Economic Impact

Monetary effects beyond research and teaching

Demonstrating the economic importance of culture, education, and research has become increasingly critical in political debate to justify the allocation of public funds. We have built original methods of regional economic impact analysis to help sponsors of these institutions to rigorously assess their direct regional economic added value for demand, value added, the labor market and public tax revenues. The State Conferences of Universities in Baden-Württemberg, North Rhine-Westphalia and the Free State of Thuringia have commissioned us to evidence that, apart from the undisputed importance of cuture and education, ther institutions generate additional and immediate economic effects that other uses of public funds can hardly achieve.

New methods for inclusive impact modeling

We have successively developed the basic method of regional multiplier analysis further in order to integrate not only the expenditure of universities, their students and employees, but also the effect of the higher academic qualification of alumni (regional education premium) and the effect of knowledge transfer through university start-ups into an aggregated model. Overall, this expenditure increases the demand for goods and services, value creation and the number of jobs within an economic region. They also stimulate regional economic multiplier effects, as university-related expenditure also increases indirect and induced demand and value creation among upstream producers and suppliers.

Baden-Württemberg

With over 80 universities, Baden-Württemberg's higher education landscape is extremely diverse. The nine public universities play a prominent role in this context. In 2022, they had a total of 2.9 billion euros in state funding at their disposal. By attracting third-party funding, attracting students, qualifying graduates and supporting business start-ups, they generated a value-added effect of 7.7 billion euros in the federal state. This equates to an increase in the value added effect to 4.98 euros for each euro that the universities spent from state funds in net terms. In addition, they were able to continuously increase this positive effect on the state economy compared to previous years in 2012 (2.30 euros) and 2018 (4.65 euros). Universities are indispensable, outstanding players not only for long-term technological, cultural and social development, but also for the short-term economic development of their region.

Mannheim Philharmonic Orchestra

In the public eye, cultural performances primarily contribute to creating an educational and entertainment offering that enriches the quality of life and experience of cities for their citizens. The Mannheim Philharmonic Orchestra also makes an important contribution to the cultural offerings of the city of Mannheim, to the musical education of children and young people and to the promotion of excellent young talent in orchestral music. In addition to its cultural and educational function, the orchestra's work also promotes the city's economy. In the 2021/2022 season, the annual expenditure of the orchestra company and the consumer spending of out-of-town concert guests in the catering, retail and hotel sectors amounting to €2.063 million generated a total gross value added effect of €1.473 million in the city of Mannheim alone. This means that orchestra operations generate additional income for the city treasury amounting to 5.6 times the cultural funding provided by the city.