Report Discusses Harvard's Impact on Region

Harvard is sometimes portrayed as a parasite to its Boston and Cambridge communities, but a study commissioned by the University and released this weekend discusses how Harvard may not be such a drain on its hosts.

In fact, the study says, Harvard's wealth of knowledge and research promote economic growth in Boston and Cambridge. While it mentions the well-recognized assets the University brings as an employer, builder and buyer, it emphasizes Harvard's contributions of "intellectual capital."

As an institution that employs and educates some of the best and the brightest and supports the exchange of new ideas, the study says the University produces employees and patents products that add to the community financially and intellectually--the "intellectual capital."

The study is the latest initiative of the University's Vice President for Government, Community and Public Affairs Paul S. Grogan, who took over the position in January. Since Grogan's appointment, Harvard has spun into high gear over the past year to improve strained relations with its community, including the University's re-negotiation in August of the payment in lieu of taxes it pays to Boston.

The Process

The report provides a "good basis for discussion" about Harvard's relationship with Boston and Cambridge and how it can contribute even more to its host towns, according to Grogan.

"You have to signal an openness to discourse," Grogan said. Compiling a report of this kind is "something that universities do from time to time."

Harvard has not compiled a report like this in "many, many years," according to Grogan.

An outside consulting firm prepared the report for Harvard in consultation with professors and administrators.

Grogan said the report would lead administrators to ask questions about how they can further contribute economically to their community.

For example, Grogan said the University should think about increasing its purchasing within the community.

In addition, he said "there needs to be an organized effort to persuade, convince and attract a larger portion of the entrepreneurs [coming out of universities in the area] to stay here."

Knowledge and Research

While at Harvard, student and faculty entrepreneurs create Internet start-ups and other business ventures. And when they leave the Harvard environment, they take their businesses with them, bringing economic vitality to the local community.

"There's a tremendous pipeline of entrepreneurial talent coming out of Harvard, MIT" and other schools, Grogan said.

Research conducted in the Mallinckrodt laboratories or at the Harvard Medical School has similar economic effects. According to the study, the University spent over $374 million on research during the 1997-1998 year.

It "enriches the education of Harvard students, and thus enhances the University's contribution to the region's human capital" the report says. This may lead to economic growth in and out of the area, making Harvard an "export industry" in itself.

According to the report, "it is the collective strength of the Boston area's research institutions that help make it a magnet for private investors."

Spending the dollars

In addition to stimulating innovation and enterprise locally, Harvard pours money directly into its host communities--by spending within Cambridge and Boston, employing many local residents, making payments in lieu of taxes and attracting tourists to the area.

Harvard brings in tuition money, donations and research funding from around the country and the globe that is then spent in Cambridge and Boston. Each year the University draws nearly $1 billion into the city. It also uses Boston's resources--local residents, construction firms and goods.

Harvard, one of the largest employers in the area, pumps about $580 million into the community by paying the salaries of the Boston-area residents it employs--about 12,300.

It spent $724 million on goods and services over the 1997-1998 year--47 percent on Boston-area businesses and institutions.

The University gives much back to its community, the study concludes, but there is always room for improvement.

"By many measures, Harvard's contribution to the economy of the Boston area is impressive. During the coming decade, it could prove to be even more significant," the report says.