UCLA: The Economic Engine
By Jack Feuer and Anne Pautler
Published Oct 1, 2013 8:00 AM
A public university can be a powerful engine for growth and a superb investment for taxpayers. A new analysis details UCLA’s deep and wide contributions to the economies of Southern California and the state.
Ask any person on the street about UCLA and they probably will talk about the university’s world-class academic environment, its groundbreaking research, or its high-quality health-care services and volunteer engagement with the community. Much less known is the university’s role as a critical — and powerful — source of economic growth for Southern California and the state.
“UCLA is an incredible engine for our city and state,” says Los Angeles Mayor Eric Garcetti. “Not only does UCLA generate more than $12 billion in economic activity, it also produces some of the smartest and most creative alumni in the world.”
According to a new study called “Economic Impacts of the University of California, Los Angeles,” commissioned by UCLA and conducted by the Sacramento-based Center for Strategic Economic Research, the university’s contribution to the regional and state economies in the 2011-2012 fiscal year remained strong even as the state’s contribution to UCLA’s operating revenue has shrunk from more than 35 percent three decades ago to approximately 7 percent today.
UCLA makes a direct contribution to the regional and statewide economies through the spending and jobs supported by its academic, administration, research and health-care activities. But the institution also generates a multiplying “ripple effect” that leads to an even larger impact in the economy as a result of demand on suppliers of goods and services as well as employee spending.
The university directly employs some 42,000 people, including staff, part-time student workers and faculty. But UCLA also indirectly generates 53,000 jobs in Southern California and another 8,000 jobs statewide, generated by purchase of goods and supplies from vendors and general spending by university employees.
Overall, UCLA is one of the top five employers in the five-county Southern California region (San Diego, Los Angeles, Ventura, Orange and Riverside).
UCLA's Economic Impact:
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Figures showing the fiscal impact of UCLA.
Also adding to the university’s contribution to the health of the Southern California economy is the $1.8 billion in taxes UCLA pays annually and, through the ripple effect, the $12.7 billion in economic output it generates in the region.
In fact, for every $1 that California invests in UCLA, the state receives $34 in economic output.
UCLA’s integration of education and research also fosters innovation, enhances technology transfer and creates a number of other beneficial outcomes. In the fiscal year the report looked at, more than $1 billion in public and private grants were secured by UCLA to sponsor cutting-edge research. Close to 140 start-up companies begun at UCLA remain active. In all, UCLA’s contribution to this area of entrepreneurial growth totals more than 4,400 jobs and $1.1 billion of output.
“I see UCLA as an anchor tenant for the Los Angeles community,” says Michael Kelly, executive director of the Los Angeles Coalition for the Economy & Jobs. He adds that “when you look at the university’s return on investment, it’s extremely significant. We all know the ROI on a good education is unlimited, but when it comes to overall economic input, [UCLA’s] return on investment statewide is enormous.”
To see the complete report prepared by the Center for Strategic Economic Research, visit http://ucla.edu/economic-impact.
The Innovation Factory
Another way UCLA is an economic engine is technology transfer. Start-up companies formed around UCLA discoveries benefit California and beyond.
A New Tool for Dentists
UCLA inventor and dental Professor Wenyuan Shi uses cell signaling to target the bacteria that cause tooth decay — without harming beneficial mouth bacteria. The proprietary technology he developed is licensed by biotech company C3 Jian, Inc. They have an office in Marina del Rey with 35 employees, with another 12 stationed in China.
Less Energy to Produce More Drinking Water
Converting salty water to drinking water is an expensive process because it involves so much energy. NanoH20, Inc., based in El Segundo, licenses UCLA’s proprietary formula for a nanoparticle layer in its water-filtering membranes; the technology makes the filters more efficient. The company already has installations in California, Spain and the Caribbean.
The Ripple Effect
Behind every number, of course, there is a human being. And thousands of people create a UCLA ripple effect on the local, regional and state economy. Individual employee spending, campus purchases and indirect impacts all play a role.
Tomasa Rosales works in donor relations for UCLA. Her career in Westwood began in parking services and includes stints in health sciences. Like many UCLA employees, her home is some distance from campus, in Westchester. She shops for her family: her husband and two children who live at home. “On weekends, I’m mostly in Westchester, Inglewood and Culver City,” she explains. “I do go to the San Fernando Valley once a month to shop for meat at a Latino grocery chain.”
Castle Press is one of many small businesses that supply UCLA with goods and services. They are one of the university’s authorized printers and provide such services as an online ordering system for stationery items such as business cards. Based in Pasadena, Castle Press is owned by Susan Kinney, who notes that “the Los Angeles Business Journal has recognized us for the past five years as one of the 100 largest woman-owned businesses in L.A. County. UCLA has been a valued customer literally for decades.”
Anacapa Micro Products, Inc. is another small business supplier. “We collaborated with UCLA’s Department of Earth and Space Sciences on their data center: servers, components, racks, cooling equipment,” explains account representative Geno Hammer ’08. Anacapa also procured large-screen televisions for UCLA Housing Services. Based in Ventura, Anacapa employs about 25 technical and office workers.
Direct and Indirect Spending
Luke Palmo ’82 is neither a UCLA employee nor a supplier. But as executive vice president of Coldwell Banker Commercial WESTMAC, he’s a firsthand observer of the ripple effect. “When UCLA leases office space, the landlord gets rental income, the brokers get commissions, attorneys finalize the documents and, more often than not, architects and contractors get paid to refurbish or upgrade the space,” Palmo explains. In 2011-12, UCLA had more than 200 active leases.