Study Finds Duke's Economic Impact on Durham at $3.4 Billion

Duke University has a $3.4 billion annual economic impact on the city and county of Durham, according to a study of Duke's influence on the local economy.

The latest figures, which cover fiscal year 2006-2007, are up from $3.2 billion determined by a study two years ago, and are 62 percent higher than the economic impact of $1.9 billion when the first such study was conducted 10 years ago.

Duke's Office of Public Affairs, with help from such local organizations as the Greater Durham Chamber of Commerce and the Durham Convention and Visitors Bureau, performed the analysis, which takes place every two years. The study also used information published by state and federal agencies, including the North Carolina Employment Security Commission and the U.S. Department of Commerce.

The basis of the study was the total amount of spending in Durham by the university and its health system for goods and services, the amount of money spent locally by students and visitors, and the salaries and benefits received by Duke employees living in Durham.

"In my more than 30 years in Durham, I have always appreciated that Duke University is an important economic engine for Durham," said Phail Wynn, who is retiring after 27 years as president of Durham Technical Community College and has been serving part-time as Duke's vice president for Durham and Regional Affairs until he becomes full-time on Jan. 1, 2008. "During the past few months, as I have been transitioning into my new position at Duke, I have come to appreciate more fully the extent of Duke's many partnerships with Durham and how much we all benefit economically and culturally from Duke's presence."

The $3.4 billion figure was determined using a standard formula developed by economists to estimate the overall impact of money spent in a community. This approach assumes that every dollar spent in a community changes hands a number of times within that community before it leaves. In conducting the analysis, researchers took a conservative stance, assuming that each dollar spent by Duke changed hands only once. During the latest fiscal year, Duke spent $1.7 billion in Durham, meaning that its overall economic impact was $3.4 billion.

The largest portion of Duke's economic impact is employment-related. As the county's top employer, the university employed 19,755 Durham residents, with salaries and benefits totaling $931 million. Just under half of Duke's work force lives in Durham.

The next largest portion, $426.6 million, comes from spending by Duke students and visitors while in Durham. Another $279 million was spent by Duke purchasing goods and services in Durham, including more than 698 individual Durham companies that do business with Duke totaling $10,000 or more. An additional $77.3 million comes in the form of donations to the community, including uncompensated medical care and support for Durham County Emergency Medical Services and the Lincoln Community Health Center.

"Duke, like other major research institutions, has a dramatic economic impact on its home community," said Duke President Richard H. Brodhead. "I continue to believe that a strong town-gown partnership is key to the success of both the university and the community we call home, and to improving the quality of life we all enjoy. This report illustrates some of the many ways in which Duke and Durham are moving forward together."

The report found that about 15 percent of Durham's workforce is employed by Duke and that, on average, Durham salaried workers were paid $74,662 and hourly workers were paid $42,436.

"As this report so clearly shows, the economic impact of Duke on our community is significant," said Durham Mayor William Bell. "As important as this is to us, we should also remember that the many intangible benefits that Duke brings, such as entertainment, culture and research, also contribute to the quality of life we enjoy as Durham residents."

Compared to 1997, the areas seeing the largest increases in spending were:

-- Employment -- $500 million to $931 million;

-- Purchasing -- $65.5 million to $280 million; and

-- Construction -- $61.6 million to $113.2 million.