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The Economic and Societal Impact of The University of Minnesota

June 21 11

08 Fall

ii THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA

TABLE OF CONTENTS

EXECUTIVE REPORT 1

INTRODUCTION 1 PROJECT OVERVIEW 2 METHODOLOGY EMPLOYED IN THE U OF M ECONOMIC IMPACT STUDY 2

INTEGRAL TO THE STATE’S ECONOMIC SUCCESS 3

STRENGTHENING STATE AND LOCAL GOVERNMENT THROUGH TAX REVENUES 5

THE U OF M GENERATES AND SUSTAINS JOBS 5

U OF M RESEARCH 7

BENEFITING THE STATE BEYOND OPERATIONS 11

EDUCATING THE FUTURE WORKFORCE 11 U OF M ALUMNI PLAY A VITAL ROLE IN THE MINNESOTA ECONOMY 11 THE U OF M PROVIDES SUPPORT TO THE COMMUNITY 13 U OF M OUTREACH AND EXTENSION 13 U OF M LIBRARIES 13

GENERATING ECONOMIC IMPACT AND JOBS THROUGHOUT THE ENTIRE STATE 15

ECONOMIC DEVELOPMENT REGION 1: NORTHWEST 16 REGIONAL PROFILE 16 UNIVERSITY OF MINNESOTA, CROOKSTON (UMC) 16 ECONOMIC IMPACT ON NORTHWEST REGION 18 EMPLOYMENT IMPACT ON NORTHWEST REGION 19 GOVERNMENT REVENUE IMPACT ON NORTHWEST REGION 19 ECONOMIC DEVELOPMENT REGION 3: ARROWHEAD REGION 20 REGIONAL PROFILE 20 UNIVERSITY OF MINNESOTA, DULUTH (UMD) 20 ECONOMIC IMPACT ON ARROWHEAD REGION 20 EMPLOYMENT IMPACT ON ARROWHEAD REGION 23 GOVERNMENT REVENUE IMPACT ON ARROWHEAD REGION 23 ECONOMIC DEVELOPMENT REGION 4: WEST CENTRAL REGION 24 REGIONAL PROFILE 24 UNIVERSITY OF MINNESOTA, MORRIS (UMM) 24 ECONOMIC IMPACT ON WEST CENTRAL REGION 25 EMPLOYMENT IMPACT ON WEST CENTRAL REGION 26 GOVERNMENT REVENUE IMPACT ON WEST CENTRAL REGION 27 ECONOMIC DEVELOPMENT REGION 10: SOUTHEAST REGION 28 REGIONAL PROFILE 28 UNIVERSITY OF MINNESOTA ROCHESTER (UMR) 28 ECONOMIC IMPACT ON SOUTHEAST REGION 29 EMPLOYMENT IMPACT ON SOUTHEAST REGION 30 GOVERNMENT REVENUE IMPACT ON SOUTHEAST REGION 31

THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA iii

ECONOMIC DEVELOPMENT REGION 11: 7 – COUNTY TWIN CITIES 31 REGIONAL PROFILE 31 UNIVERSITY OF MINNESOTA, TWIN CITIES (UMTC) 31 ECONOMIC IMPACT ON 7-‐COUNTY TWIN CITIES REGION 32 EMPLOYMENT IMPACT ON 7-‐COUNTY TWIN CITIES REGION 33 GOVERNMENT REVENUE IMPACT ON 7-‐COUNTY TWIN CITIES REGION 34

APPENDIX A: DEFINITION OF TERMS 35

APPENDIX B: ECONOMIC IMPACT BY MINNESOTA DEVELOPMENT REGION 36

APPENDIX C: METHODOLOGY 37

APPENDIX D: FAQS REGARDING ECONOMIC IMPACT ASSESSMENT 39

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.

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THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA

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. 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.

University of Minnesota Study Overview

Study Period: Fiscal Year 2009 – 2010 (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

THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA 3

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.)

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Table 1 below shows the top industry sectors impacted by the U of M’s operations in terms of their total economic impact.

Table 1. Top Ten Industry Sectors for Economic Impact

Sector Description Total Economic Impact

392 Colleges & universities $2,638,500,432 397 Private hospitals $1,309,996,646 360 Real estate establishments $536,440,679 361 Imputed rental activity for owner-‐occupied dwellings $321,786,394

34 Construct new nonresidential commercial and health care structures

$290,402,052

319 Wholesale trade businesses $223,835,993 413 Food services and drinking places $175,745,768 357 Insurance carriers $164,103,418 394 Offices of physicians, dentists, and other health practitioners $157,813,319 31 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.

$4.1 billion $4.5 billion

$8.6 billion

Direct Indirect/Induced Total

Figure 1: University of Minnesota Economic Impact (in billions)


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 09-‐10 ($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.

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The University directly employed 42,319 full-‐time faculty, staff and students during FY 09-‐10. The breakdown of this direct employment number is as follows:

Faculty and Staff – 19,157 jobs

Graduate/Post-‐Doc/Residents – 6.279 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.)

Table 2 shows the top ten industry sectors impact by the U of M’s operations in terms of employment.

Table 2. Top Ten Industry Sectors for Employment Impact

Sector Description 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


2,566 jobs

398 Nursing and residential care facilities 1,893 jobs

394 Offices of physicians, dentists, and other health practitioners

1,100 jobs

42,319 jobs 37,178 jobs

79,497 jobs


Figure 2: University of Minnesota Employment Impact (in jobs)


Table 2. Top Ten Industry Sectors for 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 Target2.

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 5th 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.

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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


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.)

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 $662,097,157 361 Imputed rental activity for owner-‐occupied dwellings $59,088,387 360 Real estate establishments $55,918,672 319 Wholesale trade businesses $34,025,723 354 Monetary authorities and depository credit

intermediation $32,399,764

413 Food services and drinking places $30,796,351 397 Private hospitals $30,393,764 357 Insurance carriers $28,721,380 394 Offices of physicians, dentists, and other health

practitioners $28,283,912

367 Legal services $18,912,574


$1.5 billion


Figure 3: U of M Research Impact (in billions)

10 THE ECONOMIC AND SOCIETAL IMPACT OF THE UNIVERSITY OF MINNESOTA

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.

Table 4: Top Ten Industry Sectors for Research 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


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 2004-‐2006, 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


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 2009-‐2010, 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 2009-‐2010 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.)

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 $8,5323 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.


$8.9 billion

Undergraduate Impact Graduate/ Professional Impact

Total Impact of Alumni

Figure 4: Economic Impact of Earnings of U of M Alumni (in billions)


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 Students4

• 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.


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 2004–05 and 2010–11 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


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.


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.

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.

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


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.


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.

Table 5. Top Ten Industry Sectors for Economic Impact in the Northwest Region


392 Colleges & universities $19,703,285

34 Construct new nonresidential commercial and healthcare structures $4,216,324

361 Imputed rental activity for owner-‐occupied dwellings $1,642,427 397 Private hospitals $982,547 413 Food services and drinking places $960,120 319 Wholesale trade businesses $752,129 354 Monetary authorities and depository credit intermediation $492,631 394 Offices of physicians, dentists, and other health practitioners $477,651 432 Other state and local government enterprises $349,000 351 Telecommunications $328,334

$25.1 million

$9.2 million

$34.3 million


Figure 5: U of M Economic Impact on Northwest Region (in millions)


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).

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


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.

379 jobs 152 jobs

531 jobs


Figure 6: U of M Employment Impact on Northwest Region (in jobs)


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.

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.

EDR 3: Arrowhead Regional Demographics






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.


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.

Table 7. Top Ten Industry Sectors for Economic Impact in the Arrowhead Region


392 Colleges & universities $157,322,878

34 Construct new nonresidential commercial and health care structures $22,240,574

361 Imputed rental activity for owner-‐occupied dwellings $14,534,025 31 Electric power generation, transmission, and distribution $12,674,641 360 Real estate establishments $12,319,020 432 Other state and local government enterprises $11,018,133 413 Food services and drinking places $9,852,221 397 Private hospitals $9,364,079

394 Offices of physicians, dentists, and other health practitioners $7,551,142

354 Monetary authorities and depository credit in $6,410,466

$182.9 million $163.0 million

$345.9 milion


Figure 7: U of M Economic Impact on Arrowhead Region (in millions)


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.

Table 8. Top Ten Industry Sectors for Employment in the Arrowhead Region


392 Colleges & universities 2,362 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.

2,344 jobs 1,679 jobs

4,023 jobs


Figure 8: U of M Employment Impact on Arrowhead Region (in jobs)


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


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.

EDR 4: West Central Regional Demographics






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.

$45.9 million

$19.6 million

$65.5 million


Figure 9: U of M Economic Impact on West Central Region (in millions)


Table 9. Top Ten Industry Sectors for Economic Impact in the West Central Region


392 Colleges & Universities $35,719,049


$9,962,225

361 Imputed rental activity for owner-‐occupied dwellings $3,359,779 413 Food services and drinking places $1,305,935

394 Offices of physicians, dentists, and other health practitioners

$1,218,144

354 Monetary authorities and depository credit intermediation $1,054,985 397 Private hospitals $996,843 319 Wholesale trade businesses $923,349 351 Telecommunications $701,960 398 Nursing and residential care facilities $592,011

Employment Impact on West Central Region The operations of the U of M directly and indirectly support 955 jobs in the West Central Region (641 direct jobs). On out of 56 jobs in the West Central region exists because of the operations of the U of M. (See Figure 10.) Table 10 shows the top ten industry sectors for employment impact in the West Central Region.

641 jobs 314 jobs

955 jobs


Figure 10: U of M Employment Impact on West Central Region (in jobs)


Table 10. Top Ten Industry Sectors for Employment in the West Central Region


392 Colleges & universities 643 jobs


413 Food services and drinking places 28 jobs 398 Nursing and residential care facilities 12 jobs

394 Offices of physicians, dentists, and other health practitioners 11 jobs

329 Retail Stores -‐ General merchandise 9 jobs 324 Retail Stores -‐ Food and beverage 8 jobs 397 Private hospitals 8 jobs 425 Civic, social, professional, and similar organizations 7 jobs 331 Retail Non stores -‐ Direct and electronic sales 7 jobs

Government Revenue Impact on West Central Region U of M operations in the West Central Region generate $4.6 million per year in indirect state and local tax revenue.


Economic Development Region 10: Southeast Region

Regional Profile The Southeast Region includes the following University of Minnesota entities in: Mower County: Hormel Institute; and Olmsted County: Regional Extension Office, Southeast Minnesota AHEC, University of Minnesota Rochester.


Dodge, Fillmore, Freeborn, Goodhue, Houston, Mower, Olmsted, Rice, Steele, Wabasha, and Winona Counties

University of Minnesota Rochester (UMR) The University of Minnesota, Rochester (UMR), formally established in 2006, is the newest campus in the University of Minnesota system and serves the academic and professional needs of southeastern Minnesota. UMR provides graduate and undergraduate degrees and focuses on the areas of health sciences and biotechnology, preparing students for a broad spectrum of certification programs, professional schools, and graduate programs leading to health profession careers, as well as entry-‐level science and laboratory positions in industry, government agencies, and universities. It also offers programs in business, education, public health, and social work.

At UMR, faculty and students, research and education intertwine seamlessly with the strengths of biomedical and business enterprises of the Rochester area and the international reach of the University of Minnesota system.

EDR 10: Southeast Regional Demographics






The Rochester Higher Education Development Committee (RHEDC) delivered a report to the Legislature and the Governor in January of 2006. The committee’s recommendation was to establish "a world class higher education institution that leverages the University of Minnesota’s research capability, in partnership with IBM, Mayo Clinic and other industry leaders to build signature academic and research programs that complement southeast Minnesota’s existing leadership roles in health sciences, biosciences, engineering and technology." UMR has expanded its collaborations and partnerships beyond the academic programs to working hand-‐in-‐hand with local establishments to provide student housing, recreation, and entertainment as well. UMR is delivering upon the promise to be a regional educational partner to support the already thriving industry segments in the Southwest region.

Economic Impact on Southeast Region The U of M’s operations in the Southeast region have a total economic impact of $61.6 million ($44.2 million direct). (See Figure 11.) Table 11 shows the top ten industry sectors for economic impact in the Southeast Region.

Table 11: Top Ten Industry Sectors for Economic Impact in the Southeast Region


392 Colleges & universities $41,546,637 34 Construct new nonresidential commercial and health care

structures $2,673,474

361 Imputed rental activity for owner-‐occupied dwellings $2,673,144 397 Private hospitals $1,698,906 394 Offices of physicians, dentists, and other health

practitioners $1,394,198

413 Food services and drinking places $1,003,789

$44.2 million

$17.4 million

$61.6 million


Figure 11: U of M Economic Impact on Southeast Region (in millions)


Table 11: Top Ten Industry Sectors for Economic Impact in the Southeast Region


319 Wholesale trade businesses $792,827 354 Monetary authorities and depository credit intermediation $789,138 357 Insurance carriers $599,887 360 Real estate establishments $428,271

Employment Impact on Southeast Region The U of M’s operations in the Southeast Region support a total of 908 jobs (716 direct jobs). (See Figure 12.) Table 12 shows the top ten industry sectors for employment in the Southeast Region.

Table 12. Top Ten Industry Sectors for Employment in the Southeast Region Sector Description Total Employment

Impact 392 Colleges & universities 717 jobs


413 Food services and drinking places 20 jobs 397 Private hospitals 12 jobs

394 Offices of physicians, dentists, and other health practitioners 9 jobs

398 Nursing and residential care facilities 8 jobs 324 Retail Stores -‐ Food and beverage 7 jobs 329 Retail Stores -‐ General merchandise 7 jobs 425 Civic, social, professional, and similar organizations 6 jobs 360 Real estate establishments 5 jobs

716 jobs

192 jobs

908 jobs


Figure 12: U of M Employment Impact on Southeast Region (in jobs)


Government Revenue Impact on Southeast Region U of M operations in the Southeast Region generate $7.3 million per year in indirect state and local tax revenue.

Economic Development Region 11: 7 – County Twin Cities

Regional Profile The 7-‐County Twin Cities Region includes the following University of Minnesota entities in: Anoka County: Regional Extension Office, Cedar Creek Ecosystem Science Reserve; Carver County: Minnesota Landscape Arboretum; Dakota County: Regional Extension Office, UMore Park; Hennepin County: Horticultural Research Center, MN Urban AHEC, Urban Research and Outreach Center(UROC), U of M Twin Cities (Minneapolis), University of Minnesota Medical Center—Fairview, U of M Physicians; Ramsey County: U of M Twin Cities (St. Paul); and Washington County: O’Brien Observatory.


Anoka, Carter, Dakota, Hennepin, Ramsey, Scott and Washington Counties

University of Minnesota, Twin Cities (UMTC) The University of Minnesota, Twin Cities (UMTC), is among the largest public research universities in the country, offering undergraduate, graduate, and professional students a multitude of opportunities for study and research. Located at the heart of one of the nation’s most vibrant, diverse metropolitan communities, students on the campuses in Minneapolis and St. Paul benefit from extensive partnerships with world-‐renowned health centers, international corporations, government agencies, and arts, nonprofit, and public service

EDR 10: 7-‐County Twin Cities Regional Demographics

ü Total Regional Population: 2,846,576

ü Total Regional Households: 1,173,703

ü Total Regional Employment: 2,065,587



organizations. UMTC is the flagship campus of the U of M system and is nationally distinguished for its educational offerings, research portfolio and faculty.

• Research—UMTC ranked eigth among public research institutions in the most recent National Science Foundation Survey of Research and Development Expenditures.

• National Merit Scholars—UMTC is second in the Big Ten with 101 freshmen who are National Merit Scholars.

• Citation Index ranked U of M programs among the top five public research universities in three fields of study: mathematics (second), chemistry (third) and environment/ecology (fourth). Another 11 programs rank in the top 10, giving the U of M a total of 14 top-‐10 programs at public universities.

Economic Impact on 7-‐County Twin Cities Region The overall economic impact of the U of M’s operations in the 7-‐County Twin Cities region totals $8.0 billion ($3.8 billion direct). The U of M supports one out of 23 dollars in the regional economy. (See Figure 13.) Table 13 shows the top ten industry sectors for economic impact on the 7-‐County Twin Cities Region.

Table 13. Top Ten Industry Sectors for Economic Impact on the 7-‐County Twin Cities Region


392 Colleges & universities $2,032,364,999 397 Private hospitals $1,234,472,323 360 Real estate establishments $719,533,727 361 Imputed rental activity for owner-‐occupied dwellings $302,227,124 34 Construct new nonresidential commercial and health care $239,058,563


$8.0 billion


Figure 13: U of M Economic Impact on 7-‐County Twin Cifes Region (in billions)


Table 13. Top Ten Industry Sectors for Economic Impact on the 7-‐County Twin Cities Region


structures 319 Wholesale trade businesses $223,233,011 413 Food services and drinking places $177,012,177 357 Insurance carriers $162,567,672 394 Offices of physicians, dentists, and other health care

structures $145,997,036

354 Monetary authorities and depository credit intermediation $129,712,374

Employment Impact on 7-‐County Twin Cities Region The U of M’s operations support 70,971 jobs (36,281 direct jobs) in the 7-‐County Twin Cities Region. One out of 29 jobs in the region exists because of the U of M. (See Figure 14.) Table 14 shows the top ten industry sectors for employment in the 7-‐County Twin Cities Region.

Table 14: Top Ten Industry Sectors for Employment on the 7-‐County Twin Cities Region


392 Colleges & universities 25,265 jobs 397 Private hospitals 8,173 jobs 360 Real estate establishments 4,679 jobs 413 Food services and drinking places 3,025 jobs

34 Construct new nonresidential commercial and health care structures 1,954 jobs

398 Nursing and residential care facilities 1,640 jobs 382 Employment services 1,157 jobs 394 Offices of physicians, dentists, and other health practitioners 1,009 jobs 319 Wholesale trade businesses 973 jobs 388 Services to buildings and dwellings 856 jobs

36,281 jobs 34,690 jobs

70,971 jobs


Figure 14: U of M Employment Impact on 7-‐County Twin Cifes Region (in jobs)


Government Revenue Impact on 7-‐County Twin Cities Region U of M generates $343 million per year in indirect state and local tax revenue as a result of its operations in the 7-‐County Twin Cities Region.


Appendix A: Definition of Terms Study Year Fiscal Year 2009-‐2010 (FY 09-‐10)

Total Economic Impact

The total economic impact of an institution includes both the direct impact and the indirect impact generated in the economy as a result of the institution. Direct impact includes items such as institutional spending, employee spending, and spending by visitors to the institution. Indirect impact, also known as the multiplier effect, includes the re-‐spending of dollars within the local economy.

Multiplier Effect

The multiplier effect is the additional economic impact created as a result of the institution’s direct economic impact. Local companies that provide goods and services to an institution increase their purchasing by creating a multiplier.

Direct Tax Payments

Direct tax payments made by an institution to a unit of government.

Indirect Tax Payments

Government revenue that is collected by governmental units in addition to those paid direct by an institution, including taxes paid directly by employees of the institution, visitors to the institution, and vendors who sell products to the institution.

Direct Employment

Total employees based on total jobs.

Indirect Employment

Indirect employment is the additional jobs created as a result of the institution’s economic impact. Local companies that provide goods and services to an institution increase their number of employees as purchasing increases thus creating an employment multiplier.


Appendix B: Economic Impact by Minnesota Development Region

Economic Impact

Employment Impact

Government Revenue Impact

Economic Development Region 1 -‐ Northwest $34.3 million 531 jobs $1.2 million

Economic Development Region 2 -‐ Headwaters $5.5 million 105 jobs $179,230

Economic Development Region 3 -‐ Arrowhead $345.9 million 4,023 jobs $14.0 million

Economic Development Region 4 – West Central $65.5 million 955 jobs $4.6 million

Economic Development Region 5 – North Central $5.7 million 162 jobs $226,972

Economic Development Region 6E – Southwest Central $7.3 million 185 jobs $245,315

Economic Development Region 6W – Upper Minnesota Valley $3.3 million 78 jobs $114,404

Economic Development Region 7E – East Central $19.6 million 339 jobs $911,374

Economic Development Region 7W -‐ Central $34.7 million 657 jobs $4.3 million

Economic Development Region 8 -‐ Southwest $6.7 million 151 jobs $228,457

Economic Development Region 9 – South Central $17.8 million 432 jobs $813,363

Economic Development Region 10 -‐ Southeast $61.6 million 908 jobs $7.3 million

Economic Development Region 11 – 7 County Twin Cities $8.0 billion 70,971 jobs $343 million


Appendix C: Methodology IMPACT ON STATE BUSINESS VOLUME AND GOVERNMENT REVENUE

The university is a major employer in the state and, as such, a major generator of personal income for state residents. Businesses operating within Minnesota in the wholesale, retail, service and manufacturing sectors benefit from the direct expenditures of the institutions and their faculty, staff, students and visitors on goods and services. In addition, many of these "direct" expenditures are re-‐circulated in the economy as recipients of the first-‐round of income re-‐spend a portion of this income with other businesses and individuals within the

METHODOLOGY AND DATA UTILIZED FOR THE ESTIMATION OF THE ECONOMIC IMPACT OF THE UNIVERSITY OF MINNESOTA SYSTEM The economic impact of the University of Minnesota system was estimated using IMPLAN (IMpact Analysis for PLANing), an econometric modeling system developed by applied economists at the University of Minnesota and the U.S. Forest Service. The IMPLAN modeling system has been in use since 1979 and is currently used by over 500 private consulting firms, university research centers, and government agencies. The IMPLAN modeling system combines the U.S. Bureau of Economic Analysis' Input-‐Output Benchmarks with other data to construct quantitative models of trade flow relationships between businesses and between businesses and final consumers. From this data, one can examine the effects of a change in one or several economic activities to predict its effect on a specific state, regional, or local economy (impact analysis). The IMPLAN input-‐output accounts capture all monetary market transactions for consumption in a given time period. The IMPLAN input-‐output accounts are based on industry survey data collected periodically by the U.S. Bureau of Economic Analysis and follow a balanced account format recommended by the United Nations.

IMPLAN's Regional Economic Accounts and the Social Accounting Matrices were used to construct state-‐level multipliers, which describe the response of the state economy to a change in demand or production as a result of the activities and expenditures of the University of Minnesota system. Each industry that produces goods or services generates demand for other goods and services and this demand is multiplied through a particular economy until it dissipates through "leakage" to economies outside the specified area. IMPLAN models discern and calculate leakage from local, regional, and state economic areas based on workforce configuration, the inputs required by specific types of businesses, and the availability of both inputs in the economic area. Consequently, economic impacts that accrue to other regions or states as a consequence of a change in demand are not counted as impacts within the economic area.

The model accounts for substitution and displacement effects by deflating industry-‐specific


multipliers to levels well below those recommended by the U.S. Bureau of Economic Analysis. In addition, multipliers are applied only to personal disposable income to obtain a more realistic estimate of the multiplier effects from increased demand. Importantly, IMPLAN's Regional Economic Accounts exclude imports to an economic area so the calculation of economic impacts identifies only those impacts specific to the economic impact area, in this case the state of Minnesota. IMPLAN calculates this distinction by applying Regional Purchase Coefficients (RPC) to predict regional purchases based on an economic area's particular characteristics. The Regional Purchase Coefficient represents the proportion of goods and services that will be purchased regionally under normal circumstances, based on the area's economic characteristics described in terms of actual trade flows within the area.

MODEL INPUTS AND DATA SOURCES

Model inputs included actual FY10 expenditures provided by for each of the five University of Minnesota campuses, Research and Outreach Centers and Extension Offices throughout the state.

Appendix D: FAQs Regarding Economic Impact Assessment

What is economic impact?

Economic impact begins when an organization spends money. Economic impact studies measure the direct economic impact of an organization's spending plus additional indirect spending in the economy as a result of direct spending. Economic impact has nothing to do with dollars collected by institutions, their profitability or even their sustainability, since all operating organizations have a positive economic impact when they spend money and attract spending from outside sources.

Direct economic impact measures the dollars that are generated within state of 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 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 total economic impact includes the “multiplier” of spending from companies that do business with U of M. Support businesses may include lodging establishments, restaurants, construction firms, vendors, temporary agencies, etc. Spending multipliers attempt to estimate the ripple effect in the state economy where the spending occurs. For example: Spending by a U of M campus with local vendors provides these vendors with additional dollars that they re-‐spend in the local economy, causing a “multiplier effect.”

What is the multiplier effect?

Multipliers are a numeric way of describing the secondary impacts stemming from the operations of an organization. For example, an employment multiplier of 1.8 would suggest that for every 10 employees hired in the given industry, 8 additional jobs would be created in other industries, such that 18 total jobs would be added to the given economic region. The multipliers used in this study range from 1.8 to 2.0.

The Multiplier Model is derived mathematically using the input-‐output model and Social Accounting formats. The Social Accounting System provides the framework for the predictive Multiplier Model used in economic impact studies. Purchases for final use drive the model. Industries that produce goods and services for consumer consumption must purchase products, raw materials, and services from other companies to create their product. These vendors must also procure goods and services. This cycle continues until all the money is leaked from the


region’s economy. There are three types of effects measured with a multiplier: the direct, the indirect, and the induced effects. The direct effect is the known or predicted change in the local economy that is to be studied. The indirect effect is the business-‐to-‐business transactions required to satisfy the direct effect. Finally, the induced effect is derived from local spending on goods and services by people working to satisfy the direct and indirect effects.

• Direct effects take place only in the industry immediately being studied.

• Indirect effects concern inter-‐industry transactions: because the U of M is in business, they have a demand for locally produced materials needed to operate.

• Induced effects measure the effects of the changes in household income: employees of U of M and suppliers purchase from local retailers and restaurants.

• Total Economic Impacts the total changes to the original economy as the result of the U of M’s operations. i.e., Direct effects + Indirect effects + Induced effects = Total Economic Impacts

What methodology was used in this study?

IMPLAN (IMpact analysis for PLANning) data and software. Using classic input-‐output analysis in combination with regional specific Social Accounting Matrices and Multiplier Models, IMPLAN provides a highly accurate and adaptable model for its users. The IMPLAN database contains county, state, zip code, and federal economic statistics which are specialized by region, not estimated from national averages and can be used to measure the effect on a regional or local economy of a given change or event in the economy's activity.

What is employment impact?

Employment impact measures the direct employment (staff, faculty, administration) plus additional employment created in the economy as a result of the operations of the U of M.

Indirect and Induced employment impact refers to other employees throughout the region that exist because of the U of M’s economic impact. In other words, jobs related to the population -‐-‐ city services (police, fire), employees at local hotels and restaurants, clerks at local retail establishments, residents employed by vendors used by the U of M.


What is the difference between direct and indirect taxes?

Direct tax dollars include sales taxes and net corporate income taxes paid directly by the institution to the state, while indirect taxes include taxes paid to the state by vendors that do business with the University of Minnesota and individuals.

Is this a one-‐time impact or does the impact repeat each year?

The results presented in the U of M economic impact study are generated on an annual basis. The economic impact in future years can either be higher or lower based on number of students, capital expansion, increases in external research and state appropriations.

What are Tripp Umbach's qualifications to perform an Economic Impact Study for the University of Minnesota?

Tripp Umbach is the national leader in providing economic impact analysis to leading health care organizations, universities and academic medical centers. We have completed more than 150 economic impact studies over the past 20 years for clients such as The Pennsylvania State University, The Ohio State University, The University of Washington, The University of Iowa, UAB, Cleveland Clinic, University of Florida Shands HealthCare, the University of North Carolina Hospitals, the University of Pennsylvania Medical Center, the University of Pittsburgh Medical Center, and the Ohio State University Medical Center.

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