Direct economic contributions

Economic output / revenue generated by universities and their collaborations

Beyond education and research, universities generate significant economic value, with outputs often rivaling that of large private corporations. For instance, in 2005/06 alone, UC Berkeley generated revenues of US$1.4 billion.

Not only do research-intensive universities generate economic value for themselves, they also do so through their associations with external organizations. Many companies actively seek out universities for their research knowledge and expertise, with clusters often forming around them in the model of Route 128 and Silicon Valley.

• The "Cambridge Phenomenon" has been recognized in the "Library House Cambridge Cluster Report" as involving 893 companies and generating £3.4Bn in revenues, with more than 27,000 direct employees.
• In California, one in every three biotech companies counts Berkeley scientists among their founders, including Chiron, Exelixis, Tularik and Renovis, and 85% of them employ UC Berkeley alumni.
• Companies entering into partnerships with the University of Copenhagen experience a yearly average increase in productivity per employee of 6.5%.

In addition, universities attract inward investment for their economies, thus increasing revenue for their home states.

• In California, 85% of research funding originate from outside the state but are expended within it, representing additional revenue for the Californian economy. More than 71% of UC Berkeley's revenue originated from outside the Bay Area.
• Cambridge and its associated firms attracted more than 20% of the venture capital invested in the United Kingdom. Some examples of investment attracted included Microsoft Research Cambridge, Microsoft Corporation's first research laboratory outside the United States, as well as Genzyme Plc, which has invested US$50 million in their manufacturing facility close to Cambridge.