FY15 Report: Penn’s Economic Impact on Pennsylvania and Philadelphia Tops $14 Billion |
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March 01, 2016, Volume 62, No. 25 |
The University of Pennsylvania recently released a report demonstrating a combined economic impact of the University and Penn Medicine of more than $14 billion on the state and citywide economy in fiscal year 2015.
The independent report, conducted by Econsult Solutions, Inc. of Philadelphia, shows that in fiscal year 2015, Penn contributed $14.3 billion yearly, or $39 million per day, to the economy of the Commonwealth of Pennsylvania, and $10.8 billion, or $29.6 million per day, to the City of Philadelphia. According to the Econsult report, $1 out of every $20 in Philadelphia’s general fund and one out of every nine jobs in the Philadelphia economy are generated by Penn.
“The University of Pennsylvania and its Health System are an innovating force for good in Philadelphia, our region, society and the world: advancing creative knowledge, making impactful discoveries, sustaining health and educating great new leaders,” said Penn President Amy Gutmann. “As Philadelphia’s largest private employer, Penn provides 37,000 stable jobs with good wages and exceptional benefits. Penn powers key sectors of our regional economy while contributing in manifold ways to making Philadelphia a thriving and exciting place to live, work, study and visit.”
Using data from the University and Health System’s financial statements for fiscal year 2015, the report illustrates Penn’s role as a powerful economic engine in the region, especially as a major employer; campus developer of significant capital projects, research and innovation; and as a purchaser of goods and services.
Highlights of the report:
• Directly and indirectly, Penn generated 90,400 jobs in 2015. As the second-largest private employer in Pennsylvania, Penn directly employs 37,000 people. In addition, 53,400 individuals are indirectly employed through the construction-related industries, professional services, retail and manufacturing industries through Penn’s activities.
• Penn’s capital spending in new buildings and renovations, and that of third party private real estate development, was $932 million in the local economy for fiscal year 2015. This employed 10,300 Pennsylvanians in construction-related jobs. Of all on-campus construction jobs (for projects totaling $5 million or more), 35 percent employed minority- and women-owned businesses and 26 percent of all contracts went to minority- and women-owned businesses.
• In fiscal year 2015, Penn attracted $939 million in sponsored research funding from government grants and other sources stimulating job creation and spending in the local economy. As a preeminent research institution, Penn is consistently among the top five recipients of federally sponsored research dollars.
• The statewide impact of Penn’s purchasing of goods and services was $572 million in fiscal year 2015. Locally, $344 million of spending was with Philadelphia-based businesses, $122 million with West Philadelphia-based businesses.
• In fiscal year 2015, ancillary spending by Penn students, patients and visitors to campus was $279 million on local goods and services such as trips to restaurants, shops, collegiate athletic events and visits to cultural attractions. In addition to generating jobs, capital, operational and research dollars, Penn attracts private and public investment and development and bolsters the state and local tax base through wage tax, earned income, business, sales and use and real estate taxes generating $272 million in state taxes and $197 million in City taxes.
The report also details substantial support in West Philadelphia, where the University’s investment in neighborhood services includes supplementing municipal services such as safety, public space management, workforce development and homeownership programs, and retail development.
The University’s commitment to local engagement programs and its partnerships and programs providing services and support to public education in Philadelphia include an $800,000 contribution annually to the neighboring Sadie Tanner Mossell Alexander University of Pennsylvania Partnership School, expertise from Penn’s Graduate School of Education and a $1 million dollar annual investment by Penn’s Netter Center for Community Partnerships providing initiatives such as tutoring and health and nutrition programs to public school children across Philadelphia.
The FY2015 Economic Impact Report paints a broad picture of the University’s wide-ranging and deep impact on the state, city and region’s economic development and prosperity.
The full report is available at http://www.evp.upenn.edu/pdf/Penn_Economic_Impact_Powering_PHL_PA.pdf
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1 All data in this report is from Fiscal Year 2015, unless otherwise noted.
2 Every dollar spent creates a multiplier effect as Penn’s own employees spend their earnings in Philadelphia and Pennsylvania. Similarly, Penn’s vendors, suppliers and contractors meet the demand of their contracts with Penn by adding jobs and providing supplies, which in turn creates more earning and spending. Together these are categories of defined economic activity known as direct, indirect and induced. Direct: Jobs from Penn’s payroll. Indirect: Jobs created by vendors, suppliers and companies who have contracts with Penn, and who hire staff to service those contracts. Induced: Jobs created within the larger economy resulting from Penn’s direct spending on wages and services that leads to additional spending by individual workers and companies.
3 Categories of tax revenue include earned income, business, sales and use, real estate and others. |
What is the IMPACT of Penn being a large and stable employer?
Penn is the largest private employer in the city and second in the state, generating a workforce impact from its more than 37,000 individuals directly employed. Additionally, there are over 53,400 indirectly employed from within the region. These people work within the supply chain of private companies servicing Penn with a range of necessary goods and services such as medical instruments, office supplies, maintenance, construction and food—to name a few—or in induced jobs needed to service these commercial enterprises.
• $6.4 billion in salaries and wages in Pennsylvania
• $163 million in earned income tax revenue in Philadelphia
• $181 million in earned income tax revenue in Pennsylvania
What is the IMPACT of Penn’s purchasing of goods, supplies and services?
To maintain its wide-ranging operations, Penn is a large-scale purchaser of goods and services. Channeling purchasing capacity to minority and women business owners in West and Southwest Philadelphia, and across the entire city, has long been a commitment to fostering local engagement.
Driving the Philadelphia economy through socially responsible purchasing and procurement is the Supplier Diversity Program, which deepens Penn’s supply chain by including vendors in Philadelphia and Pennsylvania that directly infuse millions of dollars into the local economy.
• $572 million spent with Pennsylvania- based businesses
• $344 million spent with Philadelphia-based businesses
• $122 million spent with West Philadelphia-based businesses
What is the IMPACT of Penn’s student and visitor spending?
Students, patients and visitors to Penn spend millions on local goods and services such as renting off-campus apartments, apparel, food and beverage, entertainment, books and supplies, as well as hotels, meetings, sporting and cultural events. A primary benefactor of this ancillary spending is the successful commercial district that Penn develops and manages, and the tax revenue it generates.
• $246 million spent by students
• $26 million spent by visitors $7 million spent by visitors to Penn hospitals
• 2,065 Philadelphia jobs paying $74 million in wages
• 2,465 Pennsylvania jobs paying $85 million in wages
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