Distributed May 23, 2000
For Immediate Release
News Service Contact: Kristen Cole

$400 million a year in R.I.

New study describes Brown’s economic impact in Rhode Island

An independent study has measured Brown’s economic impact on the R.I. economy at nearly $400 million in 1998 – 1.4 percent of the gross state product. The study was released during a University ceremony Tuesday, May 23, 2000.

PROVIDENCE, R.I. — Beyond its role as an internationally respected institution of higher learning, Brown University is an engine of economic growth in Rhode Island, according to an independent study released today (Tuesday, May 23, 2000).

Brown’s economic impact on the state was nearly $400 million in 1998. More than half of that – $220 million – was in salaries and wages. With 3,300 regular employees, the University is Providence’s second-largest private employer and one of the largest in the state.

Released at a reception to celebrate Brown’s role in Providence, the new study, titled Partners for the 21st Century: Brown University’s Economic Contributions to Providence and Rhode Island, was commissioned by Brown’s Office of Public Affairs and University Relations in January. It was produced by Appleseed Inc., an economic development consulting firm based in New York City.

“Clearly, Brown makes a significant economic contribution to our city and our state. But for every statistic we can quote, there are scores of intangible aspects to this relationship that are equally impressive,” said Laura Freid, executive vice president of public affairs and University relations. “The cultural, intellectual and social life of our city and state is enhanced by Brown’s many exhibits, performances and public lectures, and our community life is bolstered by the extraordinary volunteer service performed by our students.”

Editors: Copies of the report and a summary are available from the News Service.

Brown contributes to state and local economies in various ways. The University contracts with local builders to construct new classrooms and labs and renovate older buildings, purchasing goods and services from local providers. Brown faculty and staff buy homes and fuel the local economy with their purchases of groceries, health care and other services. Research leads to advances in science and fuels new industries and companies. Commencement Weekend and other special events attract visitors who stay in area hotels and dine in local restaurants. Students often remain in the Ocean State after they graduate to become leaders in the state’s corporations and nonprofit institutions.

Examples detailed in the report include:

Brown as enterprise and employer

  • In 1998-99, 68 percent of the University’s total spending, or $227 million, was concentrated within the state.

  • About 81 percent of Brown’s regular employees live within Rhode Island; 38 percent in Providence. The state income taxes withheld from the salaries of Brown employees, combined with state disability insurance premiums and payments for unemployment insurance, totaled $7.4 million in 1998.

University, student and visitor purchasing

  • Brown purchased more than $65 million in goods and services from Rhode Island companies in 1998. Included in that were $30.4 million in goods and services provided by Providence companies – about 21 percent of all University purchasing – and an additional $35.4 million in purchases from vendors elsewhere in the state, or 25 percent of Brown’s total purchasing.

  • During the last five years, Brown has spent an average $29 million per year on the construction of new facilities and renovation of existing buildings. Construction spending is expected to increase to an average $40 million per year during the next five years.

  • Brown students spend nearly $24 million each year, while visitors to the University spend an additional $3 to $4 million on lodging, meals, entertainment and other services.

Impact on output, wages, and employment

  • Wages Brown pays to Rhode Island residents, as well as payments to Rhode Island vendors, produce a multiplier effect – the payments that those vendors make to their own local suppliers and routine spending by University and vendor employees on housing, groceries, health care, and other services they buy within the state.

Research at Brown: building intellectual capital

  • With research spending totaling $74 million in 1998, Brown was the state’s leading academic research center. It is a leader in such diverse areas as computer graphics and visualization, man-made machine systems, material science, planetary sciences and brain science.

Promoting healthy communities: The School of Medicine

  • More than 1,700 physicians – more than half of all those practicing in Rhode Island – are members of Brown’s clinical faculty. Brown educated 232 physicians currently practicing in the Ocean State and provides continuing medical education for 3,000 others annually.

  • School of Medicine residents at Brown-affiliated hospitals provide the bulk of uncompensated care in the state, saving Rhode Island a substantial financial burden.

Rhode Island’s human capital: investing for the future

  • The quality of a city or region’s human capital – the accumulated knowledge and skills of its people – is one of the most important determinants of economic growth and development. Brown helps develop the state’s human capital by educating Rhode Island residents and by attracting students who remain in the state after graduating.

  • Nearly 6,800 Brown alumni call Rhode Island home; 118 are CEOs of Ocean State companies.

Nurturing the new economy

  • Brown is helping Rhode Island develop the infrastructure of information and communications technology required to support the new economy. For example, the University helped develop the Rhode Island Network for Education Technology (RINET) – a non-profit Internet service provider that brings the resources of the Internet to the state’s schools.

  • Brown supports the development of new businesses in Rhode Island by licensing and supporting the commercialization of technologies developed by University researchers. Faculty members have also played a leading role in the creation of new businesses, such as Cell Based Delivery and MultiCell Associates.