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Southwest Minnesota State University’s Economic Contribution Estimated at over $173 million

Published Tuesday, November 13, 2018

SMSU's Economic Impact Infographic
SMSU's Economic Impact Infographic

Minnesota State, the system of 30 state colleges and seven state universities, today released the results of a study that estimates the annual contribution of Southwest Minnesota State University to the regional economy to be $173,127,685 and 1,421 jobs.

 “Our top priority is the success of our students, and it is important to note that SMSU plays a major role in both the regional and state economies,” said SMSU President Connie J. Gores. “The economic activity generated by our faculty, staff and students touches virtually every corner of our region’s economy, including education, hospitality, child day care serves and retail,” she said.

The study was commissioned by Minnesota State and was conducted by Parker Philips, a nationally recognized consulting firm specializing in economic impact analysis.

“An economic contribution analysis is an objective way to measure the significance of an organization in the regional economy. It is a tool that policy makers can use to inform their decisions,” said Nichole Parker, a principal partner at Parker Philips. “Southwest Minnesota State clearly is a major contributor to the regional economy.”

In the analysis, the study considered the direct spending on operations, pay, benefits and capital projects by SMSU and the estimated increase in demand for goods and services in industry sectors that supply or support the university. The study also measured the effect of student spending and the induced effect of increased household income.

According to the study, a key result of this activity is that SMSU supports and sustains 1,421 jobs, including direct employment by the university, as well as indirect and induced jobs created by supply and equipment vendors, contractors and laborers for the construction and renovation of facilities, and jobs created in the community at hotels, restaurants and retail stores in support of SMSU’s faculty, staff, students and visitors. The study also calculated tax revenues generated by this level of economic activity, including sales, property, personal income and corporate income taxes. The study concluded that SMSU generates about $9,641,842 in tax revenues for state and local government.

The study further estimated the value of the increase in productivity that the degrees awarded by SMSU yield throughout the careers of the graduates. Assuming a 40-year work life, the education received by these graduates will yield additional state income of $8.9 billion (future value, discounted and adjusted to account for such factors as foregone income while attending school and outmigration).

Statewide, all Minnesota State operations, including all seven state universities and 30 community and technical colleges, plus the spending of its faculty, staff and students, had a total statewide economic contribution of $8 billion. This activity generated an estimated 67,717 jobs in the state.

The operations of Minnesota State support or sustain a total of 67,717 jobs, or one out of every 5 jobs in the state; employees of Minnesota State contribute an estimated $116.2 million annually in charitable giving and volunteerism; Minnesota State supports or sustains $1 out of every $42 in Minnesota’s economy; and for every $1 in state appropriation, Minnesota State generates nearly $12 in economic activity.

“These numbers reflect the economic impact of not only SMSU on a regional basis, but also of the Minnesota State system on a statewide basis,” said President Gores.

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