UA provides $3 billion annual economic impact to Arkansas

The University of Arkansas’ economic impact on the state exceeds “a fairly conservative” $3 billion annually, UA leaders said. They expect the impact to rise as the university continues to break enrollment records.

In a Tuesday (Sept. 10) press conference, UA leaders released an overview of its 2024 Economic Impact Report completed over the past year by the Center for Business and Economic Research in the Sam M. Walton College of Business. Leaders said the full report will be released online in the coming weeks.

The economic impact is up 36.36% from a 2018 report showing the university’s $2.2 billion annual economic impact on the state. The new report is based on 2023 data and comprises workforce development, applied research and innovation, student expenditures, visitor spending, and construction and operations.

The economic impact includes $2.5 billion in recurring operational impacts and $522.4 million in one-time construction impacts. Student spending contributed $569.4 million and generated $17 million in state and local taxes. Visitors to campus and athletic events provided an economic impact of $262.2 million.

Mike Malone, vice chancellor for economic development, said the UA’s $3 billion economic impact supports about 19,000 Arkansas jobs. Its impact comprises $1.1 billion in university operations, which include faculty and staff wages. The UA’s operations contributed over $126 million in state and local taxes.

Also within university operations, research expenditures rose by 20.3% to a record $221.5 million in 2023 from 2022 and up 34.7% from 2021. The university received over $136.8 million in research awards in 2023 as its researchers disclosed 93 inventions, filed 47 new patent applications and were granted 18 patents. Since 2021, the university has invested more than $136 million into applied research facilities.

The UA’s more than 87,000 alumni in Arkansas earned $3.4 billion in wages or 7.4% of the state’s total wages in 2023. They paid $192.2 million in state taxes.

‘UNDERSELLING OUR IMPACT’
Chancellor Charles Robinson said the $3 billion economic impact doesn’t account for the UA graduates working in the state, including the 6,000 students who graduated last year. According to the report overview, the 2023 class had a career placement rate of 93%, and their average starting salary was $60,457. After the press conference, Robinson considered including the UA’s indirect economic impacts for future reports.

“We need to do an analysis of that because I think we’re underselling our impact,” he said. “Even though it’s an honest $3 billion, it’s a fairly conservative $3 billion number. And it sounds impressive, but it doesn’t nearly tell the full story. I think it’s something we need to look at and try to quantify so that we tell a fuller, more honest story about our impact to the state.”

This semester, more than 33,600 students are enrolled at the UA, including a new high for the number of Arkansans enrolled. Both are records for the fourth consecutive year.

“There is no institution in the world that serves more Arkansans than the University of Arkansas,” Robinson said during the press conference Tuesday. “That will always be something that we’ll prioritize as part of our land-grant mission.”

Robinson said the UA’s economic impact is already more than $3 billion because the new report didn’t account for this semester’s enrollment growth.

“We have every indication that we will continue to grow, and just the growth alone in our student body will be part of the way that the economic impact will grow,” he said. “But beyond that, our intentionality and how we invest our resources, how we build out programs, will also have a ripple effect on the state of Arkansas. So, again, we’re proud of this moment, but it’s just a snapshot. There’s so much more to do, and we have every intention to roll up our sleeves and get to work.”

BUSINESS CREATION
The report overview shows that UA’s economic development programs and initiatives contribute to the state in ways beyond the direct $3 billion impact. The UA helped create and expand businesses throughout Arkansas, which generated $733.8 million of economic impact and paid $25.9 million in state taxes.

Since 2019, UA graduates have started 107 active businesses, which support more than 300 jobs and generate an ongoing economic impact of $52.1 million and tax collections of $2.4 million. Since 2020, Arkansas businesses supported by the UA’s World Trade Center have increased or generated new exports worth $191.5 million. The economic impact of the increased business exports was $550 million, supporting more than 5,000 jobs and generating over $19.3 million in state and local taxes.

In 2023, 54 new businesses were created with the consulting services of the UA’s Arkansas Small Business and Technology Development Center. The businesses generated an economic impact of $131.8 million and state and local taxes of $4.2 million while supporting over 570 jobs.

Malone also noted the UA return on investment in state money provided to the university. He said for every $1 the state invested in the UA in 2023, the UA helped generate an economic impact of $13.69. In fiscal 2023, the state provided $220.3 million to the UA. Malone said that, amid continued growth, the next economic impact report might be released sooner than usual. Before 2018, the reports were released in 2014 and 2009.