Universities contribute an estimated 14.2 billion euros to the Finnish economy
The impact of Finnish universities on the national economy has been evaluated. The universities’ activities are annually linked to EUR 14.2 billion gross added value of the Finnish economy. The University of Tampere’s (UTA’s) share of the gross added value was nine per cent, which translates into 1.3 billion euros every year.
Among other things, the data used in the evaluation included information on the universities’ finances, the commercialisation of research results and the numbers of students and graduates.
UTA has an effect on 11,600 jobs
UTA’s share of the gross added value of universities, nine percent, equals 11,600 jobs.
A euro invested in UTA produces thirteen euros in return for the Finnish economy. One job directly created by the University had an impact on the creation of at least five jobs elsewhere.
UTA’s share of the impact mainly consisted of the benefits created by education and research such as the fact that university-educated employees earn more during their careers than other employees do. The share of this so-called graduate premium was EUR 0.4 billion of the gross added value created by UTA.
According to BiGGAR Economics, which undertook the evaluation, UTA’s effect on business operations and innovations and its share of knowledge production benefitting society is EUR 0.3 billion. UTA’s research on medicine and health sciences was estimated to produce EUR 57 billion of the gross added value.
Tampere would not have grown without universities
“The University of Tampere has a large economic footprint,” says Markku Sotarauta, Professor of Regional Development Studies.
“However, the role of universities is not limited to economic volume or the production of new knowledge and competences, licensing and patenting innovation or the creation of new entrepreneurship,” he continues.
“The University of Tampere draws in knowledge and skills from elsewhere and helps to apply knowledge that has been produced elsewhere to local conditions. The University also has a significant role in exposing, redirecting and translating existing but thus far unknown or unconscious local information into a dialogue and activities that shape the future,” Sotarauta adds.
“It is clear that the City of Tampere would not have become such a growth centre without its universities. A growth centre is a place where people and enterprises are willing to invest their own activities and money. The University is both building the future and creating faith in it,” Sotarauta says.
The total funding of universities is EUR 2.7 billion
In 2016, Finnish universities were funded by about EUR 2.7 billion and they employed a total of 32,000 people. Via various chains of production, the universities’ operations and their personnel as consumers increase national economic activity.
Globally, 155,000 jobs are either linked to or maintained by the operations of Finnish universities. 88 percent of the jobs are created within the Finnish national economy, which equals about EUR 14.2 billion or 136,000 jobs.
EUR 14.2 billion corresponds to about 6.6 percent of the Finnish economic output, and 136,000 jobs equals about 5.5 percent of the employed population.
Decreased funding reduces the economic impact
In the evaluation, the main sources of impact were identified as the core activities of the universities, the students’ activities, the business and innovation support that the universities provide, and the graduate premium. Other smaller sources include health benefits and tourism.
In addition, through their staff and students, universities have many other impacts on society, such as renewing the Finnish cultural heritage, which are not measurable in euros.
The study also considered how the universities’ economic contribution might be affected if the public funding of universities was altered. According to the evaluation, funding cuts might produce a disproportional influence on the economic impact. Short-term funding cuts could diminish the economic impact to the extent that it nullifies the original savings.
Universities Finland UNIFI commissioned the evaluation together with the Confederation of Unions for Professional and Managerial Staff in Finland (Akava), Confederation of Finnish Industries (EK), Association of Finnish Independent Education Employers (AFIEE) and the National Union of University Students in Finland (SYL). The Scottish BiGGAR Economics Ltd conducted the study.