The University of South Carolina has a total economic impact in the state of $ 6.2 billion a year and is responsible for one in nine jobs in the Midlands, but the region faces challenges that prevent its graduates from seeking opportunities elsewhere.
A study by researchers at the Darla Moore School of Business found that the university has an annual economic impact of $ 3.7 billion in the metropolitan Columbia region, although 61.8% of alumni live outside the Midlands.
The importance of retaining graduates is clearly quantifiable: each percentage point increase in the graduate retention rate means $ 14.1 million in new annual economic activities for the Midlands, said Moore School economist and principal researcher Joseph Von Nessen on Wednesday. market.
“First, we have to look at the reasons why the undergraduate retention rate is what it is,” said Von Nessen. “The biggest reason is job opportunities.”
Although SC has overtaken the U.S. in employment growth and other economic metrics from 2010-2019, Colombia has seen only 0.5% employment growth in the past four years, said Von Nessen. The region has also struggled to recover the fastest from the COVID-19 pandemic, with a job recovery rate of 67%, compared with 85% across the state.
“Midlands is one of those regions that has generally lagged behind overall state averages,” said Von Nessen. “The Midlands region has really struggled with the rest of South Carolina in the past decade.”
The reason is twofold. The region does not have the volume of advanced manufacturing industries, such as automotive, aerospace and tires, such as the interior of the state and the lowcountry, and its largest employers are public: the university, which is the largest employer in the region with 43,876 jobs in total (11% of the state’s employment base) and state government.
“Public employment sectors take longer to recover,” said Von Nessen. “This is also a major challenge for the future. Columbia needs a proactive strategy and a proactive effort. “
The university can play a critical role in this effort, said Von Nessen, helping to provide additional opportunities for its qualified graduates and combining those graduates with employers with whom the school has built relationships.
The university’s Office of Innovation, Partnerships and Economic Engagement works to create research partnerships with corporate leaders in advanced manufacturing, artificial intelligence, pharmaceuticals and other industries.
“The growth of the existing industry and new businesses would help keep qualified graduates in the Midlands,” said university president Bob Caslen in an introduction to the report (pdf). “This is critical, as the study concludes, because even small increases in the retention of university graduates can have a significant regional economic impact.”
In addition, the pandemic trend to work from home could benefit Columbia in competition for workers, said Von Nessen, as those with the ability to do their jobs remotely can take advantage of the area’s low cost of living and natural resources. .
“This offers a real opportunity for the Midlands,” he said. “As this phenomenon becomes a professional standard, it means that Columbia becomes more attractive.”
The study defined the total economic impact by the annual dollar value of all goods and services associated directly or indirectly with the university. Four main elements were examined: impact of alumni, or graduates’ salaries on the labor market spent on the local economy; side effects of alumni, or the social benefits of graduates in a local population; university expenses; and university athletics.
Across the state, the university system supports a total of 63,689 jobs, representing $ 2.6 billion in labor income, the study concluded, and is responsible for generating more than $ 202 million in annual tax revenue.
A 2017 study measured the university’s annual economic impact across the state at $ 5.5 billion.
Talk to Melinda Waldrop at 803-726-7542.