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Report: CMU contributes $1.5 billion to Pittsburgh each year

Aaron Aupperlee
| Thursday, Aug. 17, 2017, 7:27 a.m.
Carnegie Mellon University's Hamerschlag Hall
Carnegie Mellon University's Hamerschlag Hall

Carnegie Mellon University contributes nearly $1.5 billion to Pittsburgh's economy each year, according to a report CMU released Thursday.

The university is not only an economic driver in the region but also a key player in the transformation of Pittsburgh into a hub for robotics, artificial intelligence and other innovations, the report found.

"CMU's reputation, expertise and talent pipeline in this and other growing fields have made Pittsburgh a prime destination for cutting-edge technology firms and in the process is fundamentally remaking Pittsburgh's brand in the global marketplace," the report stated, adding later, "Pittsburgh now is well-positioned to compete as an innovation hub against other world-class locations because of the concentration of intellectual capital and entrepreneurship activity represented by CMU, and the innovation ecosystem it has helped to foster."

The report, commissioned by the university and complied by the Philadelphia firm Econsult Solutions, tracked day-to-day operations, capital investments, spending by students and visitors and the wages CMU graduates receive.

Source: Impact from Innovation: Carnegie Mellon University's Role as a Local and Global Economic Engine

CMU contributes nearly $2.7 billion to the state's economy and more than $2.5 billion to Western Pennsylvania, according to the report, "Impact from Innovation: Carnegie Mellon University's Role as a Local and Global Economic Engine." The university is responsible for nearly 10,000 jobs in Pittsburgh, 17,250 jobs in Western Pennsylvania and nearly 18,000 jobs statewide.

"Carnegie Mellon University's distinctive strengths in research, education, creativity, and entrepreneurship make it a powerful engine of opportunity, fueled by resources from around the world," CMU Interim President Farnam Jahanian said in a statement. "This report provides further evidence of the symbiotic relationship between the university and its region. Pittsburgh has benefited immensely from the activity of its universities, while CMU needs the region to flourish in order to realize its ambitions."

The report indicated that even though CMU is a nonprofit and doesn't pay property taxes, income, sales and business taxes total $9 million annually for the city and $34 million for the state.

Neighboring University of Pittsburgh says it generates $3.9 billion annually for the state economy and contributes $186.8 million a year in city, county and state tax revenues, according to its 2017-2018 budget report.

CMU has fewer than 14,000 students. Pitt has nearly 35,000 students.

CMU's day-to-day operations generate $1.9 billion for the state, with a majority of that money coming from tuition and research grants. The university receives more than $380 million in research funding each year and draws 86 percent of its students from other states and 43 percent from other countries.

It has been more than decade since CMU studied its impact on Pittsburgh, the surrounding region and the state. Previous reports haven't accounted for the recent surge on campus of robotics, artificial intelligence and other ground-breaking research.

Pittsburgh City Councilman Dan Gilman said CMU is at the epicenter of Pittsburgh's economic revival.

"The local institutions that have been part of the revitalization are critical as we continue to improve in jobs growth, but we also need to make sure that the new economy is for everybody, from the GED to the Ph.D.," Gilman, a CMU alumnus, said in a statement.

In the past five years, the university has helped create 148 startup companies. Startups associated with CMU have raised more than $1 billion in venture capital since 2011 with nearly 75 percent of that going to Pennsylvania-based companies, according to the report. The university has partnerships with more than 350 corporations and has attracted companies like Amazon, Apple, Disney, Facebook's VR wing Oculus, General Electric, Google and Uber to set up shop on or near the campus to take advantage of students and graduates.

The report did not include venture capital funding or revenue generated by startups or companies CMU brought to the region in its final economic impact calculations.

Aaron Aupperlee is a Tribune-Review staff writer. Reach him at aaupperlee@tribweb.com, 412-336-8448 or via Twitter @tinynotebook.

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