March 24, 2011 – A new report by the Bureau of Economic and Business Research (BEBR) concludes that the economic impacts of startup companies at the University of Utah (the U) are “significant and impressive.” The study indicates university startup companies directly or indirectly generated 15,767 jobs, $754.5 million in personal income and $76.6 million in tax revenue in 2009. The full analysis covers 188 companies and invention licenses created since 1970.
“This report shows how important technology commercialization at the University of Utah is to the state economy, and how our efforts are paying off,” says Jack Brittain, vice president for technology venture development at the University of Utah. “Tech Ventures,” as it is known, is a relatively new office at the university. In 2005, the U installed Brittain as the office’s first vice president. In the last five years, the university has spawned 101 startup companies.
Under Tech Ventures, the Technology Commercialization Office (TCO) manages the intellectual property and the commercialization of products based on research from university faculty. The TCO has maintained these efforts since 1967. Commercialization involves patenting technologies developed on campus, licensing them to companies, and facilitating the formation and development of startup companies.
Technology Venture Development commissioned BEBR to measure the impact of technology commercialization from the U on the Utah economy.
“We have always believed that innovation drives economic growth for the state and this report gives us a clear measure of that progress,” Brittain notes.
The BEBR report also validates the U’s recent ranking as the number-one institution in the nation when it comes to creating startup companies based on university research. The U ranked higher than schools like MIT, Columbia and Johns Hopkins to secure the ranking, which is issued annually by the Association of University Technology Managers.
“The University of Utah is widely recognized as a major research institution, receiving millions of dollars in research contracts each year,” the BEBR report concludes. “Many of these research contracts produce licensing disclosures that ultimately result in new companies which contribute to economic expansion in the state of Utah. The economic impacts of university startups are significant and impressive.”
In the report, BEBR economist Jan Crispin outlines the history of technology commercialization at the U and applies standard economic analytics to determine the impact of the school’s startup companies. Highlights from the report include:
- At least 61 percent of all companies launched by the U still have operations in Utah and generate jobs, income and tax revenue for state and local governments.
- In 2009, at least 98 U startups and licensees had employees and operations in Utah. These companies directly employed 5,937 people. In addition to the direct employment, 9,830 jobs were generated by indirect purchases and induced consumer spending, resulting in a statewide employment impact of 15,767 jobs.
- The direct wages and salaries paid to employees of university startups were estimated at $358.7 million in 2009. The indirect impacts of these payments created $395.9 million in earnings for employees in other industry sectors, resulting in statewide earnings of $754.5 million.
- University startups are typically innovation-based and technology-driven, which is reflected in the high average annual wages paid to workers in these companies. In 2009, the average wage per job in university startups and licensees was $60,415, significantly higher than the annual average of $38,052 for all Utah workers.
- In 2009, university startups and licensees contributed approximately $1.2 billion to Utah’s gross state product. Utah’s total gross state product for that year was $112.7 billion.
- University startups and licensees generated a total of $76.6 million in state and local tax revenue during 2009. This includes $61.6 million in state tax revenue and $14.9 million in tax revenue for local governments.
“The economic significance of the research university goes far beyond its role of education and training,” the report states. “For several decades, university research has increasingly formed the foundation of significant technological advancements. These technologies enter the marketplace through research collaborations with industry, licenses, and to an increasing extent, university-driven efforts to turn new ideas into startup companies.”
The Bureau of Economic and Business Research is an applied research center in the David Eccles School of Business at the University of Utah. BEBR interacts with both private and public entities, conducting independent studies and engaging in sponsored research. Learn more about BEBR at www.bebr.utah.edu.