HSU’s Economic Impact Surpasses $100 Million for Abilene and Surrounding Area
(Abilene, TX)–According to Independent Colleges and Universities of Texas, Inc. (ICUT), Hardin-Simmons’ economic impact on the Abilene community was $115,661,617 in direct and induced university spending in 2018. Bill Owens, former governor of Colorado, believes that “a strong economy begins with a strong, well-educated workforce,” Most people know that earning a degree boosts one’s potential income, but universities also directly influence their surrounding communities, due to the high amount of spending required to maintain an institution and the increased spending by students who are non-native to the area.
ICUT defines direct spending as “the amount of money spent directly by institutions and their employees, students and visitors,” and induced spending as “the outcome of additional employment and expenditures by local businesses resulting from an institution’s direct spending,” Universities use their income to create more jobs, which in turn draws individuals to the area and creates more spending and economic activity. They then outsource jobs like custodial work and food service, which creates employment opportunities for local businesses in the immediate area.
The Association of American Universities explains that universities “employ thousands of workers, including many students; provide well-educated graduates who acquire high-paying jobs in private industry and the public sector; develop innovative technologies that spark new businesses and start-up companies; and generate revenue that expands the tax base,” This direct spending added up in 2018 to a total of over $67.7 million from HSU, which can be broken down to $26.8 million in employee spending, $21.7 million in student spending, $3 million in visitor spending, as well as $13 million in university purchases and $2.5 million in capital expenditures to expand the university. HSU also devoted almost $48 million to induced spending in 2018.
One study from the National Bureau of Economic Research, entitled “The Economic Impact of Universities: Evidence from Across the Globe,” claims that a university expansion rate of 200% could raise the gross domestic product of the directly surrounding area by 4%. The same study claims that “in the years following World War II, university expansion accelerated in most countries; a trend partially driven by the view that higher education is essential for economic and social progress,” The growth of a university fuels the growth of the local economic climate. They continue to say that “the benefit of universities is not confined to the region where they are built but ‘spills over’ to neighboring regions, having the strongest effects on those that are geographically closest. Using these results, we estimate that the economic benefits of university expansion are likely to exceed their costs.”
With this information in mind, it is likely that HSU’s recent plans for expansion will continue to fuel the local economy in Abilene and the surrounding area.