Augusta, GA –The Augusta area receives a substantial economic benefit—$1.2 billion—from the presence of Augusta State University (ASU) and the Medical College of Georgia (MCG), according to a new study released by the University System of Georgia (USG). ASU’s impact of over $193 million and MCG’s impact of $1 billion are part of a $12.7 billion economic impact of the 35 institutions in Georgia’s public university system on the state’s economy during Fiscal Year 2009. The institutions of the University System of Georgia generated nearly three percent of the state’s total jobs during that time.

The Selig Center for Economic Growth in the University of Georgia’s Terry College of Business analyzed data collected between July 1, 2008, and June 30, 2009, to calculate the University System’s FY2009 economic impact. This work updates similar studies conducted on behalf of The Intellectual Capital Partnership Program (ICAPP), an initiative of the Board of Regents’ Office of Economic Development. The previous report, based on FY2008 data, placed the USG’s economic impact at $12.1 billion. The first study in the series calculated the USG’s impact at $7.7 billion in FY1999. The latest $12.7 billion thus is a $5 billion increase since FY1999 – or a growth of 65 percent in the system’s economic impact on Georgia’s communities.

“A college or university improves the skills of its graduates, which increases their lifetime earnings. Local businesses benefit from easy access to a large pool of part-time and full-time workers,” said study author Dr. Jeffrey M. Humphreys, director of economic forecasting for the Selig Center. “In addition, for each job created on a campus, there are 1.6 jobs that exists off-campus because of spending related to the college or university.  In these ways, and many more, the University System plays a critical role in Georgia’s economic recovery.”

The study found that Georgia’s public higher education system generated 112,336 full- and part-time jobs–2.8 percent of all the jobs in the state in FY2009.  Most of those jobs–62 percent of them–are off-campus positions in the private or public sectors that exist because of the presence in the community of USG institutions. The remainder (38 percent) are jobs on campus.

In the Augusta region, the study found that ASU and MCG produce 11,176 jobs. Alone, ASU’s employment impact is 2,000 jobs.

Dr. Marc Miller, dean of the James M. Hull College of Business at Augusta State, said the findings by the Selig Center show the University System has a significant, positive economic impact on the state. “The state’s public colleges and universities generate jobs and salaries that sustain and expand a significant portion of Georgia’s economy,” he said.

Most of the $12.7 billion in total economic impact was due to 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 in FY2009.  (Initial spending by USG institutions equaled $8.4 billion, or 66 percent of the total.)  The remaining $4.3 billion (34 percent) in economic impact was created by re-spending – the multiplier effect of those dollars as they are spent again in the region. For every dollar of initial spending in a community by a University System institution, researchers found that, on average, an additional 51 cents was generated for the local economy hosting a college or university. Augusta State’s total output impact on the region:
Initial     Output       Value      Labor Income    Employment
Spending        Impact     Added Impact   Impact    Impact

Augusta State    137,791,633    193,345,474  116,850,387   80,068,085     2,000
______________________________________________________________________________________
Personal Services 40,477,981    77,128,977    55,820,990  48,153,319       926
Operating Expenses 18,106,212   22,060,168    7,325,599   4,526,069       115
Student Spending   79,207,440    94,156,329    53,703,798  27,388,697      959

“A major factor affecting the increases in the University System’s impact is the growth in the number of students attending the system’s public colleges and universities,” said Dr. Miller.

The University System’s largest institution–the University of Georgia (UGA) with 34,885 students–has the single greatest economic impact: $2.2 billion on the Athens-area economy, or 17 percent of the System’s total statewide economic impact.

The Selig Center’s research has its limitations–it neither quantifies the many long-term benefits that a higher-education institution and its outreach and service units impart 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 public University System is not only essential for Georgia’s economy, it is essential to enhancing the quality of life of Georgians—in both tangible and intangible ways, concludes Dr. Miller.
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