Wednesday, February 22, 2023

The University of Iowa is not just the home of the Hawks. It is an economic powerhouse for the state of Iowa, supporting one out of every 19 jobs in the state and adding about $8 billion in additional annual value to the state’s coffers, according to a study commissioned by the Board of Regents, State of Iowa. 

That profound economic impact is equal to about 4% of the state’s $210 billion gross domestic product, according to the study by international consulting firm Lightcast. It’s also an increase of 22%, or $1.5 billion, over the past five years.  

As the state’s largest employer, the UI produces far more revenue for the state than it takes in. More than $261 million in taxpayer dollars went to the university last year, which fuels higher lifetime earnings and increased business output for students totaling nearly $800 million, while lowering demand for government-funded services in Iowa by more than $122 million. The end result is the return for taxpayers is about $3.50 for every dollar invested in the university, according to the study.

“The University of Iowa is an unrivaled engine of economic growth in Iowa and for Iowa,” says UI’s chief innovation officer, Jon Darsee, who oversees the university’s economic development efforts. “Our research spending and economic development bolster businesses across the state. The strong growth in our spinoff companies, which continue to hire more employees, by itself led to an increased impact of $20 million.” 

Here’s what the study found the university’s annual economic impact on the state of Iowa to be: 

  • Alumni impact ($3.5 billion)
  • UI Hospitals & Clinics spending impact ($2 billion)
  • Operations spending impact ($1.4 billion)
  • Economic development impact ($551.4 million)
  • Research spending impact ($369.5 million)
  • Visitor spending impact ($91.2 million)
  • Construction spending impact ($72.3 million)
  • Student spending impact ($64.2 million)
  • Volunteerism impact ($12.2 million)

UI, Iowa State University, and the University of Northern Iowa combined added $14.9 billion in income to the state of Iowa economy during fiscal year 2021-2022, according to the study. That figure is equal to about 7.1% of the total gross state product of the state. The study also notes that the total of university activity supports nearly 200,000 jobs in the state, which is one out of 10 jobs in Iowa. 

The Lightcast study used added income to calculate economic impact in Iowa rather than sales, which can include intermediary costs as well as money spent outside the state. The consulting firm has produced more than 2,800 economic impact studies for educational institutions in three countries since 2000.