The meaning behind the numbers of Penn State’s economic impact


by Jodie Dello Stritto

In a March 12th article, Shalin Jyotishi says when universities, especially large flagship research schools like Penn State, tout their massive economic impact, it can harm rather than boost public perception. But, why?

“Universities, particularly large flagship research institutions, generate these figures by tallying up almost every financial exchange driven by the institution–football game traffic, tuition payments, research grant funding, payroll (flagship universities are often among the largest employers in a state), construction costs, and so on. Then, they usually apply “economic multipliers,” a statistical calculation that accounts for the ripple effects of financial transactions,” he writes.

Without context, Jyotishi says, figures appear inflated. “This public relations approach to measuring universities’ “economic impact” produces numbers that make for nice press releases to woo politicians. However, when it comes to public perceptions, they can come across as exaggerated and contribute to growing public skepticism of the value of universities in America,” he continues.

According to a 2019 study, it contributes more than $11.6 billion to the state’s economy and supports over 105,000 jobs directly and indirectly across Pennsylvania. Indeed, a 2019 press release based on the study boasts that for every $1 in state appropriations received by Penn State, the university returns $1.24 in tax payments to the Commonwealth.

Behind these figures are a myriad of resources, programs, initiatives, activities, events and the list goes on, that are contributing to economic development in Happy Valley and Pennsylvania. Jyotishi shares that the Association of Public and Land-grant Universities (APLU), and the University Economic Development Association (UEDA) created a set of definitions and a taxonomy of activities that can be classified as university-based economic development—which can help us to start drilling down into Penn State’s impact. By their definition:

University-based economic development refers to intentional, strategic, and sustained projects that universities undertake within and across three interconnected impact areas. Each focus area is an extension of the three mission pillars of most research universities–teaching, research, and service:

  1. Talent and workforce development
  2. Innovation through industry research partnerships, technology transfer, and startup incubation
  3. Place development, or community development efforts, organized as public service and outreach, community engagement, and Cooperative Extension contributions

When you begin to examine these three areas, Penn State’s massive contributions come into clearer view, even just looking at a small sampling from the much bigger picture:

Penn State campuses across the state awarded more than 14,000 degrees during 2024 spring commencement ceremonies held earlier this month. More degrees will be awarded at December commencement following the 2025 fall semester. Penn State educates more Pennsylvania students than any institution in the state, and 380,000 Penn State alumni—more than half of all Penn State graduates—still reside in the state. In addition, almost 20% of Penn State’s out-of-state and international students stay in Pennsylvania after graduation.

Through a partnership with Penn State, IBM set up a Data Engineering Center of Excellence located at Innovation Park to offer student internships. Interns work with IBM Consulting clients, giving the students real-world experience with a worldwide technology leader to boost their career potential. A partnership with Morgan Advanced Materials is advancing research and development of silicon carbide, known as SiC, a semiconductor material that can enhance a wide range of applications and help fulfill a demand for semiconductors. As part of the agreement, Penn State will house unique, highly specialized equipment that will be accessible to students and researchers and will attract other industry partners.

From Invent Penn State and the Happy Valley Launchbox Powered by PNC to the Technology Center Incubator at Innovation Park and the Penn State Small Business Development Center, the university offers a wealth of resources to both Penn Staters and local residents to support technology transfer, startups, entrepreneurs and emerging businesses.

Penn State Extension boasts more than 320 subject matter experts, 1,500+ events and thousands of articles, publications and fact sheets on an extensive range of subjects, all designed to improve the lives of individuals, communities and businesses. From agriculture, business and broadband access to youth and families, the environment and health, there are lifelong learning opportunities available to local and statewide citizens as well as to individuals around the world who can utilize its digital resources—many of them at no or very low cost.

The university also contributes a wide range of opportunities for local youth, like the educational programs available through Science U and Shaver’s Creek Environmental Center, both part of Penn State Outreach, which connects Penn State faculty and expertise with the community.

Beyond these examples, Penn State plays a lead role in events that define the region, like the Central Pennsylvania Festival of the Arts, and new traditions like the Ironman 70.3 Pennsylvania Happy Valley. Its presence draws alumni back for football weekend visits and to communities like The Village at Penn State to become permanent residents seeking active retirement in their college town.

On top of its enormous economic impact, Penn State is a foundational layer in the fabric of the region, connecting with individuals and communities from Downtown State College to the small towns across Happy Valley who benefit from its agricultural expertise and its tourism dollars. While Penn State’s positive influence extends to communities across Pennsylvania and around the world, it makes Happy Valley the place that it is and is becoming, providing jobs, honing talent, innovating life-changing technology, supporting communities and contributing to the region as a visitor destination and ideal place to live, work and play.


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