The University of Massachusetts Amherst

UMass Donahue Institute

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Economy gets boost from UMass

Massachusetts enriched by billions from school

AMHERST - The five-campus University of Massachusetts system generates $4.3 billion in economic activity each year in the state, according to a new report from the UMass Donahue Institute that was released yesterday.

The report, "UMass: A Strategic Investment: A Critical Asset for the Commonwealth's Economic Future," is based on actual university expenditures during fiscal year 2006. The Amherst flagship campus accounts for $1.5 billion of that economic activity.

"The economic development impacts of the University of Massachusetts are not well understood," Michael D. Goodman, director of economic and public policy research at the UMass Donahue Institute, said yesterday.

The Donahue Institute is the public service, outreach and economic development unit of the UMass president's office. Goodman and his staff prepared the economic impact analysis with contributions from all five campuses, including Amherst, Boston, Lowell, Dartmouth and the Worcester medical school.

The UMass system has an annual operating budget of $2 billion, of which the state contributes $524 million. The university generates the other $1.5 billion from federal and private research funding and tuition and fees. The $2 billion in annual spending generates an additional $2.3 billion in economic activity, for a total economic impact of $4.3 billion, resulting in 29,045 jobs.

"The relative self-sufficiency is notable," Goodman said.

The university has 15,000 employees. It generated $377 million in annual research expenditures in fiscal year 2005.

"Our initiatives are driving the innovation, educating the talent and creating the jobs the commonwealth needs for a bright and successful economic future," UMass President Jack M. Wilson said in a statement. "UMass fosters growth in the sectors that will bring jobs and talent to the state."

Allan W. Blair, president and chief executive officer of the Western Massachusetts Economic Development Council, said the sheer size of the university's flagship campus in Amherst and the employment and spending it creates affect Western Massachusetts' economy.

"UMass is extremely important to the Pioneer Valley economy," Blair said. "It's a very big and important aspect."

Blair said it's harder to determine the effect UMass has on economic development beyond its own enterprise, but that is changing. He points to the Pioneer Valley Life Sciences Institute, a Baystate Medical Center and UMass-Amherst research partnership.

"It's becoming more and more an engine of growth," Blair said. "The real benefit is in terms of intellectual property and innovation and what that spawns in commercial activity."

Blair said it's important that the state continue to "improve and grow" the flagship campus.

Of the $377 million in research and development, the Amherst campus does about $134 million, or about 36 percent.

Of the $27 million in annual royalties and licensing fees generated by the system, Amherst produces about $1.3 million, or about 4 percent, while the Worcester medical campus produces about $25.5 million, or about 95 percent.

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