A recently completed report of The University of New Mexico’s economic impact on the state of New Mexico reveals that one of its major employers is a significant contributor to the state’s economy.

The report, “The Statewide Economic Impact of the University of New Mexico,” looked at four major ways UNM contributes to the New Mexico economy by analyzing university operations, student expenditures, alumni human capital and technology transfer during fiscal year 2017. Combined, these four components produced approximately 24,985 jobs, $3.5 billion in annual employee compensation and $3.1 billion in economic output.

The study, made possible by support from the New Mexico Gas Company, an Emera Company, was commissioned by STC.UNM (STC), the University’s technology-transfer and economic-development organization. Dr. Kelly O’Donnell, research assistant professor in the UNM School of Public Administration, prepared the report. O’Donnell’s expertise focuses on research and analysis of local and regional economic development and economic impact.  

The new study is the first of its kind to quantify the economic contributions of the entire UNM system—comprised of main campus, health sciences campus (medical school, cancer center, hospitals, medical group), and four branch campuses. The study also includes the impact on economic productivity of UNM alumni.

“Research universities are big economic drivers for their communities,” stated UNM President Garnett Stokes.  “The learning and discovery missions that are central to these institutions are interconnected to the mission to drive economic and social prosperity. This report clearly shows that UNM is making a large economic contribution to our state.”

STC CEO Lisa Kuuttila added, “In addition to the economic impact of university operations, student expenditures and alumni human capital, the University has made great strides over the last several years in the area of entrepreneurship and innovation. We are a core component of New Mexico’s innovation ecosystem and an economic driver of high-tech industry in the state.”

The study used an input-output (I-O) analysis methodology, which is based on the theory that regional economies are composed of households, industries, and institutions. Each of these sectors purchases outputs and supplies inputs to the other sectors in an interdependent, complex system, or network. When there is a change in the network, for example in employment, income or productivity in one sector, other sectors connected to it will feel the impact.

Key report findings include the following:

  • 47 percent of UNM’s annual revenue ($1.1 billion) came from out-of-state sources. Revenue originating outside the state produces a direct economic impact.
  • 55 percent of UNM’s annual revenue came from patient revenue through Medicare and Medicaid payments.
  • Clinical operations and general academic instruction are the two largest expenditures in university operations, contributing $2.1 billion in economic output.
  • Spending by non-resident students contributed $78.5 million in economic impact.
  • University alumni represent an investment in human capital because a college degree increases lifetime earnings potential. Fifty-eight (58) percent of UNM’s living alumni (184,000) have a New Mexico address. Each year, UNM alumni earn roughly $2.3 billion more than they would with just a high-school diploma and spent $982.4 million (42 percent of income) on locally produced goods and services and state and local taxes. 
  • Without UNM graduates’ increased earnings and spending, the New Mexico economy would have 7,313 fewer jobs, generate $2.6 billion less in wages and salaries, and produce $933 million less in economic output.
  • In 2017, STC supported the creation of 12 startup companies.  STC currently has 73 active startups, 40 (55 percent) of which are located in New Mexico. Between 2014 and 2017, the number of NM-based, STC-affiliated startups increased from 23 to 40. STC active startups generated 448 New Mexico jobs, $28 million in wages and salaries, and $56.1 million in total economic output.
  • Innovate ABQ’s proposed bioscience business incubator, supported by a $1 million federal grant is expected to create 155 jobs and leverage $2.5 million in private investment.
  • UNM Anderson School of Management’s Business Plan Competition has launched nearly 24 student startups. 
  • UNM Innovation Academy, the University’s entrepreneurial program for students, offers a curriculum and collaborative programs focused on students who are interested in innovation, creativity, and entrepreneurship. The program allows students to create new companies while completing their degree program. Its partnership with STC through the Rainforest Student Pitch Competitions has spun out 29 student startups. Its partnership with STC as co-PIs of an NSF-funded Innovation-Corps program started in fall 2017 to commercialize STEM technologies at UNM has created 4 active student startups. 

Although the impact report focused on how UNM contributes to jobs creation, higher salaries, and workforce productivity in the state, other UNM benefits that improve quality of life could not be measured and monetized. For example, tourism-related activities generated from live performances at Popejoy Hall, lectures, academic conferences and athletic events that attract out-of-state visitors could not be captured with currently available data.

Community service activities and programs offered through UNM that add a great deal to the New Mexico economy, such as law clinics, healthcare clinics and access to art and culture, also could not be measured because UNM currently has no centralized inventory system and no uniform way to assess impact from such a diverse array of offerings. Other benefits to the community from an educated workforce, such as better health outcomes, greater social inclusiveness and civic engagement, and a lower crime rate, were outside the scope of this study, but no less important.