19 Sep Impact of research park firms pegged at $680M
Madison, Wis. – Almost everybody knows the University of Wisconsin-Madison stimulates the local economy by generating high-tech spin-off companies. But a new study has produced figures to back that assertion.
Many of the 114 companies housed in the University Research Park, located three miles west of campus, are developing products based on university research. And the concentration of these innovative firms, according to the study, has had a significant impact on the surrounding area.
In aggregate, the companies contribute more than $680 million to the economy annually, support 9,100 jobs, and generate state and local tax revenue of more than $46 million each year, according to the findings.
“The goal [of the study] was to get on paper a definitive analysis of exactly what the overall financial impact of the park and its tenants and companies really is,” explained Mark Bugher, director of the URP. “There are anecdotal stories about the extent to which the research park has an impact in this community, but we wanted to get it in black and white and be able to crystallize it in one easy document.”
The more than a half-billion dollars in economic contribution was “frankly surprising to me,” Bugher said. “We are pleasantly surprised and happy with the economic impact that the park makes to the community and the state.”
Dennis Winters, VP of NorthStar Economics, Inc., a Madison-based private consulting and research firm, directed the study using data collected from park companies and through proprietary economic impact models.
“What stands out is the educational attainment of the workforce in the research park and their earnings,” Winters said. “There is a highly concentrated brain trust right here.”
According to the study, 48 percent of URP company employees hold bachelor of science degrees and a separate 44 percent hold advanced degrees.
URP, a 255-acre non-profit research and technology park established in 1984, has 34 buildings with more than 1.5 million square feet of office and laboratory space used by a broad range of start-up companies, many of which are focused on biotechnology.
The study found that the total annual payroll of park companies is more than $260 million, or an average salary of $62,000 a year for the 4,155 employees. That compares favorably to the state and county averages of $35,500 and $39,000, respectively.
The study concluded that more than $170 million of the payroll spending by park companies remains in Wisconsin communities after federal tax deductions and other non-local spending is taken into account.
According to the study, park companies spend more than $122 million each year on Wisconsin goods and services, which has supported the creation of more than 3,600 new jobs at firms that provide goods and services to companies in the park.
Spending by URP company employees also has created new jobs, including approximately 1,300 in Dane County, where the park is located. For every job created by a URP company, the study said, another job is created elsewhere as a result.
The spending of park employees and entities that provide goods and services to park companies also contributes to the economy. For every dollar spent by a company in the park, the study indicated, another $1.47 of economic impact is created as a result.
Employees of park companies pay more than $8 million in state income taxes, nearly $6 million in sales taxes, and $11 million in local property taxes. URP itself pays almost $3 million a year in local property taxes, and the jobs created by URP-related spending generate an additional $18 million in state and local tax revenue.
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