A former University of Delaware president who now keeps a closer eye on money than students made a big announcement during UD's Stern Summit Tuesday regarding how his own institution would soon be providing hard data that shows how important universities and hospitals are at supporting regional economies.
"I'd like to break just a little bit of news right now. In the coming months, the Philadelphia Fed is going to to launch what we are calling the Anchor Economy Dashboard," said current president and CEO of the Federal Reserve Bank of Philadelphia Patrick Harker. "The anchor economy of these institutions--'eds and meds'--are anchors of their communities. I am really excited about this effort. The Anchor Economy Dashboard will be a new first-ever national data set that captures the importance of anchor institutions to their regional economies."
The announcement of the data being provided to the public was preceded by Harker explaining the nation's expenditure on healthcare represents 12% of the gross domestic product. Roughly 20% of the United States GDP was comprised of healthcare spending.
These necessities create anchor points for their area economies because it's difficult for large educational--the basis for the former portion of "eds and meds"--or healthcare providing institutions--the basis for the latter--to pack up and head somewhere new, Harker explained, noting Delaware was one of only four states that did not have a medical university.
Nevertheless, in debuting the kinds of information individuals would be able to find on the new Anchor Economy Dashboard, Harker says Delaware still has a strong financial footing built around these kinds of institutions.
"The state of Delaware has 38 anchor institutions comprising both eds and meds. Employment impacts from Delaware's eds and meds total 65,316 jobs. That's the total number of jobs--direct, indirect, and induced--supported by higher education and hospitals in the state," Harker said, noting, "Induced jobs are those that are supported by the economic activity that the anchor economies generate. What's that? Well, the folks over at Klondike Kate's have jobs that are induced by UD; They're there primarily because UD is here."
The dashboard, which will be available at PhiladelphiaFed.org, will feature over 500 regions of the country into which interested parties can drill down and receive detailed information on the impact of eds and meds in a given community, providing a "reliance score" which "provides a summary measure of how dependent a regional economy is on anchor institutions," adjusting for "economic impact by the size of the regional economy and incorporates measures of impact in terms of employment, income, and growth-value added."
"Let's take Delaware: our data support what I suspect a lot of us just know intuitively, this state is quite reliant on anchor institutions," Harker said. "So, while in terms of total employment for eds and meds, Delaware ranks 46 out of 50 states and the District of Columbia--that's largely a result of the state having a small population--Delaware's reliance score, we calculate, is 1.23. In other words, Delaware over-indexes on eds and meds...[which] average 23% higher in Delaware than in the United States as a whole."
Comparatively, Pennsylvania ranks 15th nationally, with a reliance at 1.19, and 863,974 jobs attributed to the categories in question. New Jersey ranks 25th, with a reliance score at 1.05, and 569,476 jobs attributable to eds and meds. Montana has the highest reliance score at 1.53 and 87,128 anchor institution jobs.
When Harker was asked how he envisioned people using the dashboard, particularly when making workforce decisions, he said it can be used to strengthen a state's economy or discover opportunities--or the need--for diversity in specific areas.
"We don't want the numbers to be driving policy, but informing policy, right," Harker said. "That's why we're building this tool."
