PENN & THE ECONOMY
Penn’s annual impact? $9.6B, report says
Each year, the University of Pennsylvania pumps nearly $10 billion into the state economy—a number that breaks down to roughly $25 million a day, according to a new report released by the University.
Penn’s economic impact in the state and region was examined in depth as part of an economic and fiscal impact report conducted on behalf of Penn by Econsult Corp. of Philadelphia. The report, released last week, traced the University’s vast impact on the Delaware Valley through everything from employee salaries to research, purchases to taxes, and many other factors.
The results, University officials said, show that Penn is more than just a premier academic instition—it’s also a major factor in the region’s economic health.
According to the report, Penn accounts for a staggering $6.5 billion of all economic activity in the City of Philadelphia, and contributes more than $372 million in state and local taxes each year. The report also found that Penn and private developers have invested $500 million in the past decade in neighborhood retail and residential construction projects.
Penn President Amy Gutmann said those investments have helped bolster the business climate throughout Penn’s West Philadelphia neighborhood and the entire state. In fact, Gutmann said, Penn’s investments have generated more than 100,000 jobs—and that’s on top of the 24,750 people employed directly by the University.
For the study, Econsult used standard industry multipliers to calculate the “ripple effect”—indirect and induced expenditures— of Penn’s direct spending. According to the report, for every $4 spent by Penn, another $2.50 is generated in Philadelphia and another $5.60 in the state.
“Dollars spent here continue to circulate throughout the community, inducing even more hiring and business investment,” Gutmann said.
Among the other findings of the report:
• Penn’s economic impact comprises nearly 2 percent of the annual economy of the entire state and 3 percent of the annual economy here in Philadelphia. Essentially, Penn is comparable to such major local economic engines as the Philadelphia International Airport (which generates $14.4 billion each year) and the region’s tourism and hospitality industry ($11.2 billion).
• The University pulled in $750 million in sponsored research awards in 2005—a huge increase from just 10 years ago, when annual funding stood at $327 million.
• In 2005, Penn purchased nearly $3.5 billion in goods and services from Pennsylvania suppliers.
• Penn’s capital investments average about $314 million each year.
• Penn had a hand in the creation of 56 new companies between 2000 and 2005.
• Because Penn has more than 70,000 alumni residing in Pennsylvania, the University is estimated to contribute about $485 million to the state economy through the increased productivity of Penn degrees.
• Visitors to the University spend about $14.5 million in the region each year.