Regional economics refers to activities within a certain region or location that represents the economic system of the said region (Hoover et al, 2006). Economic activities include production establishments such as factories, farms, agriculture, businesses, households, and private and public institutions. In studying regional economics, one has to deal with the distribution of these economic activities within the region. In relation to regional economics and to further explain regional economics this paper summarizes the article entitled The Economic Impact of Stony Brook and analyze its relationship with regional economics.
Stony Brook is a state university in Long Island, New York. It is part of the State University of New York and offers many undergraduate and graduate programs. Stony Brook is Long Island’s only public research university and produces the educated workforce that drives the area’s high-tech economy. The university is considered to be the one of the Long Island’s highest-paying employers, providing its employees an average annual salary of about ,061 when other employers in Long Island only provide ,500 annual salary to their employees. The high wage provided by Stony Brook is because Stony Brook’s workforce consists of highly skilled scientists, academic professionals, medical practitioners, engineers and technicians. The university employs about 13,500 employees with full-time or part time jobs which are roughly 6.7 percent of the labor force in Suffolk County and the largest number of employees in any college or university in the Long Island. This percentage of labor force that Stony University provides the Suffolk County is an important driver of the area’s economy considering that it does not only provides education to the people in the area but as well as jobs. The university is also accounted for about 7 percent share of the total state pension that it provides it retirees that are still living in the Long Island region aside from the Social Security benefits.
Stony Brook University has also many economic development programs such as Centers for Advanced Technologies which include the Center for Biotechnology and the Center for Sensor Systems; the Long Island High Tech Incubator; the Strategic Partnership for Industrial Resurgence; and the Small Business Development Center.
Through these programs and in terms of support and partnerships, the university is able to provide local businesses in Long Island the resources they need such as technical, financial, strategic, and marketing expertise. Through these programs, the university was able help local businesses grow aside from providing jobs to the people and attracting new investments that help boost Long Island economy. These programs also help the region contribute to technology such as its High Technology Incubator that ranked as a top-performing technology incubator. The university’s contributions to technology, employment and businesses have been great contributions to the region’s economy. It has also established a partnership with Brookhaven National Laboratory, a multipurpose national laboratory with an annual budget that exceeds 0 million, generating 15,000 jobs and contributing about billion annual revenue on the regional economy.
Stony Brook, having employed a number of highly skilled and educated workforces resulted to have the largest enrollment of any college and university in Long Island. The tuition fees, housing, room, board, transportation, entertainment and other expenditures of Stone Brook University have an economic impact on Long Island. The university has the ability to attract students from other places has greatly contributed to the economy of the region.
On campus student expenditures which include tuition fees, dormitory income and Faculty Student Association funds total to about 1million aside from the expenditures of off-campus students. The estimated expenses of full-time students living off-campus is .6 million while part-time students will spend .2 million. The total student expenditures then are estimated to be .6 million which generated an estimated 1,335 jobs when compared to the annual average wage in the Long Island region. Students from outside the Long Island spend more on education and cost of living, most of them from New York City and Nassau and Suffolk counties.
Another contribution of Stony Brook to the regional economy of Long Island is its construction spending through the State University of New York Construction Fund which amounts to .2 million annually with a revenue impact on the region of million or 80 percent of the total construction spending. Construction spending goes to contractors, supplies, materials and other construction expenses.
The major determinant of the impact of Stony Brook to the regional economy of Long Island is its operating budget. In 2002/2003 the total operating budget of the university is .17 billion excluding the fringe benefits. This includes salaries and wages, supplies and expenses, equipments costs and utility costs. About only 13.8 percent of the operating budget is supported by state tax which means that the rest of the budget is shouldered by the university itself. This represents that with the revenue of the university from tuition, self-fund, research, and health care it does not depend that much on the government.
The article also discusses about the multiplier effect associated with research institutions. The multiplier effect is said to be a basis of the economic concepts that refers to changes in the level of activity that brings further changes in the level of other activities throughout the economy.
The multiplier effect can be best described with an increase in the regional income caused by a certain regional economic activity that spends certain amount. In other words, the multiplier effect happens when an amount spent by an activity generates income and savings and the original spending circulates through a local economy for respending for the same activity or another economic activity. This can be measured by looking at the input and output of the Long Island economy. With Stony Brook, they inject an amount for research institutions. The income generated by the research institutions or what is called the multiplier were applied to operating expenditures less employee benefits. Multipliers for health services were applied to employee medical expenditures while multipliers for construction were applied to construction spending. Multipliers for retail trade were applied to equipment spending.
With the spending of the university and with the jobs it generates within the Long Island region as well as the benefits it provides with its retirees, the university is truly an economic driver of the region. As stated above, regional economics is related to the distribution of the economic activities over a region. With the many economic activities that has been initiated and developed by the university from providing education, generating jobs, health care, and contributions to the development of technology as well as providing local businesses in the Long Island region the resources they need, stony Brook has a great impact on the regional economy of Long Island and the Suffolk County.
As for the article, it represents the economic impact of Stony Brook on statistics and facts which made the article a reliable research. Based on the facts and figures the article has presented, we can conclude that Stony Brook is really an economic booster for the region, accounting to 5 percent of the entire economy of the Suffolk County and roughly 6.7 percent of its labor force.
Credit:ivythesis.typepad.com
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