs, educated labor force, and
  cultural experiences for residents.
• Provides an in-state node in a global network of
  research and learning.
• A source of intercultural experience for
  residents which will prepare them for a global
  economy.

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• Economic development is more than
• Local jobs and income
• Rising research budgets
• Technological breakthroughs and patents
• or
• Growing numbers of graduates

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The Universitys contribution to economic
development is also

• Creative and entrepreneurial students and
  faculty.
• Students and faculty that are engaged in local,
  national, and international learning and creative
  networks.
• Graduates familiar with interdisciplinary
  research and learning.
• Graduates who are comfortable with change.
• A diverse, national and international student
  body, learning and creating together.

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• Every college, school, department, center,
  institute, and program at the University has a
  role to play in economic development.
• Thank you