Every euro of annual budget that flows from the state of North Rhine-Westphalia to NRW state universities multiplies into four euros. That is the core finding of a study report presented in late August to Culture and Science Minister Ina Brandes by the Rectors’ Conference in NRW (LRK NRW), prepared by the Geographical Institute of the University of Heidelberg. The findings in detail: In 2019 the state spent approximately 3.2 billion euros on its universities. According to the study, these universities generate nearly 13 billion euros of economic value, amounting to 1.5% of total gross value creation by the state of North Rhine-Westphalia. The universities are responsible either directly and indirectly for over 175,000 jobs within the state, paying 12.3 billion euros in salaries and wages to employees, which they in turn spend, flowing back into their local economies.
As a spokesman for the Rectors’ Conference in NRW, University of Bonn Rector Prof. Dr. Dr. h.c. Michael Hoch commented: “The figures presented in this transparent study reveal impressively the major impact that the state’s universities and other higher education institutions have on the economy of NRW. For every euro of budget funding provided by the state of North Rhine-Westphalia, we generate four euros. That is incredible—a tremendous investment that is surely one of the best.”
A large footprint within the city ... and the region
In another study, the Economica Institute measured the economic footprint of the University of Bonn within the region, taking into account the institution’s 33,000 students and 7,500 employees. This footprint is indeed large, as one out of every twenty-five jobs in Bonn is connected to the University, which generates one fortieth or 2.5% of the city’s total gross value added. Noting that the University of Bonn created approximately 700 million euros in gross value in 2019, the last pre-COVID year, study director Prof. Dr. Christian Helmenstein explains: “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. “That puts the University on par with the city’s leading DAX-listed global corporations, Deutsche Telekom and Deutsche Post.” Because a particularly high percentage of its staff are university graduates, he suggests, the University of Bonn also delivers above-average incomes—a key factor in purchasing power.
The University contributes to purchasing power and prosperity
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 generate the same amount of tax revenue, every citizen of Bonn would have to contribute an additional 900 euros annually in taxes and contributions,” observes Professor Helmenstein. Nor does the economic boost stop at the city limits, for the surrounding area benefits tremendously too from those who commute to work—more than half of all directly employed workers. 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.”
In addition to University operations, investment spending has positive impact as well. Between 2015 and 2020, the institution invested 150.2 million euros (adjusted for inflation), which contributes to economic stability and growth in the region—despite these economically challenging times,” says Christian Helmenstein. Expenditures for leased facilities, new buildings and renovations plus goods procurement paid for 1,855 jobs at external companies.
Economic impacts of a location shift to the city periphery
The team at Economica also analyzed the effects of moving humanities classes and faculties to the periphery of Bonn, as some stakeholders in the city have called for despite opposition by the University. Professor Helmenstein elaborates: “The University is of crucial economic importance, not just for the City of Bonn in general, but also for its city center area 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 sharply impact art and culture, entertainment and recreation, retail and hospitality. And the average age of the inner city’s residential population would climb. The economist dashes any hopes that economic benefit would merely be shifted rather than falling, explaining: “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 limiting development in Bonn’s outlying districts mean that we cannot count on comparable service offerings being built up. We’re looking at a predictable regression in the inner city as well as what would likely be only rudimentary positive development further out.”
Major academic influence as well
The second part of the Economica study focused on the University’s academic contributions. Studying academic/scientific publication activity between 2016 and 2022, the researchers found that the University of Bonn was involved in one out of every 40 academic publications in Germany, one out of every 177 within the EU-27, and one out of every 655 academic publications worldwide. The global research network of the University of Bonn consists of over 20,000 cooperation partners. The study additionally showed that the number of patents attributable to the University has increased in recent years, particularly in the areas of pharmacy and biotechnology, thus directly contributing to the transfer of scientific knowledge into industry practice. The study also confirms the prominence of the University’s commitment to research around the global sustainability goals and for the development of cutting-edge biotech, health tech and other technologies.
As a spokesman for the Rectors’ Conference in NRW, University of Bonn Rector Prof. Dr. Dr. h.c. Michael Hoch commented: “The figures presented in this transparent study reveal impressively the major impact that the state’s universities and other higher education institutions have on the economy of NRW. For every euro of budget funding provided by the state of North Rhine-Westphalia, we generate four euros. That is incredible—a tremendous investment that is surely one of the best.”