The Economic and Societal Impact of The University of Minnesota

Transcription

1 June The Economic and Societal Impact of The University of Minnesota Tripp Umbach ~

2 TABLE OF CONTENTS EXECUTIVE REPORT INTRODUCTION PROJECT OVERVIEW METHODOLOGY EMPLOYED IN THE U OF M ECONOMIC IMPACT STUDY INTEGRAL TO THE STATE S ECONOMIC SUCCESS STRENGTHENING STATE AND LOCAL GOVERNMENT THROUGH TAX REVENUES THE U OF M GENERATES AND SUSTAINS JOBS U OF M RESEARCH BENEFITING THE STATE BEYOND OPERATIONS EDUCATING THE FUTURE WORKFORCE U OF M ALUMNI PLAY A VITAL ROLE IN THE MINNESOTA ECONOMY THE U OF M PROVIDES SUPPORT TO THE COMMUNITY U OF M OUTREACH AND EXTENSION U OF M LIBRARIES GENERATING ECONOMIC IMPACT AND JOBS THROUGHOUT THE ENTIRE STATE ECONOMIC DEVELOPMENT REGION 1: NORTHWEST REGIONAL PROFILE UNIVERSITY OF MINNESOTA, CROOKSTON (UMC) ECONOMIC IMPACT ON NORTHWEST REGION EMPLOYMENT IMPACT ON NORTHWEST REGION GOVERNMENT REVENUE IMPACT ON NORTHWEST REGION ECONOMIC DEVELOPMENT REGION 3: ARROWHEAD REGION REGIONAL PROFILE UNIVERSITY OF MINNESOTA, DULUTH (UMD) ECONOMIC IMPACT ON ARROWHEAD REGION EMPLOYMENT IMPACT ON ARROWHEAD REGION GOVERNMENT REVENUE IMPACT ON ARROWHEAD REGION ECONOMIC DEVELOPMENT REGION 4: WEST CENTRAL REGION REGIONAL PROFILE UNIVERSITY OF MINNESOTA, MORRIS (UMM) ECONOMIC IMPACT ON WEST CENTRAL REGION EMPLOYMENT IMPACT ON WEST CENTRAL REGION GOVERNMENT REVENUE IMPACT ON WEST CENTRAL REGION ECONOMIC DEVELOPMENT REGION 10: SOUTHEAST REGION REGIONAL PROFILE UNIVERSITY OF MINNESOTA ROCHESTER (UMR) ECONOMIC IMPACT ON SOUTHEAST REGION EMPLOYMENT IMPACT ON SOUTHEAST REGION GOVERNMENT REVENUE IMPACT ON SOUTHEAST REGION ii THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA

3 ECONOMIC DEVELOPMENT REGION 11: 7 COUNTY TWIN CITIES REGIONAL PROFILE UNIVERSITY OF MINNESOTA, TWIN CITIES (UMTC) ECONOMIC IMPACT ON 7- COUNTY TWIN CITIES REGION EMPLOYMENT IMPACT ON 7- COUNTY TWIN CITIES REGION GOVERNMENT REVENUE IMPACT ON 7- COUNTY TWIN CITIES REGION APPENDIX A: DEFINITION OF TERMS APPENDIX B: ECONOMIC IMPACT BY MINNESOTA DEVELOPMENT REGION APPENDIX C: METHODOLOGY APPENDIX D: FAQS REGARDING ECONOMIC IMPACT ASSESSMENT THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA iii

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5 Executive Report Introduction The University of Minnesota is a world- class research university whose impact directly or indirectly benefits every individual and community in the state. Founded in 1851, the University is the state s only land- grant university and its primary research institution, with five campuses, numerous research and outreach centers, and significant community and business collaborations statewide. Internationally engaged, the University touches every continent, partnering with countries such as China and India to make sure the state has the knowledge and ideas it needs to be competitive in the global economy. From the Crookston campus on the edge of the northern prairie to the newest campus less than 50 miles from the state s southern border in Rochester, the University serves Minnesota s families and businesses while contributing knowledge and innovations to help build a healthier, sustainable world. The U of M has 28 colleges and schools on five campuses and offers over 9,500 undergraduate courses each semester. The U of M confers more than 14,400 bachelors, masters, doctoral and professional degrees annually. The University is a hub for creativity, research, artistic expression, critical thinking, and debate about the world s most pressing issues such as climate change, poverty, and health care. Through its mission emphasizing education, research, and public engagement, the University of Minnesota is an important part of the fiscal health and well- being of Minnesota communities and the state of Minnesota. The University of Minnesota s daily operations provide ongoing financial benefits to the state s economy. The University significantly impacts the statewide economy through expenditures, government revenues, and the employment and personal income of residents. Beyond these financial benefits, the U of M is preparing the workforce of the future and creating a stronger Minnesota. The results presented in the University of Minnesota economic impact study are generated on an annual basis. The economic impact in future years can either be higher or lower based on the number of students, capital expansion, increases in external research and the level of state appropriations. It is important to note that the economic and employment impacts reported in this report represent the fresh dollar impact of the U of M. Stated simply, if the U of M were not located in the state, $8.6 billion in impact and more than 79,497 jobs would not be generated.

6 Project Overview In December 2010, Tripp Umbach was retained by the University of Minnesota to measure the economic, employment and government revenue impacts of operations and research of all of its campuses and affiliates. The goals of the University of Minnesota economic impact study included the following: To quantify the economic and employment impacts of the University of Minnesota system on the state of Minnesota. To quantify the economic and employment impacts of the University of Minnesota campuses and statewide resources on each region of the state. To better articulate the benefits of a major research institution and its partnership with the community, citizens and the state. Methodology Employed in the U of M Economic Impact Study This economic impact analysis measures the effect of direct and indirect/induced business volume and government revenue impacts for all of the U of M s operations throughout the state of Minnesota. The methodology employed in the calculation of these impacts is IMPLAN. 1 Primary data utilized to conduct the analysis was collected from the University of Minnesota Study Overview Study Period: Fiscal Year (FY 09-10) This Study Includes: University of Minnesota Twin Cities, University of Minnesota Crookston, University of Minnesota Duluth, University of Minnesota Morris, University of Minnesota Rochester, Research and Outreach Centers and Regional Extension Offices Study Geography: State of Minnesota, Economic Development Zones (15 zones throughout the state) Methodology: IMPLAN, 2009 Data University of Minnesota. Data included: capital expenditures, operational expenditures, jobs, payroll and benefits, and taxes. The approach taken on this study was decidedly conservative. However, the impact findings compare favorably to other top research universities in the country. Economic impact begins when an organization spends money. Economic impact studies measure the direct economic impact of an organization s spending plus additional indirect 1 Minnesota IMPLAN Group, Inc. (MIG) is the corporation that is responsible for the production of IMPLAN (IMpact analysis for PLANning) data and software. IMPLAN is a micro- computer- based, input- output modeling system. With IMPLAN, one can estimate Input- Output models of up to 528 sectors for any region consisting of one or more counties. IMPLAN includes procedures for generating multipliers and estimating impacts by applying final demand changes to the model. 2 THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA TH

7 and induced spending in the economy as a result of direct spending. Economic impact has nothing to do with dollars collected by institutions. Total economic impact measures the dollars that are generated within Minnesota due to the presence of the University of Minnesota. This includes not only spending on goods and services with a variety of vendors within the state, and the spending of its staff and visitors, but also the business volume generated by businesses within Minnesota that benefit from the U of M s spending. It is important to remember that not all dollars spent by a university remain in its home state. Dollars that leak out of the state in the form of purchases from out- of- state vendors are not included in the university's economic impact on the state. The multipliers utilized in this study are derived from the IMPLAN software. Key economic impact findings presented within the summary include the total current (FY 09-10) economic, employment, and state and local government revenue impact of the University of Minnesota s operations. Integral to the State s Economic Success The U of M is an integral piece of the state s economic success, and operations of the U of M directly or indirectly impact nearly every resident of Minnesota. The U of M generates $8.6 billion annually in overall economic impact. The University of Minnesota affects business volume in Minnesota in two ways: 1. Direct expenditures for goods and services by the University, its employees, students, and visitors. This spending supports local businesses, which in turn employ local individuals to sell the goods and provide the services that University constituencies need. 2. Indirect or induced spending within the state of Minnesota. The businesses and individuals that receive direct payments re- spend this money within the state, thus creating the need for even more jobs. As a result of expenditures on goods and services by the University, its employees, its students and its visitors, the overall economic impact of all the U of M s operations on the state of Minnesota in 2010 was $8.6 billion ($4.1 billion direct impact and $4.5 billion indirect and induced). (See Figure 1.) THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA 3

8 Figure 1: University of Minnesota Economic Impact (in billions) $8.6 billion $4.1 billion $4.5 billion Direct Indirect/Induced Total Table 1 below shows the top industry sectors impacted by the U of M s operations in terms of their total economic impact. Sector Description Table 1. Top Ten Industry Sectors for Economic Impact Total Economic Impact 392 Colleges & universities $2,638,500, Private hospitals $1,309,996, Real estate establishments $536,440, Imputed rental activity for owner- occupied dwellings $321,786, Construct new nonresidential commercial and health care structures $290,402, Wholesale trade businesses $223,835, Food services and drinking places $175,745, Insurance carriers $164,103, Offices of physicians, dentists, and other health practitioners $157,813, Electric power generation, transmission, and distribution $138,523,540 In analyzing the impact of the U of M further, the operations of the U of M represents roughly 53% of the overall impact, research accounts for 17% of the total Impact, and the University of Minnesota Medical Center, Fairview and University of Minnesota Physicians represents approximately 30% of the impact. The U of M represents 3.8% of the total Minnesota economy. 4 TH THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA

9 In FY 09-10, the University of Minnesota received $651.3 million in appropriations from the state of Minnesota. For every $1.00 invested by the State in the University of Minnesota, $13.20 is generated in the state s economy. Strengthening State and Local Government through Tax Revenues It is a common misperception that public universities do not generate tax revenue. State and local government revenues attributable to the presence of the University of Minnesota totaled $512.3 million in FY ($136.0 million direct and $376.3 million indirect/induced). State and local governments throughout Minnesota all received tax revenues that were University- related. Through its local spending as well as direct and indirect support of jobs, the presence of the University stabilizes and strengthens the local and statewide tax base. The U of M is an integral part of the of state s economy - - generating revenue, jobs and spending. The U of M Generates and Sustains Jobs The University of Minnesota supported 79,497 jobs in the state of Minnesota. One out of 43 jobs in the state is attributable to the U of M. These jobs include not only direct employment by the University but also indirect and induced jobs created for supply and equipment vendors, contractors and laborers for the construction and renovation of university facilities, and jobs created in the community at hotels, restaurants and retail stores in support of the U of M s workforce and its visitors. THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA 5

10 The University directly employed 42,319 full- time faculty, staff and students during FY The breakdown of this direct employment number is as follows: Faculty and Staff 19,157 jobs Graduate/Post- Doc/Residents jobs Fellows and Students 8,866 jobs UMMC- Fairview/UMP 8,017 jobs The University of Minnesota supports thousands of jobs annually statewide in virtually every sector of the Minnesota economy, such as construction, business and professional services, restaurants and hotels, information technology, security, and temporary employment companies. These indirect jobs (37,178 jobs) are in support of the 42,319 Minnesota residents who are employed directly by the University. (See Figure 2.) Figure 2: University of Minnesota Employment Impact (in jobs) 79,497 jobs 42,319 jobs 37,178 jobs Direct Indirect/Induced Total Table 2 shows the top ten industry sectors impact by the U of M s operations in terms of employment. Sector 6 TH Table 2. Top Ten Industry Sectors for Employment Impact Description THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA Total Employment Impact 392 Colleges & universities 31,191 jobs 397 Private hospitals 8,717 jobs 360 Real estate establishments 3,715 jobs 413 Food services and drinking places 3,249 jobs 34 Construct new nonresidential commercial and health care structures 2,566 jobs 398 Nursing and residential care facilities 1,893 jobs 394 Offices of physicians, dentists, and other health practitioners 1,100 jobs

11 Sector Table 2. Top Ten Industry Sectors for Employment Impact Description Total Employment Impact 319 Wholesale trade businesses 1,079 jobs 382 Employment services 949 jobs 329 Retail Stores - General merchandise 812 jobs To put this in perspective, the U of M is the fifth largest employer in the state of Minnesota following the state of Minnesota, Mayo Clinic, U.S. Federal Government, and Target 2. U of M Research In 2010, the University of Minnesota was awarded $823.0 million in sponsored research funds. These research dollars enter the Minnesota economy from a wide variety of agencies including the National Science Foundation ($97.2 million) and the National Institutes of Health ($379.6 million). The amount of sponsored research funding received by the U of M is 2 According to the Twin Cities Business Magazine (2009), the University of Minnesota is the 5 th largest employer in the state (25,976 jobs). Seventh on this list is Fairview Health Services (22,000 jobs). If the Twin Cities Business Magazine combined the U of M and the UMMC- Fairview portion as we have in this study, then the U of M and its affiliates would move to the second largest employer in the state. THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA 7

12 impressive and compares favorably to its peers. This research funding is received by a wide variety of departments and colleges throughout the U of M system. Sponsored research dollars include of course the health sciences, earning $449.2 million (of which the Medical School totals $231.4 million), the College of Science and Engineering ($146 million), the College of Food, Agricultural & Natural Resource Sciences ($74.8 million), College of Education & Human Development ($26.8 million), College of Liberal Arts ($16.7 million) and Coordinate Campuses of Morris, Rochester, Duluth and Crookston ($19.2 million). Research occurs throughout the University in numerous disciplines, departments and campus. One specific example of the power of the U of M s research enterprise can be found at the University of Minnesota Academic Health Center (AHC), where biomedical corridors of discovery transform new knowledge into better health. Success in biomedical research today demands collaboration. Individual disciplines have made tremendous progress in the past. But the future is where disciplines meet where medicine meets physics, where public health meets molecular biology, where neuroscience meets engineering where scientists from diverse disciplines work together to accomplish what none could alone. To increase opportunities for such collaborations, the U of M is supporting virtual corridors of discovery. These corridors speed translation from concept to cure. They create multidisciplinary pathways for traveling from idea and understanding, through testing and refining, to better treatments and cures. Along the way, AHC researchers receive assistance from specialized centers and experts that provide essential research support. Research support corridors include engineering, materials science, chemistry, biology, physics, mathematics, and psychology, as well as the Center for Magnetic Resonance Research, the Stem Cell Institute, the Institute for Translational Genetics, the Center for Molecular and Cellular Therapeutics, and Health Informatics. AHC corridors also receive support services, including grant application preparation, financial management, clinical testing, and commercialization. Service platforms include the Center for Translational Therapeutics and the Institute for Clinical and Translational Research. Support for technology transfer is also key. Partners in this process include the BioBusiness Alliance, the Department of Employment and Economic Development, LifeScience Alley, and the Minnesota Partnership in Biotechnology and Medical Genomics, or U- Mayo partnership. The impact of research spending is already included in the $8.6 billion economic impact of the U of M. It is critical to note that the research dollars that the U of M brings into the state are fresh dollars for the state of Minnesota meaning that because of the quality of its faculty and strength of its programs, the U of M is attracting out- of- state dollars to Minnesota. The U of M competes nationally for these dollars against its peer institutions to fund the research 8 TH THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA

13 enterprise. The University of Minnesota received an impressive $823 million in sponsored research funds in FY10, a tribute to the exceptional quality of their diverse and innovative faculty, students, staff, and the power of the U of M intellectual community The U of M s $823 million dollars in sponsored research translates into a significant economic impact. As a result of its strong research programs, the economic impact of the U of M research enterprise is $1.5 billion ($0.7 billion direct impact and $0.8 billion indirect impact). As the U of M s research expenditures grow as a result of increased research funding, the impact of research spending will also continue to grow. (See Figure 3.) Figure 3: U of M Research Impact (in billions) $0.7 billion $0.8 billion $1.5 billion Direct Indirect/Induced Total Table 3 below shows the top ten industry sectors impacted by U of M research in terms of economic impact. Table 3. Top Ten Industry Sectors for Research Economic Impact Sector Description Total Economic Impact 376 Scientific research and development services $662,097, Imputed rental activity for owner- occupied dwellings $59,088, Real estate establishments $55,918, Wholesale trade businesses $34,025, Monetary authorities and depository credit $32,399,764 intermediation 413 Food services and drinking places $30,796, Private hospitals $30,393, Insurance carriers $28,721, Offices of physicians, dentists, and other health $28,283,912 practitioners 367 Legal services $18,912,574 THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA 9

14 The University s research operations make tangible and quantifiable economic contributions. Along with creating jobs for research staff and support personnel, U of M scientists are contributing to new product development and technology commercialization. Knowledge and technology transfers have helped to start commercial ventures that promote entrepreneurship, economic development, and job creation. U of M Research Creates High- Quality Jobs In FY 09-10, the operational and capital expenditures that the University made for sponsored research and other sponsored programs, supported 16,193 jobs. These research employment numbers represent 20% of the total U of M job impact. These jobs include not only direct employment by the University of research professionals, but also indirect jobs created for supply and equipment vendors, contractors and laborers for the construction and renovation of laboratory facilities, administrators and managers who support the research infrastructure, and jobs created in the community by the disposable income of the scientific workforce. Table 4 shows the top ten industry sectors impacted by U of M Research in terms of employment. Sector Table 4: Top Ten Industry Sectors for Research Employment Impact Description Total Employment Impact 376 Scientific research and development services 9,806 jobs 413 Food services and drinking places 568 jobs 360 Real estate establishments 387 jobs 388 Services to buildings and dwellings 307 jobs 382 Employment services 279 jobs 397 Private hospitals 215 jobs 394 Offices of physicians, dentists, and other health practitioners 197 jobs 398 Nursing and residential care facilities 167 jobs 319 Wholesale trade businesses 164 jobs 329 Retail Stores - General merchandise 147 jobs If the University can maintain its strong faculty base, it will continue to attract, and consequently spend, increasingly higher levels of research dollars, and the number of jobs supported will continue to grow. With continued high levels of research funding and 10 THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA

15 consequent expenditures, the University will remain a source of support for thousands of local jobs based on its research funding alone. Not included in this the economic impact of the U of M Research impact is the impact of commercialization activities such as patents, licensing, royalties and business spin- off companies. Over the past five years, discoveries and inventions by the U of M brought an additional $390 million into the state of Minnesota. Benefiting the State Beyond Operations The U of M s total impact on the state of Minnesota goes beyond its annual operational impacts. The economic impact study often only captures the impact that can be assigned an actual number, but the value and impact of the U of M goes far beyond its annual $8.6 billion in impact. The U of M educates children, citizens, future employees, leaders and innovators. The U of M provides access to expert faculty, arts and cultural activities, top- tier medical care and education, research libraries and the future workforce. It is challenging to assign a dollar amount to the outreach and community activities of a major research university such as the U of M but on a daily basis the life of Minnesotans is enhanced by its presence. Educating the Future Workforce The U of M educates the workforce that Minnesota needs to succeed in the 21st century. The 14,000 students who graduate every year from the U of M are essential to the state's human capital and workforce needs. Last year the University of MN conferred 14,478 degrees. About 65 percent of those graduates will stay in Minnesota and contribute to the state economy. Their contributions are critically important to the economic vitality of the state. Of the University's more than 299,846 graduates since 1980, 195,150 reside in the state. The U of M awards 90% of all STEM doctoral degrees, 85% of all MD degrees, and 100% of all dentistry, pharmacy, and veterinary medicine degrees. The U of M is a talent magnet, attracting top students in a wide range of disciplines many of whom stay in MN upon graduation. U of M Alumni Play a Vital Role in the Minnesota Economy The U of M Alumni are integral to the Minnesota economy. According to alumni surveys conducted in , U of M alumni have formed nearly 10,000 companies in Minnesota. Nearly 25% of these company founders moved to Minnesota to attend the U of M. These companies employed approximately 500,000 people annually and generated some $100 billion in annual revenues in the state. By educating students, the U of M adds to the talent pool of human capital in the state of Minnesota. The students are thus able to earn more in the job market because they are more THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA 11

16 valuable and productive. Based on data on median annual earnings for University graduates in 2008 from the U.S. Department of Commerce s Bureau of Economic Analysis, a bachelor s degree earned at a university increases a graduate's salary compared with a high school diploma by an average of about $20,748 a year (from $32,552 to $53,300), while a graduate degree earned at a university increases a graduate's salary compared to a bachelor's degree by an average of about $15,756 a year (from $53,300 to $69,056). If the average individual s work life is about 40 years, the benefits of finishing college over only finishing high school are about $829,900 more than they would have made if they did not get a bachelor s degree. Since the University of Minnesota awarded 8,957 baccalaureate degrees in academic year , that amounts to the creation of $7.3 billion of future value (only counting the graduates from a single year). Even if the total is adjusted by 30% to allow for the forgone income while attending the University, future periods of unemployment, time out of the labor force for child rearing, and other life events, the value creation is still nearly $5.2 billion every year. A similar analysis applied to the 5,521 advanced degrees for academic year indicates another $3.7 billion of value created. So the University is creating $8.9 billion ($5.2 billion + $3.7 billion) of incremental lifetime earnings for members of each graduating class. This impact is above and beyond the impact of the University s operations. (See Figure 4.) Figure 4: Economic Impact of Earnings of U of M Alumni (in billions) $8.9 billion $5.2 billion Undergraduate Impact $3.7 billion Graduate/ Professional Impact Total Impact of Alumni To calculate the economic impact of the University s alumni on a continuing basis in the state of Minnesota, Tripp Umbach assembled figures on the distribution of the alumni for whom the University has current address information and used this distribution for the body of nearly 200,000 alumni who have graduated in the past thirty years and are living in the state of Minnesota. Based on an average of $8,532 3 in additional salary per graduate of the University of Minnesota, it is estimated that University of Minnesota working graduates since 1980 support $11.9 billion in additional income in the state s economy annually (assuming 3 This number is the average amount of additional income that a graduate of a school with a similar profile to the University of MN earns over the average college graduate. It is based upon an average of the studies that Tripp Umbach has completed for peer universities in which primary survey analysis was conducted. 12 THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA

17 that 70% are in the workforce). Extra earning power from University of Minnesota alumni since 1980 who are working in the state makes up 1 in every $19 in the state s economy. The U of M Provides Support to the Community Tripp Umbach estimates that the University of Minnesota staff, faculty, physicians and students generate more than $204.0 million annually in charitable donations, volunteer services, and provision of free care. These benefits (in addition to the $8.6 billion annual impact) include the following: $4.9 Million in free care provided by UMMC- Fairview and UM Physicians $71.3 Million donated to local charitable organizations by U of M Faculty, Staff and Students 4 Nearly $127.8 Million in value of volunteer time provided to area communities by U of M Students, Faculty and Staff U of M Outreach and Extension Strongly committed to engaged research and teaching as integral to excellence as well as impact, the University of Minnesota has been recognized as a national model of the vitally engaged university and vigorously shares its knowledge, the fruits of its discoveries, and the talents of its faculty, staff, and students with the state it exists to serve. University extension programs, research and outreach centers, and collaborations across the state help businesses come into being, build bridges between cultures, tackle environmental and urban challenges, guide Minnesota families toward healthier lives, and address complex issues that are important to the state, region, and the world. University of Minnesota Extension has been a particularly high- profile presence across the state. With regional and county offices in every corner of Minnesota, Extension is a front door to the University, delivering on the University s land- grant mission and mandate to take knowledge and expertise from the University directly into communities to address pressing issues. Extension s network of educators researchers partner with more than 35,000 volunteers, giving citizens throughout the state a role and a voice in the University s research 4 Source: Tripp Umbach has conducted survey research where students (primary), staff and faculty (secondary) provide estimates on spending patterns, including information on the number of volunteer hours and charitable donations in which they provide. Tripp Umbach used a conservative assumption of $20.10 per hour to calculate the value of volunteer services. This amount was originally calculated independently by the Points of Light Foundation. THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA 13

18 and outreach priorities. Working with hundreds of local, regional, state, and national partners, Extension addresses the most pressing issues facing Minnesota in the areas of: agriculture, food, and environment youth development family development and well- being community vitality Extension programs and initiatives maintain a vital University presence throughout the state and make possible programs that would not otherwise exist programs integral to ensuring the well- being of rural and urban communities, the health of landscapes and people, and the strength of regional economies. This work is carried out with marked efficiency: U of M Extension leads the nation in collaborating with other states, incorporates volunteer and in- kind support worth over $28 million annually, has raised over $1 million in gifts, and has consistently achieved its goal of keeping administrative costs to 10% of the annual budget. The economic impact of U of M Extension is $128.5 million and 1,223 jobs. The economic impact just skims the surface of the full impact of the University s 87 Extension County Offices, 15 Regional Extension Offices, 7 Research and Outreach Centers and does not take into account the impact of many other significant engagement initiatives and partnerships benefiting businesses and communities statewide. U of M Libraries With nearly 7 million total volumes, more than 90,000 total serial subscriptions, and over 129,000 reference questions answered annually, the U of M libraries are an integral piece of the U of M s educational and research missions. The libraries support not only the research of students, staff and faculty, but also to the broader business community throughout the state of Minnesota. Through programs like InfoNOW a fee- based document delivery and research service the research needs of legal, health care, technology, consulting, and numerous other fields can be met. Its interlibrary loan program ranks first of 123 North American research libraries for loans to other libraries. The importance of having a strong research library cannot be underestimated. Targeted investments in the University Libraries since the start of Strategic Positioning have moved its national rank in the Association of Research Libraries ranking for total material expenditures from 24th to 14th. University cumulative investments of over $26 million between and especially enhanced the University s collections. Access to digital collections was increased through newly created customized web portals to library resources and the Digital Conservancy, a repository for University 14 THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA

19 and faculty publications, with opportunities for use as an open access resource. The Digital Conservancy also provides a permanent archive of graduate student dissertations and theses, offering global access that bolsters the scholarly impact of graduate and professional student s work. Support has been increased for interdisciplinary and translational research by expanding the expertise and infrastructure within the University Libraries to support research collaboration, data management, and impact assessment. Strategic Positioning investments in the collections of the University Libraries resulted in significant acquisitions of digital content with emphasis on research journals and primary source material, enabling ready access and types of research not heretofore possible. In addition, University Libraries is partnering with Google through the Committee on Institutional Cooperation to digitize over one million volumes from campus collections, which will allow global access to distinctive resources held at the University. Access to these collections will assist graduate and professional students in their research and education. Discipline- specific web portals developed by the Libraries and tailored to the needs of graduate and professional student communities provide customized access to collections, services, and tools. New educational programs at the University Libraries target the development of information discovery and management skills among graduate and professional students, including programs to support evidence- based inquiry in the health sciences, knowledge management systems, and data management practices in the sciences. New workshops at the Libraries introduce graduate students to grant opportunities and resources in their field and have drawn national attention. Generating Economic Impact and Jobs Throughout the Entire State The University of Minnesota has an economic impact in every region of the state. Economic impact analysis was completed on all economic development regions in the state based upon expenditures and employment in each of the regions. This section seeks to highlight the regions in which the U of M s presence is anchored by a campus. Within each of these regions, the critical role of the campus in sustaining and growing the respective regional economy is amplified by the significant contributions of research and outreach centers, extension offices, Area Health Education Centers (AHECs), and many additional collaborations and partnerships. Each U of M entity provides a unique set of services and assistance to meet the needs of students, faculty, staff and community. A summary of all the regions and the impact of the U of M is presented in Appendix B. THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA 15

20 Economic Development Region 1: Northwest Regional Profile The Northwest Region includes the following University of Minnesota entities in Polk County: Northwest Minnesota AHEC, NW Research and Outreach Center, Regional Extension Office, University of Minnesota, Crookston; and in Roseau County: Regional Extension Office. These U of M entities are vital to the economic health and well being of the Northwest region. The activities of the research and outreach centers, regional extension offices and area health education centers bring the U of M expertise and knowledge to Northwest Minnesota. EDR 1: Northwest Regional Demographics ü Total Regional Population: 84,730 ü Total Regional Households: 35,607 ü Total Regional Employment: 53,271 ü Gross Regional Product: $3.2 Billion Counties in Economic Development Region 1 Kittson, Marshall, Norman, Pennington, Polk, Red Lake and Roseau Counties University of Minnesota, Crookston (UMC) Integral to the University's statewide land- grant mission, the University of Minnesota, Crookston (UMC) proudly carries on a tradition of more than 100 years of educational excellence in northwestern Minnesota. A baccalaureate- level institution since 1993, UMC is a regional hub for high- quality applied research, teaching, and service benefiting northwestern Minnesota s agricultural and manufacturing economy and with potential application across the state. UMC enrolls more than 1,450 degree- seeking students (nearly 60% first- generation college students) and provides the region with career- oriented degree programs strong in technology applications, applied and experiential learning, undergraduate research, and global and multicultural perspectives. 16 THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA

21 With an emphasis on providing students with robust applied- learning opportunities and giving them a technological edge, the campus is widely known for producing excellent graduates to meet regional workforce needs in agriculture and natural resources, business, information technology, and other fields. UMC scholarship generates vital new knowledge on subjects important to the region, state, and beyond on regional rural development and on topics such as cost- effective nutrition for dairy cows, prairie conservation, economically feasible farm- scale bio- fuels, and renewable energy. The Crookston campus serves an important component of the regional economy, leveraging expertise and resources to spur innovation and entrepreneurship. The campus also is home to a variety of partner organizations and initiatives addressing economic development, sustainability, rural health and other issues in one of the state s most critical agricultural regions. Continuing to distinguish itself as a strong educational institution in the Midwest and the nation, UMC is consistently ranked one of the four best Midwest public colleges by U.S. News and World Report as well as a top Best Midwestern College by The Princeton Review. As a four- year, public university with an enrollment of 1,300 students, the University of Minnesota, Crookston (UMC) proudly carries on a tradition of a century of educational service to Northwestern Minnesota. Since its establishment as an institution of higher learning in 1966 and its transition to offering baccalaureate degree programs in 1993, UMC equips all students and faculty with laptop computers; provides individual attention that leads to success; and offers a hands- on approach that puts students ahead of the competition. Integral to the University's statewide land- grant mission, UMC provides applied, career- oriented learning programs and connects its teaching, research, and outreach to local, county, and regional economic development agencies in support of the rural economy. UMC is an integral part of the Northwest region. THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA 17

22 Economic Impact on Northwest Region The economic impact of the U of M s operations in the region total $34.3 million ($25.1 direct). Analysis shows that 1 out of 93 dollars in the regional economy is supported by the U of M (see Figure 5). Table 5 shows the top ten industry sectors impacted in the Northwest Region by U of M operations. Figure 5: U of M Economic Impact on Northwest Region (in millions) $25.1 million $34.3 million $9.2 million Direct Indirect/Induced Total Table 5. Top Ten Industry Sectors for Economic Impact in the Northwest Region Sector Description Total Economic Impact 392 Colleges & universities $19,703, Construct new nonresidential commercial and healthcare structures $4,216, Imputed rental activity for owner- occupied dwellings $1,642, Private hospitals $982, Food services and drinking places $960, Wholesale trade businesses $752, Monetary authorities and depository credit intermediation $492, Offices of physicians, dentists, and other health practitioners $477, Other state and local government enterprises $349, Telecommunications $328, THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA

23 Employment Impact on Northwest Region The total employment impact of U of M s entities in the Northwest region is 531 jobs (379 direct jobs). One out of 100 jobs in the region exists because of the U of M (see Figure 6). Figure 6: U of M Employment Impact on Northwest Region (in jobs) 379 jobs 152 jobs 531 jobs Direct Indirect/Induced Total Table 6 below shows the top ten industry sectors for employment impacted in the Northwest Region by the U of M. Table 6: Top Ten Industry Sectors for Employment in the Northwest Region Sector Description Total Employment Impact 392 Colleges & universities 380 jobs 34 Construct new nonresidential commercial and health care structures 43 jobs 413 Food services and drinking places 22 jobs 397 Private hospitals 8 jobs 319 Wholesale trade businesses 6 jobs 398 Nursing and residential care facilities 6 jobs 394 Offices of physicians, dentists, and other health practitioners 4 jobs 324 Retail Stores - Food and beverage 4 jobs 425 Civic, social, professional, and similar organizations 4 jobs 400 Individual and family services 3 jobs Government Revenue Impact on Northwest Region U of M s operations in the Northwest region generate $1.2 Million per year in indirect state and local tax revenue. THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA 19

24 Economic Development Region 3: Arrowhead Region Regional Profile The Arrowhead Region includes the following University of Minnesota entities in: Carlton County: Cloquet Forestry Center, Regional Extension Office; Itasca County: Coleraine Minerals Research Lab, North Central Research and Outreach Center, Regional Extension Office; and St. Louis County: University of Minnesota Duluth, Natural Resources Research Institute, Northeast Minnesota AHEC (Area Health Education Center), and Soudan Underground Laboratory. These U of M entities play a critical role in the regional economy. The activities of the research and outreach centers, regional extension offices and area health education centers bring U of M expertise and knowledge to the Arrowhead Region of Minnesota. EDR 3: Arrowhead Regional Demographics ü Total Regional Population: 321,677 ü Total Regional Households: 141,340 ü Total Regional Employment: 176,802 ü Gross Regional Product: $12.1 Billion Counties in Economic Development Region 3 Aitkin, Carlton, Cook, Itasca, Koochiching, Lake, and St. Louis Counties University of Minnesota, Duluth (UMD) A comprehensive regional university, the University of Minnesota, Duluth (UMD) has served northern Minnesota, the state, and the nation for 113 years. As the anchor higher education institution in northeastern Minnesota, UMD emphasizes high- quality programs central to the University of Minnesota mission and serves as a catalyst for the economic development and vitality of the region. 20 THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA

25 Combining the advantages of both a research- oriented institution and a small liberal arts college, UMD enrolled 11,729 students in fall 2010 (46.73% from Greater Minnesota and 41.80% from the Twin Cities area). The campus offers 13 undergraduate degrees in 74 majors, graduate programs in 24 fields a two- year program in the School of Medicine, and a College of Pharmacy program. The campus also offers three all- university Ph.D. programs (one of which is located primarily on the UMD campus), and cooperates significantly in the delivery of six Twin Cities- based Ph.D. programs. UMD faculty participate in research and scholarly activities as part of their institutional mission of research, teaching, and public service. Sponsored research and creative activity expenditures have increased approximately 40% over the past 10 years, to $20 million annually. A focus on freshwater research education and outcomes continues to be a UMD priority through the work of faculty and staff associated with the Minnesota Sea Grant, Large Lakes Observatory, Natural Resources Research Institute, Swenson College of Science and Engineering, and Great Lakes Maritime Research Institute. The Natural Resource and Research Institute (NRRI) has also been a prominent research and outreach arm of UMD for over 25 years. Activities include economic development efforts, applied research and development, and active engagement in environmental studies. NRRI employs over 150 scientists, engineers, and business specialists, funded primarily on grants and contracts of $15 million each year. UMD also benefits the region through research and outreach focused on regional economic development, entrepreneurism, and other key areas. UMD consistently ranks among the top Midwestern regional universities in U.S. News and World Report's "America's Best Colleges" issue. THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA 21

26 Economic Impact on Arrowhead Region The overall economic impact of the U of M s operations on the Arrowhead Region total $345.9 million ($182.9 million direct). Simply stated, 1 out of every 35 dollars in the regional economy is supported by the U of M (see Figure 7). Table 7 shows the top ten industry sectors for economic impact in the Arrowhead Region. Figure 7: U of M Economic Impact on Arrowhead Region (in millions) $345.9 milion $182.9 million $163.0 million Direct Indirect/Induced Total Table 7. Top Ten Industry Sectors for Economic Impact in the Arrowhead Region Sector Description Total Economic Impact 392 Colleges & universities $157,322, Construct new nonresidential commercial and health care structures $22,240, Imputed rental activity for owner- occupied dwellings $14,534, Electric power generation, transmission, and distribution $12,674, Real estate establishments $12,319, Other state and local government enterprises $11,018, Food services and drinking places $9,852, Private hospitals $9,364, Offices of physicians, dentists, and other health practitioners $7,551, Monetary authorities and depository credit in $6,410, THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA

27 Employment Impact on Arrowhead Region The U of M supports a total of 4,023 jobs (2,344 direct jobs) in the Arrowhead region. One out of every 44 jobs in the Arrowhead region exists because of the U of M (see Figure 8). Table 8 below shows the top ten industry sectors for employment in the Arrowhead Region. Figure 8: U of M Employment Impact on Arrowhead Region (in jobs) 4,023 jobs 2,344 jobs 1,679 jobs Direct Indirect/Induced Total Table 8. Top Ten Industry Sectors for Employment in the Arrowhead Region Sector Description Total Employment Impact 392 Colleges & universities 2,362 jobs 34 Construct new nonresidential commercial and health care structures 203 jobs 413 Food services and drinking places 201 jobs 360 Real estate establishments 94 jobs 397 Private hospitals 69 jobs 394 Offices of physicians, dentists, and other health practitioners 53 jobs 398 Nursing and residential care facilities 48 jobs 432 Other state and local government enterprises 41 jobs 324 Retail Stores - Food and beverage 37 jobs 329 Retail Stores - General merchandise 37 jobs Government Revenue Impact on Arrowhead Region U of M s operations in the Arrowhead region generate $14.0 million per year in indirect state and local tax revenue. THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA 23

28 Economic Development Region 4: West Central Region Regional Profile The West Central Region includes the following University of Minnesota entities in: Clay County: Regional Extension Office; Otter Tail County: Central Minnesota AHEC, Regional Extension Office; and Stevens County: Regional Extension Office, West Central Research and Outreach Center, University of Minnesota Morris EDR 4: West Central Regional Demographics ü Total Regional Population: 84,730 ü Total Regional Households: 35,607 ü Total Regional Employment: 53,271 ü Gross Regional Product: $3.2 Billion Counties in Economic Development Region 4 Becker, Clay, Douglas, Grant, Otter Tail, Pope, Stevens, Traverse, and Wilkin Counties University of Minnesota, Morris (UMM) The University of Minnesota, Morris (UMM) on the western edge of the state is one of the top public liberal arts colleges in the nation, preparing its students to be global citizens who value and pursue intellectual growth, civic engagement, intercultural competence, and environmental stewardship. The Morris campus and its preceding institutions have for over a century played an integral role in the University of Minnesota system and in West Central Minnesota, the state, and the nation. UMM is committed to outstanding teaching, dynamic learning, innovative faculty and student scholarship and creative activity, and public outreach in a residential academic setting fostering collaboration, diversity, and a deep sense of community. 24 THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA

29 Enrolling 1,811 undergraduates in 2010, (20% of them students of color), UMM is one of 25 Council of Public Liberal Arts Colleges, has been declared a model liberal arts college by the North Central Association of Colleges and Schools, and like the Twin Cities campus is on Kiplinger s list of Best Values in Public Colleges. The close- knit campus emphasizes faculty/student collaboration in research, study abroad, and service learning. Deeply rooted in the tall grass prairies of Minnesota, the campus also has advanced sustainable, environmentally friendly initiatives of national stature that touch nearly all aspects of campus life. UMM provides west central Minnesota with an innovative research triangle linking the UMM campus, the West Central Research and Outreach Center, and the USDA Soil Conservation Research Laboratory. The collaborations provide a rich arena for renewable energy research and expand resources and job creation in the region, along with supporting undergraduate research opportunities for students. UMM also strengthens regional and national environmental sustainability as a national leader in developing and implementing renewable energy products; it is recognized as a state- of- the art campus with a distributed hybrid resource platform (including wind, biomass, and photo- voltaic resources). Economic Impact on West Central Region The total economic impact of the U of M s operations on the West Central region total $65.5 million ($45.9 million). One out of 49 dollars in the West Central regional economy is supported by the U of M. (See Figure 9.) Table 9 shows the top ten industry sectors for economic impact in the West Central Region. Figure 9: U of M Economic Impact on West Central Region (in millions) $65.5 million $45.9 million $19.6 million Direct Indirect/Induced Total THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA 25