February 9, 2007

C.U. Adds Billion to Local Economy

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Former President Hunter R. Rawlings III commissioned a report about a year ago to examine Cornell’s effect on economic activity in New York State. The results, released yesterday, show the billion -dollar impact the University has had on the surrounding area and the entire state.

The assessment of economic impact is summarized in a 114-page compilation of quantitative and qualitative statistics. The report also reviews how Cornell uses the resources provided by both public and private supporters.

For example, Cornell analyzed its overall spending on construction as well as the location of the vendors and contractors to whom the money was targeted. Of the $1.06 billion it spent on construction in 2005, the report says that 10 percent went to contractors and vendors in Tompkins County, 27 percent to those in New York City and 19 percent to other parts of New York State.

Cornell’s economic impact is not unique. It follows a common trend in relationships that exist between many colleges and universities and their surrounding areas.

“Literature would tell you today that economic development in this country is going to happen around great research universities,” said Stephen Golding, vice president for finance and administration.

The report also shows the increasing number of staff members employed by Cornell. In 2000, Cornell had approximately 15,000 employees. In 2005, Cornell employed almost 18,000 people.

“It is just as important for Cornell that the local region be economically strong and socially and culturally vibrant because that’s what allows us to attract our students. It allows us to attract the next generation of world-class faculty,” Golding said. “There’s a tremendous synergy between the university, the local region and the state in terms of mutual self-interest.”

According to the report, Cornell spent more money on research in 2004 than any other university in New York. Cornell’s $561 million research expenditures also topped every Ivy except the University of Pennsylvania. Stanford spent the most on research in the “Ivy-plus” group, which includes the eight Ivies, MIT and Stanford.

“[The report] helps underscore the fact that Cornell’s contributions to the State’s economy are the product of decades of investment in the institution — both public and private, both intellectual and financial,” President David Skorton said in a press release.

About 29 percent of Cornell’s research spending went to Weill Cornell Medical College in New York City. Overall, Cornell’s spending on the Ithaca campus in 2004-2005 produced about $1.6 billion in economic activity, both directly and indirectly, according to the report. The payroll, purchasing and construction spending also generated 20,600 jobs in the Central New York area, which encompasses 18 counties.

“The community now understands how large higher education is within Central New York, and I think they have a different respect for higher education as an industry,” said Joanne DeStefano MBA ’98, vice president for financial affairs for the University.

“I think it will re-focus some the conversations we have going forward with the local community.”

Weill Cornell produced $965 million in direct and indirect economic activity in New York City in 2004-2005 as well as more than 8,5000 jobs, according to the report. Cornell Cooperative Extension programs served more than 500,000 New Yorkers in 2004-2005. Furthermore, 40,000 New Yorkers utilized CCE programs to volunteer 1.7 million service hours in 2005.

“I think one of the more interesting data points that people did not realize was the impact that Cooperative Extension has on the citizens of the state per the dollars that are provided,” Golding said.

Golding said the assessment is an ongoing project and that the University will be doing another review in another two years.