Source: ISU News Service
AMES, Iowa – Iowa State University’s $3.4 billion impact on the state of Iowa reflects service to families, communities and businesses and benefits to society from an expanded economy and improved quality of life, according to an economic impact and investment analysis conducted for the Iowa Board of Regents.
Iowa State’s $3.4 billion impact supports 42,640 jobs, or one of every 49 jobs in Iowa. Its economic impact in 2017-18 represented 1.8% of the state’s gross state product — an impact nearly as large as the entire utilities industry in the state, according to the study.
“The study demonstrates that Iowa State University provides an exceptional value and return on investment for our students and all Iowans,” said ISU President Wendy Wintersteen. “We help students achieve their potential and earn the degrees that translate into higher lifetime earnings. We benefit all Iowans by creating a more prosperous economy and improving quality of life, making our state a better place to live and work.”
The overall study provided a comprehensive look at the Regent universities’ economic impact and rate of return to Iowa, as well as a specific analysis of each university. The study, conducted by Emsi, a labor market analytics firm, reflected financial data during fiscal year 2017-18.
Iowa State’s greatest economic impact on the state of Iowa comes as the result of the education and training it provides. Tens of thousands of Iowa State alumni live and work in Iowa. Their impact was $1.8 billion in added income for the state economy, equivalent to supporting nearly 19,000 jobs.
The study credited Iowa State with creating a total of $310.2 million in added income for the state economy through faculty research — the equivalent of supporting 4,139 jobs in Iowa. The direct economic impact in 2017-18 was more than $361 million, with 63% of the total earned from competitive grants and contracts earned by Iowa State scientists. In 2018-19, ISU set a new record for external funding — nearly $261 million.
“Our research is highly integrated with undergraduate and graduate education and the Extension and Outreach delivery of science-based education and information,” said Wintersteen. “That’s our land-grant university mission in a nutshell — mission-oriented science, practical education and shared knowledge with Iowans.”
The study highlighted Iowa State’s strength in moving research results closer to the marketplace. The Regents study stated that, over the past four years, Iowa State received 549 invention disclosures and filed 247 new U.S. patent applications — representing 54 percent of the overall Regents’ total. Iowa State produced 328 licenses from these research developments, representing 62 percent of the overall Regents total.
Iowa State supports a culture of innovation, developing a mindset of entrepreneurship in its students and faculty scientists. During 2017-18, ISU start-up and spin-off companies added $422.2 million to Iowa’s economy, supporting 8,011 jobs. Iowa companies benefit from the expertise of ISU’s Small Business Development Center and the Center for Industrial Research and Service. In a single year, CIRAS alone assisted 1,705 businesses in 95 counties.
Extension and outreach
With a presence in each of Iowa’s 99 counties, ISU Extension and Outreach helped over 10,300 companies and organizations and nearly 16,000 farmers across the state in 2017-18. Besides payroll, the full value of ISU Extension and Outreach to Iowa stakeholders isn’t reflected in the study’s $3.4 billion impact.
“The true value of Extension and Outreach can’t be adequately captured in an economic impact study like this,” said John Lawrence, vice president for ISU Extension and Outreach. “Every day we connect Iowans of all ages with university expertise and science-based information, education and resources. Our impact on Iowa families, communities, farms, businesses and the environment can’t be measured solely by dollars.”
The study did note the importance of thousands of Extension and Outreach volunteers who, in 2017-18, gave more than 398,000 hours to deliver 4-H programs and who, as Master Gardeners, contributed more than 114,000 hours in service to their communities.
Besides the economic impacts, the study included an investment analysis that weighed costs and benefits in considering Iowa State as a worthwhile investment from the perspectives of students, taxpayers and society.
Students see a high rate of return for their investment in education at Iowa State. Over their working lives, Iowa State graduates will receive a present value of $2.9 billion in increased earnings. That’s a return of $3.80 in lifetime earnings for every dollar students invest in an Iowa State education. Students’ average annual rate of return is 14.2%. That outperforms the stock market’s 30-year average annual return of 9.9%.
The analysis confirmed the benefits of earning a bachelor’s degree — higher future earnings that grow throughout graduates’ careers. The average Iowa State graduate with a bachelor’s degree in FY2017-18 will see an increase in earnings of more than $23,000 annually compared to someone with a high school diploma or equivalent working in Iowa. Over a lifetime, the benefits of an ISU bachelor’s degree over a high school diploma amount to $1 million in higher earnings per graduate.
Taxpayers benefit from the higher income and lower social cost of ISU graduates. For every dollar of public money invested in Iowa State in 2017-18, Iowa taxpayers will receive $2.60 in return over the course of students’ working lives.
From a social perspective, Iowa benefits in many ways from ISU education, research and extension and outreach. The primary benefit is an increased economic base, attributed to higher student earning and increased business output. Taken together, the social benefits of ISU equal $7.9 billion — $7.6 billion in added income through students’ lifetime earnings and increased business output, and $280.6 million in social savings — for example, improved health and lifestyles attributed to education. For every dollar invested in ISU, Iowans will receive $4.50 in return for as long as ISU’s 2017-18 students remain employed in the state workforce.
The study also included several social benefits made possible by ISU Extension and Outreach. The study stated that “all Iowans benefit when local people join together to make their communities better places to live and work. All Iowans benefit from efforts to improve water quality, produce crops and livestock sustainably and strengthen rural economies. All Iowans benefit when individuals, families and communities become more resilient and are better able to handle any challenges they may face.”
Read the article at news.iastate.edu