URI_Research_Magazine_2010-2011_Melissa-McCarthy

THE ECONOMIC IMPACT OF FUNDED RESEARCH AT URI IN FY09 ON THE RHODE ISLAND ECONOMY • For every $1 in funded research URI received in FY09, it created $1.7 in terms of total output, based on the direct, indirect, and induced impacts of this research. • While the economic benefits of URI’s funded research extended to all of Rhode Island’s counties, the primary beneficiaries (in order) were Washington County, Kent County, and Providence County.

• In FY09, the $86 million of funded research at URI resulted in an increase in output of $144.8 million. The associated gain in employment was 1,747 jobs. By contrast, during this same period, payroll employment for Rhode Island fell by 17,600. The employment stimulated by this research generated a total increase in labor income for Rhode Island of $98.7 million. • The majority of the jobs created by funded research resulted from the direct and indirect impacts of this research (1,199). The income created from these generated further income and spending (induced spending), which resulted in an additional 548 jobs. The average income of all the jobs created was $56,505. So, the short-term effects of this research were highly significant, based on their overall employment and labor market impacts, which helped to offset the severe job loss Rhode Island suffered in FY09.

• RI is a small business state. According to the Rhode Island Department of Labor and Training, as of March 2010, 82 percent of Rhode Island’s private sector employers had 10 or fewer employees, while 90.4 percent employed fewer than 20 persons. If we consider a five- person firm to be “typical,” the employment gains resulting from funded research at URI in FY09 would have added 350 such companies. But, unlike the actual earnings that existed for such firms, the average earnings for the jobs created by URI’s funded research was $56,505. • The leading sectors of Rhode Island’s economy that were impacted by URI’s funded research in FY09, in terms of the value of output created, were medical-related fields ($9.3 million), Rhode Island’s trade sector (retail and wholesale trade, $8.8 million), and finance, insurance and real estate (FIRE, $4.1 million).

$10,000,000

$8,000,000

$6,000,000

$4,000,000

$2,000,000

FIRE

Trade

Medical

• This funded research resulted in increased taxes paid by individuals and businesses in FY09. The total of all new tax revenue generated was $27.6 million, of which $8.0 million was for state and local taxes, while $19.6 million was for federal taxes. Even with the unusual circumstance of the economic recession, the University of Rhode Island’s FY09 $86 million externally-funded research clearly made a substantial contribution to Rhode Island’s economy. A year from now, this economic impact will prove to be significantly greater as a result of the 22 percent increase in FY10 externally-funded research to $105 million. URI is thinking big and contributing enormously to economic renewal in the Ocean State.

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Research & Innovation 2010-2011