$3.1 Billion in Economic Benefits
How do we measure our universities’ effect on our community? We can start with the dollars. While you would never judge an institution of higher education solely by the dollars it brings into the community, the exercise is instructive. We’ll start with the basics.
As with any business, the University of Houston System stands on two economic legs – a demand side and a supply side. Demand-side effects can be thought of as “sales” of educational and research services. In a college town, the effects are obvious. The institution fuels the town’s prosperity.
In Greater Houston, the direct financial impact of a university is less obvious. But it’s quite significant.
Every year the University of Houston System brings more than $1 billion into our local economy. The sources include out-of-town students, government support, philanthropic gifts, and research grants awarded from outside the region. Economists call these “exogenous” dollars. Once this money enters our region, the lion’s share is spent locally. Houston-area households, for example, use much of their income to purchase goods and services provided by local companies. In turn, the companies Houstonians patronize use their income to maintain and grow their businesses, and much of that money gets spent locally, too. In effect, the impact of each dollar brought into our region gets multiplied as it cycles through our local economy.
In the case of the University of Houston System, this multiplier effect means that $1 billion brought into our area every year produces $3.126 billion in economic benefits. Digging deeper, we discover that this $3.126 billion generates 24,000 local jobs, including those directly associated with our universities and the many vendors and contractors who work for and with us. This is in addition to the 12,500 new graduates we produce every year who enter the workforce in Houston and throughout Texas.
That’s a lot of demand-side impact. But it’s not the whole story. Don’t forget the local dollars “saved” when we retain local students who might have sought education elsewhere. The impact of their spending is great, because the demand from stay-at-home students in Houston is high.
The Softer Side of Sales
The demand-side dollars, equating to the “sales” of the University of Houston System, are fairly easy to gauge. The softer, supply-side benefits, though even greater in scope and no less crucial to the long-term economic prosperity of our region, present something of a challenge to quantify.
How can we attach a dollar figure to “positive regional visibility”? How can we measure the value of the research, the consulting expertise, the performing arts, the outreach programs, the public radio and television stations – for that matter, the production of educated workers – all of which emanate from our four universities?
It’s hard. But unquestionably the University of Houston System has far-reaching influence on both the quantity and the quality of life we enjoy.
In fact, these benefits accrue to us because the institutions of the University of Houston System do an outstanding job fulfilling their primary mandate of educating people.
The University of Houston System has awarded 350,000 degrees to more than 200,000 graduates. This makes it the most significant contributor to the “intellectual capital” of our region. Moreover, the Houston area retains an impressive proportion of these men and women. More than 80 percent of alumni reside here five years after graduating.
In 2006 Barton Smith, Houston’s most respected economic forecaster, led a study designed to determine the University of Houston System’s impact on Houston’s economy and community. His findings were startling – even to him. The UH System’s impact is both persuasive and pervasive. The UH System, within one degree of separation, touches virtually every person in our region.
Intellectual Capital
for Our Region
The University of Houston System produces three times more graduates than all other universities in our area combined. Moreover, these degree-holders tend to stay in Houston. After five years, 80.5 percent of graduates are still here, living and working in our region. They play an important part in our economy, providing a knowledge base, generating ideas and technology for the public and private sectors, and making our region attractive to business, labor, and investment.
| Degrees Awarded by the University of Houston System | |
|---|---|
| Bachelor’s | 239,832 |
| Master’s | 85,778 |
| Doctoral | 7,637 |
| Professional | 16,227 |
| Total | 349,474 |
