During the 2020-21 fiscal year, the University of Missouri System generated $6.5 billion in economic impact, a little over $1,000 per Missouri resident, according to a report by Tripp Umbach.
For every dollar spent by the state on the UM System, the Missouri public higher education flagship created $15.49 in economic impact.
“The university is absolutely centered on students first,” said Marshall Stewart, former vice chancellor for extension and engagement at MU. “But the university has a ripple effect on people who never go to the university and never will go, and that’s a wonderful thing.”
The economic impact includes the UM System’s educational institutions, hospitals and other organizations, such as MU Extension.
Every four or five years, the chancellor will commission an economic impact report to get a benchmark of the UM System’s impact to support communication both internally and externally.
“We use it to articulate our message,” Stewart said.
The most recent report released in January 2022 showed a 66% increase in yearly economic impact from the last report on the 2017 fiscal year.
Stewart said this shows the university’s resilience through the pandemic.
How big is $6.5 billion?MU contributed over $5 billion to the $6.5 billion of UM System economic impact, roughly $13.6 million generated per day, which is a little more than the daily revenue of Marriott, the hotel conglomerate.
In another report by Tripp Umbach on the University of Nebraska System, Nebraska’s public higher education system generated only $700 million less in economic impact, despite having two-thirds fewer students enrolled and one-third of the population of Missouri.
That means the Nebraska system generated about three times more economic impact per resident than the UM System.
Another comparison is Missouri State University in Springfield. MSU doesn’t have an equivalent economic impact report, so GDP can be examined using data from the Missouri Economic Research and Information Center or MERIC.
The economic impact is not perfectly analogous to other economic outcome metrics like GDP. Economic impact tends to be more inclusive than GDP, according to Stewart.
The metropolitan statistical area of Columbia generated $11.12 billion in nominal GDP. Given that economic impact is a more generous calculation of spending than GDP, the UM System helped create less than 45% of Columbia’s GDP.
The Columbia metro generates $53,000 in GDP per resident, $8,000 more per resident than the Springfield metro, home of Missouri’s second-largest public university.
This difference can’t be directly attributed to the universities. However, they are both the largest anchor institutions in their respective areas.
Economic impact componentsThe economic impact can be divided into direct and indirect components. The direct impact of the university is $1.6 billion, and the indirect impact is $3.4 billion.
The direct impact is the type of impact that comes to mind first, such as revenue, income paid to employees, goods and services.
The indirect impact is the multiplier effect, which means the economic impact of money directly generated by the university being re-spent.
Zooming out to examine the UM System as a whole, its universities and colleges generated the largest amount of economic impact at a little under $1.4 billion. This is followed by UM System hospitals at $500 million.
The other categories — in order of impact — are scientific research and development services, tenant-occupied dwellings, scenic and sightseeing transportation and support activities, clothing retail, transit, food and beverages, other retail and personal care services.
The academic conglomerate stimulates the local economy in many ways, from football games to ground-breaking research on the use of pig organ donors for humans. This makes the UM System an important agent in Missouri’s economy, providing human capital, innovation and entertainment.
