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LSU’s Economic Impact on Louisiana is Widespread, Far-reaching

Estimated at $1.3 Billion, Generates Approximately 22,000 Jobs

LSU's presence produced $1.3 billion in direct and indirect sales in the 2010 fiscal year, which is comparable to 3 percent of gross domestic product for the Baton Rouge metro area.
Jim Zietz/University Relations

It's been a tough few years, economically speaking. Since 2008, the country has faced a national – and international – recession, causing debt to grow, earnings to fall and unemployment to skyrocket. Locally, natural disasters, fading oil revenues and the Deepwater Horizon oil spill, along with several other factors, have caused the Capital City region to endure many economic difficulties, including significant budget cuts for higher education. But during this time of financial hardship, LSU's undeniable economic impact on the state's economy has helped Louisiana move forward by providing for the present while preparing for the future.

A recent study by Stephen Barnes, assistant professor of economics and associate director of the LSU Division of Economic Development at the E. J. Ourso College of Business, underscores LSU's impact on Baton Rouge area's economy, showing that the university generates more than $1.3 billion annually and created almost 22,000 jobs during economically tough times when unemployment has reached record highs.

"Our study shows in indisputable terms that LSU is truly integral to the Baton Rouge Area and its success," Barnes said. "LSU has a critical mass of highly skilled expert faculty that brings a significant amount of grant money to the state. When you have that kind of expertise all in one place, it also serves as a magnet to draw in industry and with the benefits of having a skilled workforce in your backyard. It's what economists refer to as returns to scale … any dollars invested in LSU come back to the state with interest."

Some of the study's most pertinent findings include:

  • LSU's presence produced $1.3 billion in direct and indirect sales in the 2010 fiscal year, which is comparable to 3 percent of gross domestic product for the metro area.
  • More than $738 million in salaries and wages were generated last year, which directly accounts for 2 percent of the area's wages and salaries.
  • LSU generated an estimated 21,940 jobs. Employment attributable to LSU accounts for nearly 6 percent of total non-agricultural employment in the metro area.
  • In fiscal year 2010, LSU professors and researchers attracted more than $80 million in federal research grants for the metro area.

To view the study, visit www.lsu.edu/departments/curb/plan/LSUEconomicImpact2011Study.pdf.

"The impact of LSU on the Baton Rouge area's business community is enormous.  It is one of the region's largest employers; produces a significant amount of the region's workforce; and is a catalyst of innovation, entrepreneurship, and research and development," said Adam Knapp, president and CEO of the Baton Rouge Area Chamber. "We would not be in the positive economic situation that we now find ourselves without having LSU here in the Capital Region."

The "LSU 100: Fastest Growing Tiger Businesses" have a total combined revenue of $16.3 billion.
Jim Zietz/University Relations


Acknowledging the tremendous impact LSU has had on the business community in Baton Rouge, the Stephenson Entrepreneurship Institute at LSU's E. J. Ourso College of Business recently honored the "LSU 100: Fastest Growing Tiger Businesses." Among other criteria, each business must have an LSU alumnus as one of the leaders of the organization. The Top 10 were identified independently by Postlethwaite & Netterville, which calculated each company's compound growth from 2007-2009, with the total revenue generated by the LSU 100 amounting to $16.3 billion.

"LSU plays a vital role in supplying the talent my small-business needs in order to succeed," said Brian Rodriguez, founder and CEO of Gatorworks Web Design, a Baton Rouge-based company ranked sixth out of the top 100 LSU businesses. "Because the staff at Gatorworks is composed of 100 percent LSU alumni, we can't imagine growing our business without the help of LSU."

As an alumnus himself, Rodriguez knows the talent he'll find at the university is exactly what his company needs to continue their fast-paced trek to the top.

"We've been very impressed with the students coming out of LSU. We run a progressive, interactive agency and there's no need to look for talent in the cliché 'progressive' cities. All we have to do is look in our own backyard," he said. "Our company participates in the Art & Design interview days put on by Career Services, and we've found it to be a great platform to meet young new talent coming out of LSU. We try to have a new graphic design intern each semester through the Design School's internship class. Our company provides the real-world experience the students are looking for, and we hope to be able to offer full-time jobs once the students graduate. It's truly a win-win." 

Engineering the Future

LSU also contributes to the state's economy by providing more than 49 percent of Louisiana's engineering and construction management graduates. Due to the state's economic growth and its position as a forerunner in coastal, petroleum and chemical engineering, the field is expected to experience significant growth during the next several years, and the College of Engineering plans to grow in pace with those needs. LSU ranks first among engineering colleges in both the SEC and the Big Ten in this measure, graduating 4.9 bachelor's degree students per full-time faculty member. Also, the college's enrollment has continued to rise, increasing more than 20 percent over the last two years and bringing even more students to the capital city region. When you factor in the reality that graduates from the university's engineering program make better starting salaries than the national average in petroleum, chemical, mechanical, electrical and civil engineering, it's easy to see why LSU has such an impact on the field and such a draw on students.

LSU produces more than 49 percent of Louisiana's engineering and construction management graduates.
Jim Zietz/University Relations

"LSU has significantly contributed to the economy of Louisiana and has been a vital research tool for the forest products industry in this state. We use the research and faculty at LSU for a variety of projects involving research on new product ideas, analysis of problems in wood product manufacturing and display of Louisiana made forest products in the Louisiana House by Alex Box Stadium," said Roy O. Martin, LSU College of Engineering alumnus and president and CFO of Roy O. Martin Lumber Company LLC, Martin Timber Company LLC and Martin Companies LLC. "Many of Roy O. Martin employees are LSU foresters, engineers, business, accounting and other graduates. We actively recruit at LSU for people to help our business grow. This talent base enables the owners of Roy O. Martin to remain a privately held, ethically-based, professionally managed company for many generations to come."

Biomedical and Health Research

With an internationally-renowned faculty body drawing in millions of dollars annually in grants and research dollars, the LSU College of Science, together with other entities across the university's campus, contributes to the health of Louisiana's citizens on a daily basis by studying infectious diseases, genetics and genetic disorders, methods of improving available pharmaceuticals and training the next generation of health-based scientists and researchers. In fiscal year 2010, university researchers brought in $18.6 million dollars in biomedical and health research alone. The LSU School of Veterinary Medicine and the College of Humanities & Social Sciences collectively brought in nearly $7 million to study human diseases, including mad cow disease, avian flu, leprosy and one that is of particular importance to Louisiana – the West Nile Virus, a mosquito-borne disease.

Coastal Impacts

The coastline is one of Louisiana's most precious assets, and as such, LSU is dedicated to protecting it. Last year, the university brought in more than $12 million to study storm surge, climate change, artificial reefs, erosion, river diversions and much more. An additional $8 million was brought in for oil spill-related research after the April 2010 Deepwater Horizon tragedy in the Gulf of Mexico. The university is also dedicated to preserving the state's energy status through studying fossil fuels, batteries, turbines and other such existing technologies, while preparing for the future through research on biofuels, solar power and other clean alternatives. In this realm of research alone, the university brought in more than $6.5 million in grant dollars.

Technology Transfer

The LSU Office of Commercialization and Intellectual Property assists university faculty in taking their ideas from the lab and into the hands of consumers. Several start-up businesses or licensed technologies have been generated through this process, including but not limited to:

  • Esperance Pharmaceuticals, developed jointly through a partnership between researchers at LSU and other institutions. Esperance is developing a new class of targeted anticancer drugs that selectively kills cancer cells without harming normal cells.
  • LaCrash: software for Louisiana law enforcement officers to record details of traffic incidents on-site. The data is compiled and analyzed at LSU.
  • Aquaculture Systems Technologies LLC: a national leader in manufacturing and marketing of water filtration systems for the aquaculture industry. A partnership with LSU's Department of Civil and Environmental Engineering, Aquaculture Systems is developing an automated system for continuously culturing zooplankton.

Supporting Small Business Growth

In addition to these traditional impacts, the university also adds additional values and opportunities to the MSA. LSU builds economic development through small business incubation and commercialization efforts. For example, the Louisiana Business and Technology Center, or LBTC, focuses on supporting and creating small businesses in fields critical to the state's economic future. LBTC has helped to secure nearly $130 million in equity, grants and loans; built more than 500 new businesses; and created or saved nearly 10,000 jobs. LSU's Office of Intellectual Property, Commercialization and Development helps to take cutting edge research conducted at LSU and transform it into commercially-viable products available for consumer purchase.

Educational Impact

LSU also works to develop a skilled workforce and better quality of life for Louisiana through $16 million dollars in outreach and service to the state's K-12 schools. With more than 50 such programs – from providing college-level math and science instruction in Central Louisiana high schools to launching an early reading initiative in New Orleans pre-schools – LSU is preparing Louisiana's children for tomorrow's economy, where more than 50 percent of jobs will require an education beyond high school by 2018.

Community Outreach

Community outreach programs run through the university improve the quality of life for Louisiana citizens all across the state. LSU's Office of Community Design and Development in the College of Art & Design used a grant from the National Endowment for the Arts to revitalize Minden's Main Street and its surrounding areas. Through interdisciplinary workshops with design professionals, preservationists and community leaders, students were able to connect environmentally responsible design practices to accelerate sustainable development in Minden. The Robert Reich School of Landscape Architecture at LSU also has projects in St. Charles, Cameron and Plaquemines Parish. Bruce Sharky, the professor in charge of these projects, plans to help the City of Bayou Des Allemands in St. Charles Parish find an acceptable solution to repairing a damaged portion of the levee that protects the town from its bayou. The projects in Cameron and Plaquemines Parishes focuses on developing new sport and recreational fishing opportunities in waterways badly damaged during Hurricanes Katrina, Rita, Gustav and Ike.

Closer to home, university students and faculty routinely participate in neighborhood cleanups, playground design and development and area beautification projects. Honors College students, faculty and staff recently came together to clean up the Old Lutheran Cemetery in Old South Baton Rouge, the oldest African-American cemetery in the city, and the university's Greek community participates regularly in Habitat for Humanity builds around the city.

Impact on Artistic Community

LSU's impact on the arts benefits the area, too. Producing the future generation of artists, as well as providing employment for faculty who are expert photographers, painters, writers, actors and so forth, has led to the development of an established arts community in the city, improving downtown entertainment options and the quality of life for area residents – an improvement that should translate into increased retention rates for native Louisianans.

"Despite the current state funding crisis we are facing, LSU continues to generate jobs and attract money that helps to keep the Baton Rouge area and all of Louisiana moving forward, while still contributing to the improvement of everyday life for the citizens of our state," said LSU Chancellor Michael Martin. "Our students, staff and faculty are dedicated to upholding the highest standards in education and stewardship to Louisiana. We strive to make a difference for everyone in every way that we can."

For more information on LSU's impact on the Baton Rouge Area and Louisiana as a whole, visit www.lsu.edu/impact.