The Regional Economic Impacts of University Research and Science Parks

Abstract

This paper focuses on the regional economic impacts of US university research and science parks. Motivating this focus is the fact that the landscape for private-sector research is changing, and future research might well emphasize America’s “new geography of innovation.” Thus, university research and science parks might face, if they are not already doing so, pressure to retain current tenants and competition for future tenants. We find that only 11 of 146 research and science parks in the USA have, in the spirit of public accountability, conducted an economic impact study. One reason for the paucity of such studies is that universities are unfamiliar about how to conduct as well as how to interpret the findings from such a study. We offer an economic impact method for park administrators to follow if they proceed to document the regional economic impact of their park.

Appendix: Summary of Economic Impact Studies

North Dakota State University North Dakota State University Research & Technology Park “NDSU Research Technology Park, Inc., 2010 Annual Report” Economic Modeling Specialists Inc., 2010
Background information	“The NDSU Research & Technology Park [RTP] operates to enhance the investments in North Dakota State University by the citizens of North Dakota. Through partnerships with international, national and regional centers of excellence, high technology-based businesses, and the research community at NDSU, the Research & Technology Park works to achieve successful technology-based development and broaden the economic base of North Dakota.” https://www.ndsu.edu/research/newsroom/feature_stories2011/ report_shows_ndsu_research_tech_parks_economic_impact_on_region/
Methodology	While Economic Modeling Specialists Inc.’s report is not available on-line or through the Park, it appears that the analysis was one of quantifying jobs, salaries, property income, and revenue to the state and local governments over the 2007–2010 period.
Impact estimates	p. 4: “The 19 businesses located at the RTP account for 893 direct, on-site jobs and another 551 indirect, off-site jobs. … RTP industries pay out nearly $51 million in wages and account for another $23 million in indirect off-site wages as a result of multiplier effects. … RTP industries and offsite but linked businesses generate $28.4 million in property income in North Dakota. … RTP generates more than $10.9 million for state and local governments.”

1. The most recent online report can be found through a Google search for “2010 annual report: unity of purpose”

Purdue University Purdue Research Park “Driving Today’s Economy: An Economic Impact Study of the Purdue Research Park Network” Thomas Miller and Associates, 2011
Background information	p. 5: “The primary mission [of the Park] during the early years was to serve as an attractive site for companies seeking a location to leverage the resources of Purdue University.” Since the early 1990s, the mission of the park has changed and now it is involved in (p. 5): “promoting technology-based economic development [and becoming a] primary vehicle for focusing the University’s economic development activities (both as a physical location and with a dedicated staff).”
Methodology	Economic impact estimates came from the use of the Regional Input-Output Modeling System (RIMS II).
Impact estimates	p. i: The Park’s impact has been: “$256 million investment in the Park facilities and infrastructure from 1999 to 2010; $1.3 billion annual impact for State of Indiana; $48 million contributed to State and local taxes; and $49 million in Federal research and development grants for small businesses brought to the State since 1987.”

1. The summary report is online at: www.aurp.net/assets/executive%20summary.pdf
2. The complete report came from Purdue Research Park. The above page numbers refer to the complete report

University of Arkansas Arkansas Research and Technology Park “Economic Impact of the Arkansas Research and Technology Park” University of Arkansas Center for Business and Economic Research, 2016
Background information	The Arkansas Research and Technology Park (ARTP) is operated by the University of Arkansas Technology Development Foundation. The mission of the foundation (p. 1): “is to stimulate the knowledge-based economy in Arkansas through partnerships that lead to new opportunities for learning and discovery, that build and retain a knowledge-based workforce and that spawns the development of new technologies to enrich the economic base in Arkansas.” The mission of the park is to assist (p. 1): “technology-based companies to be more efficient and have higher quality products by applying knowledge and techniques developed at the University.”
Methodology	Using park tenants’ annual business expenditures and construction expenditures, an IMPLAN model was used to estimate the economic impact on the state.
Impact estimates	The business expenditures of tenants and related construction expenditures exceeded US$216.9 million since 2003. These economic activities (p. 11) “have had a combined economic output impact of $575.9 on the state of Arkansas.”

1. The most recent online report is at: https://cber.uark.edu/files/Economic_Impact_of_the_ARTP_through_2014.pdf. The 2016 report was sent by email. The above page numbers refer to the 2016 report

University of Arizona University of Arizona Tech Park “The Economic Impact of the AU Tech Park” VP Research & Consulting, LLC, 2015
Background information	p. v: The Park is built “upon the synergies among the faculty, administration, students and alumni; the tech parks; and the technology and business community to enhance the impact of UA research, intellectual property and technological innovation … [and to promote] synergistic relationships between the University, industry and the community.”
Methodology	The IMPLAN model was used to calculate economic impacts at the county and state level.
Impact estimates	In 2015 the overall county impact, including construction was US$1.5 billion. At the state level, the impact was US$1.7 billion.

1. The impact estimates are in an executive summary online at: https://techparks.arizona.edu/parks/ua-tech-park/economic-impact. The full report was sent by email. The above page numbers refer to the complete report

University of Illinois at Urbana-Champaign Research Park at the University of Illinois Urbana-Champaign “An Economic Impact Report for the Research Park at the University of Illinois Urbana-Champaign” Champaign County Regional Planning Committee, 2015
Background information	p. 1: “The Research Park at the University of Illinois provides an environment where technology-based businesses can work with faculty and students to take advantage of opportunities for collaborative research and easy access to University labs, equipment, and services. It was created by the University of Illinois in order to advance its economic development mission.”
Methodology	Economic impacts estimated at the regional level from the IMPLAN model.
Impact estimates	p. 7: In 2015, the “economic output from direct, indirect, and induced Research Park operations in East Central Illinois is $319 million.”

1. The report is online at: http://www.researchpark.illinois.edu/sites/default/files/UI%20ResearchPark%20Impact%209-15.pdf

University of Missouri University of Missouri Research Parks “The Economic Impact of the University of Missouri’s Research Operations” The Hanover Council, 2009
Background information	“The University of Missouri has a statewide network of 10 research parks and business incubators, each designed to help faculty, entrepreneurs and businesses collaborate to move innovative research to the marketplace.” The oldest and largest park is the Missouri Research Park (MRP). (https://www.umsystem.edu/ums/aa/umrpi/locations_list)
Methodology	Unclear. Impacts seem to come from the St. Louis Regional Chamber & Growth Association.
Impact estimates	p. 3: “MRP tenant operations are estimated to have a $786 million total impact on the St. Louis area economy, including the direct or indirect support of 4450 jobs.”

1. The Hanover Report is referenced online at: https://www.umsystem.edu/ums/red/umrpi/reports_and_statistics. The report was sent by email. The above page numbers refer to the complete report

University of Nebraska University of Nebraska Technology Park The Annual Economic Impact of Firms Located at the University of Nebraska Technology Park” Bureau of Business Research at the University of Nebraska, 2011
Background information	p. 1: “The mission of the University of Nebraska Technology Park is to enhance the transfer of technology from the University to the marketplace, foster interaction among technology-based businesses and with the University, provide an environment which fosters applied research and development of new technology-driven products or services and promotes technology-focused economic development in Nebraska.”
Methodology	Direct impacts were estimated from (p. 2) “employment, salaries, and gross revenue from firms located at the Technology Park, and of graduates of the Technology Development Center.” Indirect impacts were calculated at the county level using multipliers from the IMPLAN model.
Impact estimates	The total impact from Park businesses in 2010 was US$589 million.

1. The report is online at: https://cba.unl.edu/outreach/bureau-of-business-research/bureau-reports/documents/UNL_Tech_Park_Report.pdf

University of Pennsylvania and Drexel University University City Science Center “University City Science Center: An Economic Catalyst for Greater Philadelphia” Economy League of Greater Philadelphia and Econsult Solutions, Inc., 2016
Background information	The City Science Center’s mission statement is: “Our mission is to inspire and lead a diverse and inclusive community of innovation and entrepreneurship that nurtures and scales economic development through technology commercialization, business growth and civic engagement.” (https://www.sciencecenter.org/about-us)
Methodology	IMPLAN model was used to estimate indirect impacts (e.g., spending on materials, equipment, and professional services) and induced impacts (e.g., spending that is supported by labor income paid to workers as a result of direct and indirect employment in industries, such as food, entertainment, housing, retail, and transportation).
Impact estimates	p. 9: “Science Center incubated firms in greater Philadelphia drive $12.9 billion in annual economic activity.”

1. The report is online at: https://www.sciencecenter.org/news/university-city-science-center-is-an-economic-catalyst-for-greater-philadelphia9

University of Wisconsin—Madison University Research Park “The Economic Contribution of the University Research Park” NorthStar Economics, Inc., 2010
Background information	The Park’s mission is “to encourage technology development and commercialization that advances the economy and benefits research and related education programs at the University of Wisconsin – Madison.” (Strategic Plan at: http://universityresearchpark.org/about/strategic-plan/)
Methodology	The report does not mention the IMPLAN model, but the impact estimates are based on direct and indirect effects from the use of multipliers.
Impact estimates	Park activity generated in 2010 over US$826 million in economic activity statewide; in Dane County, it was US$588 million and in the rest of the state it was US$238 million.

1. The report is online at: http://universityresearchpark.org/wp-content/uploads/2014/03/URP_Economic_Contribution_Report_2010.pdf

Arizona State University Arizona State Research Park “The Economic Impact of the Arizona State University Research Park, 2016” Center for Competitiveness and Prosperity Research at Arizona State University, 2016
Background information	“ASU Research Park’s mission is to strengthen ties between Arizona State University and industry, and to contribute to the Valley’s economic development.” (https://cfo.asu.edu/article/20160406-asu-research-park-board-directors-welcomes-three-new-members)
Methodology	Economic estimates were made using the IMPLAN model
Impact estimates	The total economic impact in 2016 was US$1.4 billion

1. Report send by email

Virginia Commonwealth University Virginia BioTechnology Research Park “The Estimated Cumulative Benefit of the Virginia Biotechnology Research Park” Virginia Economic Development Partnership, 2010
Background information	The mission of The Virginia Biotechnology Research Park is to be “a technology center dedicated to fostering development of Virginia’s biosciences industry through technology transfer, new business formation, expansion of existing businesses and business attraction.” (https://www.biospace.com/employer/506781/virginia-biotechnology-research-park/)
Methodology	IMPLAN model used.
Impact estimates	The Park’s economic impact on the City of Richmond was US$598 million; and for the Greater Richmond area was US$846 million.

1. Report sent by email