Amid a steady stream of dire economic news, new research released Thursday, Jan. 15, shows that Harvard University continues to be a strong stabilizing force for the local economy.
The study by Appleseed, a New York-based research firm, found that Harvard’s impact is as varied as it is vast, attracting hundreds of millions of research dollars to the region, generating thousands of local jobs, and infusing the local economy with $4.8 billion last year alone.
“Harvard, like many of the area’s research institutions, serves as a powerful engine of innovation,” said Harvard President Drew Faust, who offered a preview of the report’s findings on Tuesday (Jan. 13) at a meeting of a group comprised of key business, labor, and civic leaders at the Federal Reserve.
“We are meeting in the midst of an economic crisis that is challenging the relationships between government, business, and labor in ways we have not contemplated before,” Faust said. “I know that if we anchor our efforts in an understanding that our futures are intertwined, we can emerge from this turbulent time with a stronger foundation that will serve the people of Massachusetts and the country well for years to come.”
Appleseed last studied Harvard’s place in the local economy in 2004. Since then, the University has maintained its place as one of the largest private employers in Greater Boston, second only to Massachusetts General Hospital, and it continues to drive innovation, research, employment, and economic growth.
“The scale of Harvard’s investment in research, innovation and quality of life makes it a particularly valuable asset, and provides a competitive advantage for Greater Boston that few other regions, in the U.S. or elsewhere, can match,’’ said Hugh O’Neill, author of the report.
Between 2003 and 2008, employment at Harvard grew by 4.8 percent and today, the University directly employs 18,750 full- and part-time workers. In addition, Harvard’s role as a leading consumer of goods and services in the area supported the equivalent of 9,125 full-time jobs through Harvard suppliers and contractors in fiscal 2008. Overall, the report found more than 51,000 jobs with ties to Harvard.
While approximately 90 percent of Harvard’s $3.5 billion annual operating budget comes from sources outside the Boston area, two-thirds of the University’s budget, or $2.6 billion, is spent locally, the report found. Additionally, through its creation of jobs, spending on purchasing, construction, goods, and services, the spending of students and visitors drawn to the area, and the activities of businesses with roots at Harvard, the University’s overall impact to the local economy in 2008 was $4.8 billion.
“In a global economy it’s increasingly important that a world-class institution like Harvard maintain its role as a major economic engine for the area, creating jobs, providing education, and generating critical research, which can then be commercialized for the regional economy,” said Paul Guzzi, president and CEO of the Greater Boston Chamber of Commerce.
Harvard’s role as a center for groundbreaking study and research continues to infuse the local economy with a wealth of knowledge, talent, and funding, the report said.
In fiscal year 2008 Harvard spent $660 million on research, almost all of which was funded by the federal government and other resources outside the region. In addition, such research often lays the foundation for the creation of new companies, another important source of revenue and talent for the area.
“In the last two years alone, two dozen new Boston-area companies with roots at Harvard have secured more than $280 million in venture capital and other private equity financing,” said Faust.
Because of the region’s robust higher-education sector, Faust said, there is a prevalent “culture of innovation” that acts as “an incubator for future waves of ingenuity.”
“Some of the leading companies we are all familiar with in these [tech and bio-tech] industries — like Biogen Idec and Akamai — can trace their roots to Harvard, MIT, and other Boston universities,” she added.
As one of the world’s top universities, Harvard significantly contributes to the growth of the region’s human capital, each year bringing thousands of outstanding students to the area for undergraduate, graduate, and professional programs. Many of these graduates choose to remain in the area when they begin their careers.
In the fall of 2007, the report said, more than 20,000 students were enrolled in Harvard’s undergraduate and graduate programs. The University’s graduate and professional programs have grown in recent years, with total enrollment increasing by 12.5 percent between 1997 and 2007.
Harvard also supports area elementary and high school students through initiatives such as the Harvard Crimson Summer Academy, a program for high-performing, low-income high school students from Boston and Cambridge. The program brings students to the campus to engage in classes, field trips, recreational activities, and mentoring relationships to help prepare them for a college career. In addition, Harvard students perform hundreds of thousands of hours of community service in the neighborhoods of Boston and Cambridge every year, according to the report.
“The Boston area’s colleges and universities are among the region’s most valuable resources,” said O’Neill. “They are an anchor of economic stability and a vital source of the new talent, new knowledge, new ideas, and new businesses that drive the growth of the Boston-area economy.”