The Impact of the University of Portsmouth on the Local Economy

Abstract

This study measures the local impact using various detailed databases which allow more accurate measurement of, for example, the amount the University spends in the local economy rather than elsewhere. In order to assess the total (i.e. direct, indirect and induced) effects of direct University spending, an input-output table was constructed. This table is not based on the more usual non-survey approach, but on direct information on sales, imports and exports which were collected through survey work. Thus, it is argued that the present estimates provide more accuracy than has generally been possible in other studies. Using these various databases, it was estimated that in 1994/95 total expenditure by the university sector in the local economy amounted to £38.5m. This direct expenditure was estimated to result in an output multiplier effect of between 1.24 and 1.73, although it is argued that the higher (type 2) multipliers are more likely to reflect the full impact of the University. In terms of employment, between 1029 and 1490 jobs are dependent on the university sector, in addition to the 1885 directly employed by the University. Thus, in the absence of the University it is estimated that the local economy would employ something like 3375 fewer people.