Deep Impact


By Cynthia Lee

Published Oct 1, 2007 8:00 AM

UCLA accounts for almost $10 billion in economic activity in California, and the number rises every year. The latest statistics prove it: The university is one of the Golden State's most potent growth engines.

Shelley Brown is typical of many faculty and staff who support local businesses. This financial manager for the UC Police Department and former president of Staff Assembly frequents Westwood restaurants sometimes three times a week, shops at Ann Taylor Loft and occasionally drops in at Ralphs Fresh Fare and CVS/pharmacy.

Each month, UCLA Housing supervising buyer Patricia Reyes helps purchase about $20,800 in fresh produce destined for meals at the dining halls. That money trickles down into the pockets of produce distributors, transport firms, agricultural companies and farm workers all over the Greater L.A. area and the Central Valley.

Campus departments pay around $333,000 a month to local businesses that provide clerks, receptionists, analysts and light-industrial workers on a short-term basis.

Slices of economic activity like these make up a giant loaf of "bread" that feeds the Greater L.A. economy. By all accounts, that bread has been rising like super yeast over the last 16 years since economists began measuring UCLA spending and its impact.

In 2005-'06, according to the latest report released in April, that loaf was worth more than $3.9 billion, money that the campus, its 27,124 employees, 36,611 students and more than 2 million visitors spent in the five-county Southern California region.

Adding to the university's economic might were two other factors: 42,000 full-time permanent jobs created in the region by the money the UCLA community spent and $1.2 billion that UCLA paid in local, state and federal taxes. All told, university-related activities in 2005-'06 generated an economic impact of a staggering $9.34 billion or more in the Southern California region — $9.89 billion statewide.

Providing the big ideas that fuel this economy are UCLA researchers, who generate both income and jobs. In 2005-'06, its researchers received more than $810 million in new research grants and awards. The campus earned nearly $19.5 million in royalties and fees from the licensing and commercialization of its inventions.

"The university is an enormous economic engine in Southern California," says Gregory Freeman, lead author of the recent report and vice president of economic and policy consulting at the private nonprofit Los Angeles County Economic Development Corporation. "That fact often gets overlooked because the economy in Southern California is simply so big — the 15th largest economy in the world. That's just behind Mexico (13th) and Russia (14th)."

The heft of UCLA's impact becomes clearer if you look at it from a different perspective, Freeman suggests: What if UCLA were to suddenly move to the Midwest?

As the seventh largest employer in the region, the campus would immediately leave 27,000 people jobless. After six months, another 42,876 jobs would disappear. "These jobs belong to people whose livelihoods are supported by the purchases that UCLA, its employees, students and visitors make," Freeman notes.

For every dollar taxpayers invest in UCLA, the university generates almost $15 in economic activity. With state funding of the university dwindled down to 17.4 percent in 2005-'06 from 22 percent three years ago, "it really means that UCLA is doing something amazing with the money it receives from the state," Freeman adds. "Given the amount of money the state contributes to UCLA and the overall economic impact generated by the university, UCLA looks like a pretty spectacular investment for the state."

Yet state support continues to be critical to the university, which cannot function without it. By leveraging state support, the university can obtain private and federal dollars to cover costs that the state cannot afford to pay for, explains Assistant Vice Chancellor Keith Parker of Government and Community Relations.

"You can't get a donor to pay UCLA's light bill or custodial services," he says. "State dollars support the infrastructure of this campus. Our federal and private dollars are then able to support high-end research and other projects that are important to this university, but are beyond the reach of the state."