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UC Berkeley is a powerful force in Bay Area economy, says report examining campus's impact
10 January 2002

By Marie Felde, Media Relations

Berkeley - A study examining the contribution of the University of California, Berkeley, to the Bay Area economy has found that the campus is the fifth largest employer in the Bay Area and its research and educational enterprise brings more than one-half billion dollars in new money into the regional economy annually.

The report, "Building the Bay Area's Future: A Study of the Economic Impact of the University of California, Berkeley," was prepared for UC Berkeley by Sedway Group, a San Francisco-based consulting firm.

It provides updated data for the first time in 13 years on the campus's purchasing, employment and research impacts. It also examines UC Berkeley's significant role in the regional economy by generating jobs and personal income and by supplying a constant source of new ideas and highly skilled workers that help to keep the Bay Area a leading center for innovation.

The report examines the economic impact of the campus on the Bay Area, the East Bay and the city of Berkeley using data from 1998-99, the most recent year for which it was available.

It found that, when compared with three other of the nation's leading research universities, UC Berkeley's impact on the local economy is more significant. While Harvard, Johns Hopkins and Columbia universities are all major employers in their regions and major sources of cultural, educational and community service benefits, UC Berkeley generated more indirect and induced spending than Harvard or Johns Hopkins and more total jobs than either Harvard or Columbia.

These findings indicate "that UC Berkeley is more closely aligned with the local economy than other universities," even though the other three have medical schools and affiliated hospitals, which UC Berkeley does not, said the report.

UC Berkeley's largest impact, however, said the report, "is best understood if the university is viewed not in isolation, but as part of a network of academic and research institutions that have helped define the Bay Area."

The benefit of UC Berkeley, when taken together with Stanford University, UC San Francisco and the national research laboratories, over time has a greater impact on the region than the sum of their individual parts, the report said.

"What struck me was that when we commissioned this study more than a year ago, the Bay Area was enjoying an economic boom. Now, we are feeling the effects of a recession. But this report shows that whatever the climate, UC Berkeley is a major contributor to the vitality of the Bay Area economy and in the quality of life we enjoy here," said Chancellor Robert M. Berdahl.

While the campus is not immune from swings in the economy and is planning for potential cutbacks in state funding this year, the report noted that the campus and its workforce are "somewhat buffered from downturns in the local economy, as most of the jobs are funded from revenue sources outside of the Bay Area that are not market dependent."

Further, the report noted, the Bay Area benefits from the campus's enterprise because UC Berkeley is an effective generator of new money into the regional economy. The report found that, in 1998-99, the campus drew 75 percent of its $1.2 billion in revenue from outside the Bay Area, but seven out of every $10 was spent in the Bay Area. The result is that UC Berkeley makes a net contribution to the Bay Area economy of more than a half billion dollars a year.

In addition to the direct economic benefits of the campus's payroll and spending are the benefits the region derives from the well-educated work force and business leaders UC Berkeley provides the region.

"The highly skilled personnel (the campus's) colleges and schools supply are perhaps UC Berkeley's most significant contribution to the Bay Area economy," said the report.

Among other key findings:

* UC Berkeley is a major Bay Area employer and an important generator of jobs throughout the region.
- The campus in 1998-99 was the third largest employer in the East Bay and the fifth largest in the Bay Area, employing 13,520 blue-collar, white-collar and professional workers.
- The campus paid out nearly $603 million in salary and wages, 98 percent of which went directly to Bay Area residents.
- For every $1 million the campus spends, its generates more than 20 jobs. In 1998-99, UC Berkeley spending generated an additional 17,500 jobs in Bay Area business and industry.

* UC Berkeley spending in payroll, goods, services and construction makes it a significant force in the regional economy.
- The campus generates $1.1 billion annually in personal income in the Bay Area.
- For every dollar the campus spends, it generates another 67 cents in spending. In 1998-99, the campus spent $842 million in the Bay Area, generating a total of $1.4 billion in direct and induced spending.
- The campus does business with 2,400 vendors, 40 percent of whom are owners of small businesses.

* UC Berkeley research has a direct impact on the economy of the Bay Area and beyond.
- Funding for research in 1998-99 totaled more than $432 million.
- The largest source of research support is the federal government. Nearly one in three federal research dollars is sponsored by the Department of Health and Human Services.

The report also looked at construction spending and the role it plays in the creation of jobs and new business for contractors and other local vendors. The Berkeley campus is in the midst of major building program focused on seismic rehabilitation and is looking ahead to more student housing and new science and engineering facilities.

Currently, the campus has 98 major projects underway with project costs estimated at $766 million. Upcoming capital projects total an additional $259 million.

The wide range of cultural, educational and community service benefits UC Berkeley provides the Bay Area, including the campus's active role in K-12 outreach, is also examined. Campus spending on outreach has averaged $2.8 million a year, the report said.

Other benefits ranged from Cal Performances and the Lawrence Hall of Science, to intercollegiate athletic events and youth sports programs, to the contributions of thousands of student volunteers involved with Cal Corps, the campus's public service center.

"What you see in these findings, and what is particularly gratifying, is that the enterprise we call UC Berkeley is more tightly woven into the fabric of life in the Bay Area, and especially in the East Bay, than most people may realize," said Chancellor Berdahl.