Study director Prof. Christian Helmenstein explains: “The University of Bonn achieved roughly 700 million euros in gross value added in 2019, the last pre-COVID year. That represents one out of every forty euros of gross value added generated in Bonn.” One in every 25 jobs in Bonn is also tied to the University. “Beyond its own 7,500 employees, the University of Bonn is also the pillar for almost 10,700 jobs throughout its network of suppliers and service firms. As such, it stands eye-to-eye with the leading publicly traded firms in Bonn, global corporations like Deutsche Telekom and Deutsche Post,” the economist noted. Because its pool of employees features a disproportionately high number of university graduates, the University of Bonn also delivers above-average incomes—an important factor in purchasing power. “The University and its larger ecosystem is involved in one in every 25 euros generated in Bonn,” Helmenstein explains.
The municipal government also benefits from the economic potency of the University, with roughly 300 million euros in taxes flowing from the University's operations. “To compensate for this kind of tax earnings, every citizen of Bonn would have to earn roughly an additional 900 euros per year,” he continues. The economic benefits don’t stop at the borders to the city; with more than half of those directly employed by the University commuting to work, the region benefits massively as well. In Helmenstein's words: “Roughly 2,100 employees from the Rhein-Sieg-Kreis district, which surrounds Bonn, work at the University, representing one fifth of its value added. In this way, the University provides an impressive amount of stability through purchasing power and prosperity beyond its own ostensible prime mission and even its own city limits.”
Economic footprint for the investment work
The University’s running operations are complimented by its active investment policies. Over the past six years it has invested 150.2 million euros (adjusted for inflation), which helps drive steady economic growth in the region—all in what might kindly be called economically challenging times,” says Christian Helmenstein. As such, the contracts from the University of Bonn underpin 1,855 annual jobs at external firms. The economic importance of the University of Bonn's investments can also be seen in analysis of value added that remains within Germany: it measures four percentage points higher than the average for the overall economy. The final tally sees almost 130 million euros of gross added value (adjusted for inflation) contributed to local prosperity.
Economic impacts of a location shift to the city periphery
The Economica team also explored the potential impacts of a shift of instruction for the humanities to the outlying districts of Bonn. Christian Helmenstein explains: “The University is of crucial economic importance not just for the City of Bonn in general, but also for its city center in particular: If those 10,000 students were no longer to congregate in the inner city, but rather in the more peripheral districts, then our model calculations show a loss of 170 jobs and nearly 15 million euros of gross value added, per year.” This would particularly affect art and culture, entertainment and relaxation, retail and restaurants and cafés. And the average age of the inner city’s residential population would climb.
He dashes any hopes that the economic performance would simply shift, but not sink: “While the infrastructure that has grown in the inner city would be affected sharply, the temporary character of the University's activities and the restricted zoning options for development in Bonn's outlaying districts mean that we cannot count on a comparable emergence of service options. We're looking at a predictable regression in the inner city as well as what will likely be only rudimentary positive development further out.”
Further information:
https://uni-bonn.sciebo.de/s/F4ILh1j3poPRPck (Full text, in German)
Media contact:
Prof. Dr. Christian Helmenstein
Phone: +49 176 2386 1908
Email: christian.helmenstein@economica.eu
Prof. Dr. Andreas Archut
Phone: +49 228 737647
Email: andreas.archut@uni-bonn.de