Economic Impact
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Harvard’s economic benefits to region include stability, jobs
A recent report titled “Innovation and Opportunity: Harvard University's Impact on the Boston Area Economy” describes Harvard’s broad economic impact, generating more than 48,000 jobs at many levels, from the service industry to construction to highly skilled scientific research positions. The report, prepared by Appleseed Inc, New York, shows Harvard as a source of stability during hard economic times and an engine whose research operations are an important stimulus, creating new companies, new jobs, and attracting millions of research dollars to the region. Harvard's overall economic impact is more than $3.4 billion, according to 2002 figures - the most recent available.
According to the report, Harvard’s role as an important economic engine for the greater Boston area is likely to increase as the University broadens its research efforts in a host of new scientific disciplines.
In 2003, Harvard and seven other Greater Boston research universities (Boston College, Boston University, Brandeis University, Massachusetts Institute of Technology, Northeastern University, Tufts University, and the University of Massachusetts, Boston) released a collective economic study, "Engines of Economic Growth," that outlined their role as the area's special economic advantage: magnets for talent and investment that infuse more than $7 billion into the regional economy each year.
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RESEARCH AS FUEL FOR ECONOMIC GROWTH
Perhaps Harvard's greatest impact is as an economic stimulator, thanks to its large research enterprise, the report said. Harvard's research helps build the regional economy by drawing in hundreds of millions of dollars in research grants. In 2002, for example, research spending totaled $522 million, more than 75 percent of which was from federal grants. Harvard's affiliated hospitals add to that total, bringing in $750 million in 2001 alone.
In what may be good news for the local economy, Harvard's research enterprise is growing. From 1998 to 2002, research spending at Harvard grew by 39 percent and further major expansions are under way.
The strong research base attracts major corporations to invest in the region, with companies like Novartis and Merck building new research and development plants that together will employ 1,400.
Discoveries made at Harvard help stimulate the economy when they are licensed to existing or new companies that develop them into useful products. By 2003, 14 companies in the Boston area owed their creation at least in part to technology licensed at Harvard, the report said.
Harvard faculty and graduates also start their own companies, with companies like Biogen-Idec, the Monitor Group, the Wyeth Genetics Institute, and Cambridge Energy Research Associates started by faculty members; and Staples, Boston Beer, Sapient Corp., Vertex Pharmaceuticals, and others started by former Harvard students.
The "Innovation and Opportunity" study provides the latest evidence of what we at the chamber have known for some time,” said Greater Boston Chamber of Commerce President and Chief Executive Officer Paul Guzzi. "Our regional economy is knowledge-based and our life blood is research, education, and training. Institutions like Harvard are important engines that create the foundation of innovation upon which our economic vitality depends."
EMPLOYMENT AS ECONOMIC STABILITY
Higher education in general and Harvard in particular helped buffer the region from the poor national economy. Harvard added 17 percent more workers between 1992 and 2002, employing 16,128 on a payroll of $792 million as of April 2002.
The "Innovation and Opportunity" study noted that Harvard's jobs are not
just numerous, but high-quality, coming with many benefits and opportunities
for education and training. The benefits for employees and their families
helped Harvard become the only university on Working Mother magazine's 100
best employers list for working parents.
In addition to its own workforce, Harvard generates thousands of indirect
jobs through the money it spends in the local economy. In 2002, Harvard
spent nearly $1.4 billion, of which $888 million went to businesses in the
five-county Boston area.
That amount includes Harvard's annual construction spending, which, between 1998 and 2003 rose from $105 million to $394 million. The report's authors estimated that in 2003, Harvard's construction spending created 2,750 full-time or equivalent jobs in construction-related fields.
The study estimated that another 1,000 jobs were generated with local contractors who provide building maintenance, security, and food services.
Spending by students and visitors to Harvard also adds to the regional economy. The report estimated that student spending in 2002 totaled $175 million, while spending by visitors for a wide variety of special events, programs, conferences, and other purposes totaled about $82 million in 2002. Together, the report's authors estimated that student and visitor spending generated more than 2,900 full-time jobs.
HUMAN CAPITAL
As one of the largest providers of graduate-level education in the region Harvard acts as a generator of skilled labor. Harvard is also has one of the region’s largest adult education programs in the Harvard Extension School, which provides area residents the chance to update learning, indulge in personal growth, and gain training needed to meet changing markets. The University also helps to improve K - 12 education, providing a wide variety of enrichment programs for area schoolchildren. It also helps train area teachers through a variety of programs. More
