Economic Impact
Not only does UK play a critical role in economic development, but it also has a tremendous impact on the state's economy:
- During last fiscal year alone, research grants and contracts from out-of-state sources resulted in a $347.4 million contribution to the Kentucky economy, including $182.9 million in personal income.
- Externally supported research accounted for a total 8,824 jobs in the Commonwealth—6,530 jobs at UK and additional jobs throughout the state due to spending from supported research activities.
- Each dollar of out-of-state external funding for research generates approximately $1.90 of total related expenditures.
(source: IMPLAN Economic Impact Model, UK Center for Business and Economic Research, see report below).
Economic Impact from Research at the University of Kentucky
The University of Kentucky has many different impacts upon the economy of Kentucky. The greatest long term effects of a research university on a regional or state economy are difficult to measure, but critically important to economic development. Economists agree that a prominent research university plays critical roles in producing an educated workforce, developing a climate for innovation and entrepreneurship, and creating an environment attractive to high-value industries. UK President Lee. T. Todd Jr. often speaks to this role of the University of Kentucky. The study by Kenneth Sanford and Kenneth Troske in the 2007 Kentucky Annual Economic Report produced by the Center for Business and Economic Research (CBER) is a useful analysis of the roles of education and innovation in state economies and their effects on per capita income.
The economic impact of research at UK that is simplest to measure is the direct economic impact of the research funds attracted from outside the state and expended in the regional economy. Such a calculation serves as a minimal, limited view of economic impact, but nevertheless indicates a significant direct effect of research expenditure on the local economy. The direct effect was estimated based on the supported external funding for research of approximately $230.2 million during the 2006 - 2007 fiscal year. This figure includes funding from federal, state and other sources as well as gifts designated for research at the university.
The University of Kentucky Center for Business and Economic Research used its IMPLAN economic impact model to estimate the employment, income, and output impacts of external research support at the University of Kentucky generated from the direct impact. Only out-of-state sources were used for these calculations since state funds would have gone to other state programs if they had not supported research at the University of Kentucky. Based on information provided by the University of Kentucky Office of the Vice President for Research, approximately $155.37 million of external funding came from federal government sources. Furthermore, it was reported that $29.94 million came from research awards from other sources including business, industry and foundations. For purposes of calculation, it was assumed that 85% of these funds were from out-of-state sources for a total of approximately $25.45 million. These combined figures give a total out-of-state external funding level of approximately $180.81 million for fiscal year 2006–2007. Based on these calculations, each dollar of out-of-state funding generates approximately 1.9 dollars of total related expenditures.
Recent results and the bases for those calculations are in the table below. These figures show the economic impact for fiscal years 2004-2007. For further details on these calculations, please contact Dr. Kenneth Troske, Director Center for Business and Economics Research.
Research Funding |
FY 04 | FY 05 | FY 06 | FY 07 |
|---|---|---|---|---|
| Total Economic Impact : | $363.5 m | $390.0 m | $410.6 m | $347.4 m |
| Components of Economic Impact: | ||||
|
$184.0 m | $203.0 m | $214.0 m | $180.8 m |
|
$191.4 m | $205.3 m | $200.1 m | $182.9 m |
|
9,233 | 9,906 | 10,427 | 8,824 |
|
6,850 | 7,349 | 7,747 | 6,530 |