Documentos de Académico
Documentos de Profesional
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Prepared for:
NASA GLENN RESEARCH CENTER
Prepared by:
Robert Sadowski
December 1, 2005
Glenn Research Center: Economic Impact
ACKNOWLEDGEMENTS
The author of this report wishes to recognize the assistance of persons within Levin
College whose efforts were instrumental to the success of this project. Susan Petrone,
Communications Coordinator, provided editorial assistance during the report’s preparation. Dr.
Ziona Austrian, Director of the Center for Economic Development, offered suggestions and
insights throughout the duration of this project, which added to the analytical value of the report.
Olga Lee, Administrative Assistant, took on the responsibility of formatting, reproducing, and
binding the report.
The author would also like to thank employees of the NASA Glenn Research Center for
their contributions to this project including management and coordination, providing data, and
feedback on the report’s content. They include Ronald Alexander, Robert Kistemaker, Traci
Savage, Robert Sefcik, and Anthony Strazisar. Without their many hours of work, this project
would not have been possible.
TABLE OF CONTENTS
Acknowledgements .....................................................................................................................i
List of Tables..............................................................................................................................iv
Executive Summary....................................................................................................................1
A. Introduction ............................................................................................................................3
Maxine Goodman Levin College of Urban Affairs, Cleveland State University iii
Glenn Research Center: Economic Impact
LIST OF TABLES
Table 2. Glenn Civil-Service Employees by Occupation and Place of Residence (percent) ......10
Table 3. Glenn Educational Grants in Ohio by Academic Institution, FY 1998 vs. FY 2004.......13
Table 9. Glenn Economic Impact on Northeast Ohio, FY 1998 vs. FY 2004 ..............................33
Table 10. Output Impact Based on Glenn Spending in the State of Ohio, FY 2004 ...................37
Table 11. Employment Impact Based on Glenn Spending in the State of Ohio, FY 2004 ..........41
Table 12. Earnings Impact Based on Glenn Spending in the State of Ohio, FY 2004................45
Table 13. Glenn Economic Impact on Ohio, FY 1998 vs. FY 2004 ............................................48
Table A.3 NASA Glenn Detailed Expenditures in Northeast Ohio, FY 2004 ..............................53
Table A.4 NASA Glenn Detailed Expenditures in the State of Ohio, FY 2004............................56
LIST OF FIGURES
Figure 5. Increase in Sales for Select Industries in Glenn-Driven Sectors (NEO) ......................24
Figure 6. Increase in Sales for Select Industries in Consumer-Driven Sectors (NEO) ...............25
Figure 9. Increase in Earnings for Select Industries in Glenn-Driven Sectors (NEO) .................31
Figure 10. Increase in Earnings for Select Industries in Consumer-Driven Sectors (NEO) ........32
Figure 11. Increase in Sales for Select Industries in Glenn-Driven Sectors (Ohio) ....................39
Figure 12. Increase in Sales for Select Industries in Consumer-Driven Sectors (Ohio) .............40
Figure 13. Increase in Jobs for Select Industries in Glenn-Driven Sectors (Ohio)......................42
Figure 14. Increase in Jobs for Select Industries in Consumer-Driven Sectors (Ohio)...............43
Figure 15. Increase in Earnings for Select Industries in Glenn-Driven Sectors (Ohio) ...............46
Figure 16. Increase in Earnings for Select Industries in Consumer-Driven Sectors (Ohio) ........47
EXECUTIVE SUMMARY
The John H. Glenn Research Center at Lewis Field (Glenn) is one of 10 National
Aeronautics and Space Administration (NASA) Centers. Glenn is situated on 350 acres
adjacent to Cleveland Hopkins International Airport. Its physical plant includes over 150
buildings that contain a unique collection of world-class test facilities. Glenn also
includes the 6,400-acre Plum Brook Station near Sandusky, Ohio, 50 miles west of
Cleveland. It specializes in large-scale tests that would be hazardous within the
confines of the main campus.
This report has two major sections. The first section is an overview of Glenn including
information related to employment and occupations, employee residence, payroll,
expenditures, awards to academia and other institutions, revenues, and taxes paid by
NASA Glenn employees. The second section provides estimates of the economic
impact generated by NASA Glenn on the eight-county Northeast Ohio region and the
state of Ohio during FY 2004. The report is an update of an earlier study (published in
May 2000) in which Glenn’s FY 1998 economic impacts on Northeast Ohio and the state
of Ohio were estimated.
Glenn activities in Ohio, stimulated by $795 million in revenues primarily from outside the
state, generated an increased demand in output (sales) for products and services used
across the state that were valued at $1.241 billion. In addition, 10,023 jobs were created
in Ohio and households across the state saw their earnings increase by $567.6 million.
Businesses deriving the most benefit from direct NASA Glenn spending include
contractors engaged in scientific research and development, academic institutions,
power generation, construction, security, facilities support, data processing, and
miscellaneous technical support.
Businesses deriving the most benefit from spending by Glenn personnel and other
workers whose earnings are due, in part, to Glenn expenditures follow typical consumer
spending patterns. These include automobile dealers, automobile repair shops, food
and beverage stores, restaurants and bars, insurance carriers, commercial banks, real
estate companies, hospitals, and doctor and dentist offices.
Civil service employment at NASA Glenn declined slightly each year between 1998 and
2004. In FY 1998, Glenn had 2,045 employees. By the end of FY 2004, the labor force
had declined about five percent to 1,945 workers. These numbers do not include
employees who work for NASA Glenn’s 19 local contractors. The number of on- or near-
site contractors as of the end of fiscal year 2004 was approximately 1,700.
Total compensation for NASA Glenn’s civil service employees was almost $200 million
in FY 2004. Of this amount, payroll accounted for $162.3 million while employee
benefits accounted for another $36.4 million. Glenn employees experienced a total
payroll increase of $30.7 million (23.3 percent) between 1998 and 2004. During this
same time period, civil service employment decreased from 2,045 workers to 1,945
workers. As a result, the average wage per Glenn employee increased from $64,350 in
FY 1998 to $83,450 in FY 2004, a rise of 29.7 percent. Accounting for the rate of
inflation, in real dollars, the average employee wage rose by 11.9 percent or about two
percent per year.
NASA Glenn spending in FY 2004 was less than one percent lower than in FY 1998
(nominal dollars). However, the expenditure share for Northeast Ohio and the state of
Ohio increased significantly between 1998 and 2004. During FY 1998, Glenn distributed
32.9 percent of its total spending to Northeast Ohio vendors. This spending share
increased to 45.4 percent ($232.6 million) in FY 2004. Likewise, the spending share
across the state of Ohio increased from 47.3 percent in FY 1998 to 64.2 percent ($328.6
million) in FY 2004. These share increases are very critical because of their positive
affect on economic impact in both the region and the state.
Glenn revenues increased by almost $100 million (nominal dollars) or 13.7 percent
between FY 1998 and FY 2004. During the interim period, NASA Glenn saw its
revenues decline during 1999 and 2000 and then begin increasing, reaching a peak of
$821.3 million during FY 2003. Total revenues in FY 2004 amounted to $795 million.
A. INTRODUCTION
In this report, we describe the economic impact of the National Aeronautics and Space
Administration’s (NASA) Glenn Research Center (Glenn) on the eight-county Northeast Ohio
region and the state of Ohio during FY 2004.1 The report also provides some background
information related to NASA Glenn’s R&D activities and an overview of Glenn. The analysis
was conducted by the Center for Economic Development at Cleveland State University’s
Maxine Goodman Levin College of Urban Affairs.
This report is an update of an earlier study (published in May 2000) in which Glenn’s FY
1998 economic impact on Northeast Ohio and the state of Ohio was estimated. 2 Economic
impact is an analytical approach used to estimate economic benefits generated by an entity on
an affected region. It uses an input/output (I/O) model to estimate the effect of Glenn spending
on the studied economies. This model measures economic impact in terms of growth in total
output (sales), household earnings, and the number of new jobs created.
1
For purposes of this study, Northeast Ohio is limited to the Akron and Cleveland metropolitan areas,
which include Ashtabula, Cuyahoga, Geauga, Lake, Lorain, Medina, Portage, and Summit Counties.
2
Austrian, Z. & Wolf, A. (2000). The NASA Glenn Research Center: An Economic Impact Study.
Cleveland State University, Center for Economic Development.
NASA VISION To improve life here, To extend life to there, To find life beyond. NASA
MISSION To understand and protect our home planet, To explore the universe and search for
life, To inspire the next generation of explorers.3
As one of NASA's 10 field centers, the John H. Glenn Research Center at Lewis Field
(Glenn) affects many unique contributions that fulfill NASA’s vision and enable its mission.
Glenn’s mission is to work as a diverse team in partnership with government, industry, and
academia to increase national wealth, safety, and security, protect the environment, and explore
the universe. NASA Glenn develops and transfers critical technologies that address national
priorities through research, technology development, and systems development for safe and
reliable aeronautics, aerospace, and space applications.
3
NASA Glenn Research Center. 2002 Annual Report. Cleveland, Ohio.
4
For detailed information, see National Aeronautics and Space Administration’s Glenn Research Center
2004 Implementation Plan: www.nasa.gov/centers/Glenn/about/aboutGlenn.html
5
A Renewed Spirit of Discovery: The President’s Vision for U.S. Space Exploration is a new directive for
the U.S.’s space exploration program as announced by President Bush on January 14, 2004. The
fundamental goal is to advance U.S. scientific, security, and economic interests through a robust space
exploration program.
surveillance systems to provide a ground-air-space network for full interconnectivity among all
users.
Even when Glenn research results in hardware, the end product is usually knowledge,
often in the form of a report that is made fully available to potential users—the aircraft engine
and airframe industry, the energy industry, the automotive industry, the space industry, and
other NASA centers. The general public benefits from NASA's investment through advanced
knowledge, inspiration, and technology dividends.
6
In FY 2005, Glenn lost an estimated 150 civil servants and 340 contractors according to Crain’s
Cleveland Business: Pettypiece, S. (2005, September 26-October2). Whitlow tagged to tackle
challenges at NASA Glenn. Crain’s Cleveland Business, p.6. These losses are due to NASA refocusing
its mission to send humans to the moon and Mars. In addition, under President Bush’s proposed
budget, Glenn could experience a budget reduction of $118 million in FY 2006 from FY 2005 and see the
elimination of up to 550 more civil servants and an unknown number of contractors
7
For a detailed listing of Glenn’s local contractors, go to http://www.grc.nasa.gov. Click on “About Glenn”
followed by “Glenn Local Prime Contractor Listing.”
Civil service employees at Glenn are categorized into five occupational groups:
administrative professional, clerical, scientists and engineers, technicians, and trades. Table 1
shows the changing occupational mix at Glenn between FY 1998 and FY 2004.
From Table 1, we see that scientists and engineers are by far the largest occupational
category at NASA Glenn, accounting for an average of 56.3 percent of civil service employment
between 1998 and 2004. The employment share reported by scientists and engineers showed
a slight increase from 1998 through 2004. However, there were 35 fewer scientists and
engineers in 2004 than in 1998. Clerical workers also showed little employment variation during
this same time period. In FY 1998, there were 127 clerical workers at Glenn dropping to 117 in
FY 2004. In sharp contrast, persons working in the trades saw their employment share
decrease from 10 percent in 1998 to almost none in 2004. Administrative professionals
reported an employment share increase of almost six percentage points (about 100 workers)
between 1998 and 2004. Technicians saw their share increase by almost four percentage
points (60 workers) during the same time period.
The Akron metropolitan area is the place of residence for slightly less than four percent of the
Glenn workforce, an increase of less than one percentage point since 1998.
Summit Other
Portage 3.3% 3.9%
0.5%
Medina
12.6%
Lake
1.0%
Lorain Cuyahoga
16.5% 61.2%
Geauga
1.0%
C.4 PAYROLL
Total compensation for NASA Glenn’s civil service employees was almost $200 million
in FY 2004. Of this amount, payroll accounted for $162.3 million while employee benefits
accounted for another $36.4 million.8 Glenn employees experienced a total payroll increase of
$30.7 million (23.3 percent) between 1998 and 2004. During this same time period, civil service
employment decreased from 2,045 to 1,945 workers. As a result, the average wage per Glenn
employee increased from $64,350 in FY 1998 to $83,450 in FY 2004, a rise of 29.7 percent.
Accounting for inflation, in real dollars, the average employee wage rose by 11.9 percent or
about two percent per year.
8
Regular benefits for current employees include retirement, thrift plan, FICA, Medicare, health insurance,
life insurance, and worker’s compensation.
9
Spending comparisons are in nominal dollars, that is, 1998 dollars have not been inflated to 2004 levels.
FY 1998, Glenn distributed 32.9 percent of its total spending to Northeast Ohio vendors. This
spending share increased to 45.4 percent ($232.6 million) in FY 2004. Likewise, the spending
share across the state of Ohio increased from 47.3 percent in FY 1998 to 64.2 percent ($328.6
million) in FY 2004. These share increases are very critical because of their positive affect on
economic impact in both the region and the state.
Other states that received more than $10 million in expenditures from NASA Glenn
during FY 2004 included Maryland, California, Florida, Virginia, and Washington. Figure 2
shows Glenn spending in select states. Table A.1, Appendix A lists NASA Glenn spending by
state for FY 2004.
10
The $100.6 million is included in Glenn’s total spending of $511.9 million in FY 2004.
Out of all 50 states, Ohio received the largest share of funding awarded to colleges and
universities—22.2 percent. Monies allocated to academic institutions in Northeast Ohio and the
remainder of the state were evenly split—$8.8 million and $8.5 million, respectively. Colleges
and universities in seventeen other states received more than $1 million from NASA Glenn
during FY 2004. Figure 3 shows the distribution of monies awarded to educational institutions in
select states. Table A.2, Appendix A, provides a complete listing of NASA Glenn awards to
colleges and universities by state.
Northeast Ohio -
Total: $78.1 Million
$8.8 Mil
11.3%
Table 3 shows monies awarded by Glenn to colleges and universities in the state of
Ohio for FY 1998 (if applicable) and FY 2004. Four universities received more than $3 million
each in FY 2004: The Ohio State University ($4.2 million), Cleveland State University ($3.7
million), Case Western Reserve University ($3.4 million), and the University of Toledo ($3.2
million). The University of Akron ranked 5th with grants of $1.4 million. Combined, these
universities received almost 92 percent of the monies allocated by NASA Glenn to academic
institutions across the state of Ohio.
2004
COLLEGES & UNIVERSITIES FY 1998 FY 2004
SHARE
TOTAL $17,357,746
Other nonprofit organizations in Ohio that received major grants from NASA Glenn in FY
2004 included the Ohio Aerospace Institute ($16.6 million), Battelle Memorial Institute ($4.3
million), Glennan Microsystems Initiative ($0.5 million), and the Cleveland Clinic Foundation
($0.4 million).
revenues decline during 1999 and 2000 and then begin to increase, reaching a peak of $821.3
million during FY 2003. Table 4 provides a detailed breakdown of Glenn revenues from FY
1998 through FY 2004. For example, in FY 2004, Glenn received $767.3 million in revenues
from NASA. This amount represents 96.5 percent of its total income. An additional $27.7
million in revenues were received from the Department of Defense, other federal agencies, and
other domestic, non-federal entities. NASA Glenn’s total revenues during FY 2004 were $795
million.
NASA Direct Authority 661.9 602.3 590.6 647.4 668.1 794.1 767.3
For the combined time period shown in Table 4, Glenn’s income from sources other than
NASA (reimbursable commitments) amounted to $178.5 million. The reimbursable
commitments can be categorized as follows: domestic, non-federal entities—$64.3 million (36
percent); other federal agencies (excluding Department of Defense)—$59 million (33 percent);
Department of Defense—$50 million (28 percent); and foreign agreements—$5.3 million (3
percent).
11
In March 2001, Cleveland and Brook Park completed a land swap deal. Under the agreement, 135
acres – including the IX Center and other development parcels in Brook Park – moved into Cleveland’s
The data shown in Table 5 represent taxes withheld from employee paychecks and sent
directly to state and local governments. It does not include taxes paid directly by employees to
local governments based on residence. From 2001 to 2004, state and local taxes increased by
22 percent. During this combined period, the state of Ohio received $25.1 million in taxes from
Glenn employees and local municipalities received $11.4 million. While the number of civil
service employees showed little variation during these years, the taxes they paid increased
significantly. This supports the findings in section C.4 that the average wage of a Glenn
employee increased by 11.9 percent between 1998 and 2004 after adjusting for inflation.
boundaries to be used for airport expansion. In return, Brook Park received portions of NASA Glenn
property that were in Cleveland and are worth more than $2 million in annual tax revenue.
D.1 METHODOLOGY
If we imagine that the Glenn Research Center came into existence in one day, we can
assume that the investment it would bring to the Northeast Ohio or Ohio economy from outside
the respective region would stimulate activity by creating a demand for goods and services. A
value can be placed on this stimulus—known as the change in final demand—and it must be
included in any estimate of Glenn’s economic impact.13 The effects of a change in final demand
can then be traced throughout the Northeast Ohio or State economy using an input-output
model that captures the buy-sell linkages among all industry sectors and the household sector.
In order for Glenn to engage in research and development, other goods and services are
needed as intermediate inputs. This leads to the other components of economic impact—direct,
indirect, and induced. Direct impact refers to the initial value of goods and services, including
labor, purchased by Glenn within Northeast Ohio or the state of Ohio. These purchases are
sometimes referred to as the first-round effect. Indirect impact measures the value of labor,
capital, and other inputs of production needed to produce the goods and services required by
Glenn (second-round and additional-round effects). Induced impact measures the change in
spending by local households due to increased earnings by employees in local industries who
produce goods and services for Glenn and its suppliers.
As stated earlier, economic impact analysis takes into account inter-industry
relationships within an economy—that is, the buy-sell relationships among industries. These
relationships largely determine how an economy responds to changes in economic activity.
Input-output (I-O) models estimate inter-industry relationships in a county, region, state, or
country by measuring the industrial distribution of inputs purchased and outputs sold by each
12
For purposes of this analysis, Northeast Ohio is limited to the Akron and Cleveland metropolitan areas
and includes Ashtabula, Cuyahoga, Geauga, Lake, Lorain, Medina, Portage, and Summit Counties.
13
Change in final demand is defined as the purchase of goods and services for final consumption—in this
case by Glenn Research Center.
industry and the household sector. Thus, by using I-O models, it is possible to estimate how the
impact of one dollar or one job ripples through the local economy, creating additional
expenditures and jobs. The economic multiplier measures the ripple effect that an initial
expenditure has on the local economy.14 This study utilizes regional I-O multipliers from
IMPLAN Professional.15
Two factors are taken into account when estimating economic impact: 1) purchases from
companies located outside Northeast Ohio or the state of Ohio, and 2) share of revenues
received from local sources.
For this analysis, economic impact is generated only by Glenn purchases from
companies located within Northeast Ohio or the state of Ohio. Therefore, when estimating the
impact on Northeast Ohio, goods and services purchased from businesses and other entities
located outside the eight-county region were excluded from the model. Likewise, when
estimating the impact on the state of Ohio, goods and services purchased from businesses and
other entities located outside the state were excluded from the model.
Before entering local (Northeast Ohio or the state of Ohio) expenditures into the IMPLAN
model, the amounts must be discounted by the percentage of revenues that are received from
local sources. If expenditures were not discounted by the percentage of revenues coming from
local sources—sometimes referred to as neutral monies, then the economic impact values
would simply reflect the redistribution of local funds. The objective of impact analysis is to
estimate the effect of monies coming from outside the studied economy rather than the
redistribution of monies already existing in that economy. Revenues coming from outside the
local economy are sometimes referred to as good money. Since almost all Glenn revenues are
derived from federal sources—NASA accounts for over 96 percent—discounting of expenditures
due to local revenues was not necessary.
Figure 4 illustrates the process by which NASA Glenn impacts the local economy
through its spending in the Akron and Cleveland metro areas. Through its attraction of federal
dollars, Glenn creates new demand for goods and services (final demand change). Some of
this demand is generated for goods and services provided by vendors outside the Akron-
14
For example, suppose that company XYZ reports sales of $1 million. From the revenues, the company
pays its suppliers and workers, covers production costs, and takes a profit. Once the suppliers and
employees receive their payments, they will spend a portion of their money in the local economy
purchasing goods and services, while another portion of the monies will be spent outside the local
economy (leakage). By evaluating the chain of local purchases that result from the initial infusion of $1
million, it is possible to estimate a regional economic multiplier.
15
IMPLAN was originally developed by two federal agencies, the Department of Agriculture and the
Department of the Interior, to assist in land and resource management planning. The model was later
commercialized by the Minnesota IMPLAN Group, Inc.
Cleveland metro areas, resulting in dollars leaking out of the local economy. However, many
goods and services are purchased locally. Local spending by Glenn for goods, services, and
labor is the direct impact. As these dollars move through the economy, they result in additional
demand for goods and services, creating indirect and induced impact. The total economic
impact of Glenn is equal to the sum of the change in final demand, direct, indirect, and induced
impacts.
16
IMPLAN type SAM multipliers are used in this study. SAM multipliers are based on information in a
social account matrix that considers social security and income tax leakage, institution savings,
commuting, and inter-institutional transfers.
17
Margins represent the difference between producer (manufacturing cost) and purchaser prices (money
spent by Glenn). The end result is that, by using margins, the value of the economic benefit is split into
the portion going to retail markup (local), wholesale markup (local), transportation cost (local), and
producer price (outside the region).
household spending is foreign and domestic trade ($48.9 million). This sector represents
products that are purchased by households but are produced outside Northeast Ohio, either
domestically or internationally.
Indirect impact is estimated by summing the contributions of individual industries that
provide inputs to the producers of the goods and services ultimately consumed by Glenn.
Induced impact is estimated by measuring the spending of workers who are employed as a
result of the demand for products and services created by Glenn. Total output impact is the
sum of change in final demand, direct impact, indirect impact, and induced impact. Table 6
reveals output impacts by industry sector. It shows how Glenn spending across Northeast Ohio
affects all sectors of the economy.
Indirect Induced a
Industry Sector Direct Impact Total
Impact Impact
Utilities $12,944,702 $942,776 $2,336,740 $16,224,219
Real Estate and Rental & Leasing $2,227,696 $7,694,003 $8,694,055 $18,615,755
c
Change in Final Demand $511,903,638
The total output impact across Northeast Ohio as a result of Glenn Research
Center activities was $1.064 billion. Looking at Table 6, we see how Glenn expenditures of
$364 million in Northeast Ohio resulted in a change in output (sales) of $552.8 million across all
industry sectors. For example, Glenn spending affected a $25 million increase in sales (direct,
indirect and induced impacts) by all manufacturing-related industries.
Forty-eight percent ($511.9 million) of the total output impact is accounted for by the
change in final demand that occurs because Glenn activities bring resources into Northeast
Ohio from outside the region. Approximately $363 million (34 percent) of the total output impact
is a result of direct spending by Glenn for goods and services purchased within Northeast Ohio.
The remaining output impact of $189.8 million (18 percent) is attributable to the indirect and
induced components as Glenn spending ripples through the economy.
A detailed analysis of the IMPLAN model results indicates that the $552.8 million change
in output (sales) generated by the direct, indirect, and induced impacts can be divided into three
broad categories—Glenn-driven sectors, consumer-driven sectors, and other sectors. Glenn-
driven sectors are those industry groups whose increased sales, employment, and earnings are
attributed primarily, but not exclusively, to Glenn spending. They include utilities, construction,
information, professional and scientific services, administrative and support services, and
education. The total increase in output value for these sectors in FY 2004 was $274.9 million.
Consumer-driven sectors are those industry groups whose increased sales,
employment, and earnings are attributed primarily to spending by Glenn employees and other
workers who produce goods and services for Glenn. They include retail, finance and insurance,
real estate, health care, entertainment and food, other services, and owner-occupied
buildings.18 The total increase in output value for these sectors in FY 2004 was $180.7 million.
Other sectors are those industry groups that are driven by both Glenn and consumer
spending or whose impact is insignificant. They include manufacturing, government
enterprises, agriculture, mining, wholesale trade, and transportation and warehousing. Figure 5
shows the output distribution for select industries within the Glenn-driven sectors. Figure 6
shows the output distribution for select industries within the consumer-driven sectors.
18
Owner-occupied dwellings is a special industry sector developed by the Bureau of Economic Analysis.
It estimates what owner/occupants would pay in rent if they rented rather than owned their homes. This
sector creates an industry out of owning a home. Its sole product (or output) is ownership, purchased
entirely by personal consumption expenditures. Owner-occupied dwellings capture the expenses of
home ownership such as repair and maintenance construction, various closing costs, and other
expenditures related to the upkeep of the space in the same way expenses are captured for rental
properties.
Facilities Support -
$7.1 Mil
2.6%
Data Processing -
$21.5 Mil
Misc. Technical Services 7.8%
- $25.6 Mil
9.3%
Scientific R&D -
$120.9 Mil
44.0%
Looking at Figure 5, we see that the power generation industry (utilities sector) saw an
increase in sales of $14.3 million in FY 2004. This amount is the summation of the direct,
indirect, and induced impacts generated primarily, but not exclusively, by Glenn spending for
electric utilities. $14.3 million represents a 5.2 percent share of the $274.9 million increase in
output value for all industries within the Glenn-driven sectors. Other industries shown in Figure
5 have a similar interpretation.
Figure 6 shows us that restaurants and bars (entertainment and food sector) saw an
increase in sales of $13.9 million in FY 2004. This amount is the summation of the direct,
indirect, and induced impacts generated primarily by Glenn employees and other workers for
food and drink. $13.9 million represents a 7.7 percent share of the $180.7 million increase in
output value for all industries within the consumer-driven sectors. Other industries shown in
Figure 6 have a similar interpretation.
Glenn Research Center’s activities in Northeast Ohio affect job creation beyond Glenn’s
hiring of its own employees (change in final demand). Glenn spending creates employment in
industries from which it purchases goods and services (direct impact) and employment in
industries that provide inputs into those goods and services (indirect impact). In addition,
monies spent by Glenn employees and employees of those companies with which Glenn does
business create jobs in a variety of other industries (induced impact). Total employment impact
equals the sum of Glenn Research Center employment, direct impact, indirect impact, and
induced impact. Table 7 shows the number of jobs created by industry sector.
Real Estate and Rental & Leasing 19.1 48.1 63.9 131.1
c
Change in Final Demand 1,945 Jobs
The total employment impact by Glenn Research Center on the Northeast Ohio
economy is 7,925 jobs. 1,945 of these jobs (24 percent) are directly associated with NASA
Glenn. As a result of Glenn’s direct spending for goods and services purchased in the region,
3,903 jobs (49 percent) were created. The remaining employment impact, 2,076 jobs, is in the
form of indirect and induced impacts as Glenn spending ripples through the economy.
Of the 5,980 jobs created in Northeast Ohio due to the direct, indirect, and induced
impacts, 3,537 (59 percent) are found in the Glenn-driven sectors, 2,187 (37 percent) are in the
consumer-driven sectors, and 256 (4 percent) fall under other sectors.19 Figure 7 shows the job
distribution for select industries within the Glenn-driven sectors. Figure 8 shows the job
distribution for select industries within the consumer-driven sectors.
Facilities Support -
105 Jobs
3.0%
19
See section titled Output Impact on Northeast Ohio for detailed definitions of Glenn-driven, consumer-
driven, and other sectors.
Looking at Figure 8, we see that food and beverage stores (retail trade sector) saw an
increase of 99 jobs in FY 2004 because of Glenn spending. These jobs are the summation of
the direct, indirect, and induced employment impacts generated primarily by Glenn employees
and other workers for food and drink products. The 99 jobs represent a 4.5 percent share of the
2,187 jobs that were created in all industries within the consumer-driven sectors. Other
industries shown in Figure 8 have a similar interpretation.
Earnings impact is the estimated total change in monies paid to local households due to
spending by Glenn Research Center for goods and services from businesses and other entities
in Northeast Ohio. Monies paid to employees of companies and other entities who supply
goods and services to Glenn represent direct earnings impact. Indirect impact is estimated by
summing the monies paid to persons who work for companies that provide inputs to the
producers of the goods and services ultimately consumed by Glenn. Induced impact represents
monies paid to workers in all industries who are employed as a result of purchases by
households whose income is affected by the demand for products and services created by
Glenn. Adding the direct, indirect, and induced impacts to the disposable income and
healthcare benefits received by Glenn employees (final demand change) results in total
earnings impact. Table 8 shows earnings impact by industry sector.
Indirect Induced a
Industry Sector Direct Impact Total
Impact Impact
Utilities $8,097,961 $510,883 $1,246,133 $9,854,976
Construction $11,650,174 $685,268 $393,412 $12,728,854
Manufacturing $1,538,435 $3,261,022 $3,729,137 $8,528,594
Retail Trade $7,395,785 $2,053,082 $10,363,832 $19,812,698
Information $14,955,535 $2,067,906 $2,357,457 $19,380,897
Finance & Insurance $3,000,722 $2,916,376 $6,669,177 $12,586,274
Real Estate and Rental & Leasing $1,584,162 $5,587,707 $6,234,227 $13,406,097
Professional, Scientific & Technical
Services $124,553,791 $5,754,852 $3,800,299 $134,108,942
Administration & Support and Waste
Management $9,568,958 $5,030,329 $2,893,697 $17,492,983
Education $7,141,590 $736,376 $1,205,599 $9,083,565
Health Care & Social Assistance $10,994,972 $32,563 $13,561,213 $24,588,748
Arts, Entertainment, Recreation,
Accommodation & Food Services $4,245,481 $809,315 $5,722,258 $10,777,053
Other Services $3,445,770 $1,584,806 $4,721,906 $9,752,481
Owner Occupied Buildings $7,959,257 $0 $8,904,022 $16,863,279
Government Enterprises $962,305 $484,193 $1,490,642 $2,937,140
b
Other $1,307,949 $2,978,193 $3,182,654 $7,468,796
c
Change in Final Demand $131,415,770
20
See section D.2.1 Output Impact on Northeast Ohio for detailed definitions of Glenn-driven, consumer-
driven, and other sectors.
Power Generation -
All Other Industries -
$9.2 Mil
Legal & Mgmt. Consulting - $21.1 Mil
4.5%
$6.4 Mil 10.4%
3.2% Bldg. Maintenance &
Repair - $12.5 Mil
Academic Institutions - 6.2%
$7.4 Mil
3.7%
Data Processing -
$14.0 Mil
Security - $4.6 Mil
6.9%
2.3%
Facilities Support -
$5.2 Mil
2.6%
Figure 10. Increase in Earnings for Select Industries in Consumer-Driven Sectors (NEO)
Figure 10 shows us that persons working in banking (finance and insurance sector) saw
their household earnings increase by $5.4 million in FY 2004. These earnings are the
summation of the direct, indirect, and induced impacts generated by consumer spending for
commercial banking products. The $5.4 million represents a five percent share of the $107.8
million earnings increase that occurred in all industries within the consumer-driven sectors.
Other industries shown in Figure 10 have a similar interpretation.
Economic activity generated by Glenn Research Center produced the following impacts
on Northeast Ohio (2004 dollars):
The economic impact presented here reflects NASA Glenn expenditures in FY 2004.
During that time period, almost three out of every four dollars was allocated to Glenn payroll,
Glenn contractors engaged in scientific research and development, and academic personnel
engaged in research.
Other industries deriving the most benefit from direct Glenn spending include power
generation, construction, security, facilities support, data processing, and miscellaneous
technical support. Businesses deriving the most benefit from spending by Glenn personnel and
other workers whose earnings are due, in part, to Glenn expenditures follow typical consumer
spending patterns. These include automobile dealers, automobile repair shops, food and
beverage stores, restaurants and bars, insurance carriers, commercial banks, real estate
companies, hospitals, and doctor and dentist offices.
Table 9 shows a comparison of Glenn’s economic impact on Northeast Ohio between
FY 1998 and FY 2004.21
Employment Household
Expenditures Output
(Jobs) Earnings
21
Austrian, Z. & Wolf, A. (2000). The NASA Glenn Research Center: An economic impact study.
Cleveland State University, Center for Economic Development.
http://urban.csuohio.edu/economicdevelopment/publications.htm
Glenn expenditures decreased by 1.2 percent between 1998 and 2004 after adjusting for
inflation. However, the total output impact increased by 4.6 percent during the same time
period. The primary reason for this is that Glenn increased its spending share in Northeast Ohio
from 32.9 percent in FY 1998 to 45.4 percent in FY 2004. In addition, NASA Glenn may have
purchased a larger quantity of specific products and services that have a bigger ripple effect
(higher multiplier) in 2004 than in 1998.
Employment impact decreased by 15 percent. A small reduction in civil service
employees at Glenn between 1998 and 2004 accounts for some of the decrease. In addition,
productivity increases in some affected industries leading to a workforce decrease may also be
a contributing factor.
Finally, household earnings increased by 26 percent—4.3 percent per year—after
adjusting for inflation. Many of the companies that Glenn does business with produce high
value-added products and services, which would contribute to significant earnings increases.
Table 10. Output Impact Based on Glenn Spending in the State of Ohio, FY 2004
Indirect Induced a
Industry Sector Direct Impact Total
Impact Impact
Utilities $13,329,632 $1,966,552 $3,817,369 $19,113,553
Real Estate and Rental & Leasing $2,214,387 $9,656,035 $11,917,222 $23,787,644
c
Change in Final Demand $511,903,638
The total output impact across the state of Ohio as a result of Glenn Research
Center activities was $1.241 billion. Table 10 shows how Glenn expenditures of $460 million
resulted in an increase in output (sales) of $729.2 million across all industry sectors. For
example, Glenn spending affected a $42 million increase in sales (direct, indirect, and induced
impacts) by all manufacturing-related industries.
Forty-one percent ($511.9 million) of the total output impact is accounted for by the
change in final demand that occurs because Glenn activities bring resources into Ohio from
outside the state. Approximately $458 million (37 percent) of the total output impact is a result
of direct spending by Glenn for goods and services purchased within the state of Ohio. The
remaining output impact of $271.2 million (22 percent) is attributable to the indirect and induced
components as Glenn spending ripples through the economy.
An analysis of the IMPLAN model results shows that the $729.2 million increase in sales
generated by the direct, indirect, and induced impacts can be divided into the same broad
categories that were identified for Northeast Ohio—Glenn-driven sectors, consumer-driven
sectors, and other sectors.22 Figure 11 shows the output distribution for select industries within
the Glenn-driven sectors. Figure 12 shows the output distribution for select industries within the
consumer-driven sectors.
22
See section D.2.1 Output Impact on Northeast Ohio for detailed definitions of Glenn-driven, consumer-
driven, and other sectors.
Figure 11. Increase in Sales for Select Industries in Glenn-Driven Sectors (Ohio)
Power Generation -
$16.5 Mil Total: $386.9 Million
4.3%
All Other Industries -
$65.5 Mil Bldg. Maintenance &
16.9% Repair - $28.2 Mil
7.3%
Data Processing -
$21.6 Mil
Academic Institutions - 5.6%
$18.8 Mil
4.9%
Waste Management -
$41.7 Mil
10.8%
In Figure 11, we see that academic institutions (education sector) across the state of
Ohio saw an increase in revenues of $18.8 million in FY 2004. This amount is the summation of
the direct, indirect, and induced impacts generated primarily, but not exclusively, by Glenn
spending for research by colleges and universities. $18.8 million represents a 4.9 percent share
of the $386.9 million increase in output value for all industries within the Glenn-driven sectors.
Other industries shown in Figure 11 have a similar interpretation.
Figure 12. Increase in Sales for Select Industries in Consumer-Driven Sectors (Ohio)
Figure 12 shows us that insurance carriers and brokers (finance and insurance sector)
experienced a sales increase of $9 million in FY 2004. This amount is the summation of the
direct, indirect, and induced impact components generated primarily by Glenn employees and
other workers for insurance products. $9 million represents a four percent share of the $222.8
million increase in output value for all industries within the consumer driven sectors. Other
industries shown in Figure 12 have an analogous interpretation.
impact equals the sum of Glenn Research Center employment and the direct, indirect, and
induced components. Table 11 shows the number of jobs created by industry sector.
Table 11. Employment Impact Based on Glenn Spending in the State of Ohio, FY 2004
Real Estate and Rental & Leasing 21.0 65.3 94.5 180.7
c
Change in Final Demand 1,945 Jobs
Looking at Table 11, we see that employment increased by more than 10,000 jobs
across the state of Ohio due to the presence of NASA Glenn. Of these, 1,945 jobs (19
percent) are directly associated with Glenn. As a result of Glenn’s direct spending for goods
and services purchased in Ohio, 5,087 jobs (51 percent) were created. The remaining
employment impact—2,991 jobs (30 percent)—is in the form of indirect and induced impacts as
NASA Glenn spending ripples through the economy.
Of the 8,078 jobs created in Ohio due to the direct, indirect, and induced components,
4,871 (60 percent) are found in the Glenn-driven sectors, 2,809 (35 percent) are in the
consumer-driven sectors, and 398 (5 percent) fall under other sectors.23 Figure 13 shows the
job distribution for select industries within the Glenn-driven sectors. Figure 14 shows the job
distribution for select industries within the consumer-driven sectors.
Figure 13. Increase in Jobs for Select Industries in Glenn-Driven Sectors (Ohio)
Security Services -
185 Jobs
3.8%
23
See section D.2.1 Output Impact on Northeast Ohio for detailed definitions of Glenn-driven, consumer-
driven, and other sectors.
Due to spending by Glenn Research Center in the state of Ohio, 199 jobs were added in
the data processing industry (information sector) during FY 2004 (see Figure 13). These jobs
are the summation of the direct, indirect, and induced employment impacts generated primarily,
but not exclusively, by Glenn’s need for data services. The 199 jobs represent a 4.1 percent
share of the 4,871 jobs that were created in all industries within the Glenn-driven sectors. Other
industries shown in Figure 13 have a similar interpretation.
Figure 14. Increase in Jobs for Select Industries in Consumer-Driven Sectors (Ohio)
Looking at Figure 14, we see that auto repair shops (other services sector) experienced
an increase of 85 jobs in FY 2004. These jobs are the summation of the direct, indirect, and
induced components generated primarily by NASA Glenn employees and other workers who
need repairs on their cars and other motor vehicles. The 85 jobs represent a three percent
share of the 2,809 jobs that were created in all industries within the consumer-driven sectors.
Other industries shown in Figure 14 have an analogous interpretation.
Table 12. Earnings Impact Based on Glenn Spending in the State of Ohio, FY 2004
Indirect Induced a
Industry Sector Direct Impact Total
Impact Impact
Utilities $8,308,754 $1,041,047 $2,080,519 $11,430,320
Real Estate and Rental & Leasing $1,573,632 $7,013,730 $8,524,994 $17,112,356
c
Change in Final Demand $131,415,770
a
Total is the summation of the direct, indirect, and induced impacts.
b
Other includes the following industry sectors: agriculture, forestry, fishing and hunting; mining; wholesale trade;
and transportation and warehousing.
c
For earnings impact, change in final demand is equal to the disposable income (75 percent of gross income) plus
healthcare benefits paid to Glenn employees.
Figure 15. Increase in Earnings for Select Industries in Glenn-Driven Sectors (Ohio)
Waste Management -
$22.5 Mil
8.1%
24
See section D.2.1 Output Impact on Northeast Ohio for detailed definitions of Glenn-driven, consumer-
driven, and other sectors.
In Figure 15, we see that employees of law and management consulting firms
(professional, scientific, and technical services sector) across the state of Ohio saw their
household earnings increase by $7.4 million in FY 2004. These earnings are the summation of
the direct, indirect, and induced impacts generated primarily, but not exclusively, by NASA
Glenn for legal and management consulting services. The $7.4 million represents a 2.7 percent
share of the $277.6 million earnings increase that occurred in all industries within the Glenn-
driven sectors. Other industries shown in Figure 15 have a similar interpretation.
Figure 16. Increase in Earnings for Select Industries in Consumer-Driven Sectors (Ohio)
Figure 16 shows us that persons working in auto dealerships (retail trade sector)
experienced an increase in household earnings of $4.7 million in FY 2004. This amount is the
summation of the direct, indirect, and induced impacts generated primarily by Glenn employees
and other workers on spending for automobiles and other types of motor vehicles. The $4.7
million represents a 3.6 percent share of the $132 million earnings increase that was reported
by all industries within the consumer-driven sectors. Other industries shown in Figure 16 have a
similar interpretation.
In FY 2004, NASA Glenn’s expenditures in the state of Ohio, excluding the eight-county
Northeast Ohio region, were about $96 million. Almost all of this spending (97 percent) was
allocated to only four industries: scientific R&D ($37.6 million), miscellaneous technical support
($9.0 million), waste management and remediation ($38.1 million), and academic institutions
($8.5 million). The result is that Ohio businesses, excluding those located in the eight-county
Northeast Ohio region, experienced an increase in sales of $176.5 million, added 2,100 jobs,
and saw an increase in household earnings of $106.9 million.
Since major Glenn expenditures elsewhere in the state of Ohio mirrored expenditures in
Northeast Ohio (with the exception of waste management and remediation), industries across
Ohio deriving the most benefit from Glenn spending and spending by NASA Glenn employees
and other workers are the same as those reported for Northeast Ohio.
Table 13 shows a comparison of NASA Glenn’s economic impact on the state of Ohio
between FY 1998 and FY 2004.25
Employment Household
Expenditures Output
(Jobs) Earnings
After adjusting for inflation, NASA Glenn expenditures increased by 0.8 percent across
the state of Ohio between 1998 and 2004. However, the total output impact was almost eight
percent higher in 1998. One explanation for this is the spending by Glenn for waste
25
See footnote 21.
26
In FY 2004, NASA Glenn spent $35.7 million for waste management and remediation. This industry
reports a small ripple effect, i.e., its industry multiplier is relatively low. No equivalent industry spending
was reported in FY 1998. In contrast, about 13 percent of Glenn spending (excluding payroll) in Ohio
was allocated for construction in FY 1998 while Glenn’s spending share for construction in FY 2004 was
about eight percent. Construction industries have a larger ripple effect than waste management, i.e.,
their multipliers are higher. The affect of Glenn spending in these two industries was to raise the total
output impact for FY 1998 slightly above that for FY 2004.
Table A.4 NASA Glenn Detailed Expenditures in the State of Ohio, FY 2004
IMPLAN EXPENDITURE
DESCRIPTION BASIS (3)
SECTOR (1) VALUE (2)
IMPLAN EXPENDITURE
DESCRIPTION BASIS (3)
SECTOR (1) VALUE (2)
(1) Sector: Industry classification code used by IMPLAN. It is analogous to the North American
Industry Classification System (NAICS). IMPLAN provides a cross-reference table bridging
their sector numbers and NAICS codes.
(2) Value: Actual dollar value for a product or service spent by NASA Glenn Research Center
(Glenn) in FY 2004. Values shown in Table A-3 are limited to expenditures made in Northeast
Ohio. For example, Glenn spent $11.3 million on electric utilities (Sector 30). Total Glenn
expenditures in Northeast Ohio were $364.1 million. Thirty-six percent of these expenditures
were for employee salaries and health-related benefits.
(3) Basis: Industries consist of businesses producing goods and services; commodities are the
goods and services. An industry impact gives the entire sector dollar value to the industry
that has been selected. For example, Glenn spent $25.6 million for maintenance and repairs
of its buildings and infrastructure. Therefore, the entire dollar value spent for this work in the
impact analysis is assigned to the construction industry (NAICS 23). A commodity impact
splits the sector dollar value among all industries producing that commodity. For example,
Glenn spent $41,000 on valves. Since Glenn purchased these values from distributors rather
than the actual manufacturer, IMPLAN splits the dollar value among all industries that produce
valves. If these industries are located outside Northeast Ohio, IMPLAN only assigns margin
values (transportation, wholesale, and retail) in the impact analysis.
(4) Households: Household expenditures include Glenn employee payroll and medical insurance.
Payments have been reduced to only include disposable income. In this analysis, disposable
income equals 75 percent of the gross amount. Disposable income excludes income that is
used for savings and to pay taxes.
Table A.4 NASA Glenn Detailed Expenditures in the State of Ohio, FY 2004
IMPLAN EXPENDITURE
DESCRIPTION BASIS (3)
SECTOR (1) VALUE (2)
Utilities - NAICS 22 $11,890,261
Electricity 30 $11,322,349 Industry
Natural Gas 31 $396,352 Industry
Water & Sewage 32 $171,560 Industry
IMPLAN EXPENDITURE
DESCRIPTION BASIS (3)
SECTOR (1) VALUE (2)
Miscellaneous Electrical Equipment 343 $19,663 Commodity
Transportation Equipment 361 $38,026 Commodity
Office Furniture 370 $16,617 Commodity
Ophthalmic Products 378 $14,639 Commodity
Gasket & Sealing Products 385 $2,747 Commodity
IMPLAN EXPENDITURE
DESCRIPTION BASIS (3)
SECTOR (1) VALUE (2)
Other Services - NAICS 81 $62,481
Automotive Repair & Maintenance 483 $1,425 Industry
Commercial Machinery Repair & Maintenance 485 $6,803 Industry
Grantmaking & Social Advocacy 492 $20,000 Industry
Professional Organizations 493 $34,253 Industry
(1) Sector: Industry classification code used by IMPLAN. It is analogous to the North American
Industry Classification System (NAICS). IMPLAN provides a cross-reference table bridging
their sector numbers and NAICS codes.
(2) Value: Actual dollar value for a product or service spent by NASA Glenn Research Center
(Glenn) in FY 2004. Values shown in Table A-4 are limited to expenditures made in the state
of Ohio. For example, Glenn spent $11.3 million on electric utilities (Sector 30). Total Glenn
expenditures across the state were $460.0 million. Twenty-eight percent of these expenditures
were for employee salaries and health-related benefits.
(3) Basis: Industries consist of businesses producing goods and services; commodities are the
goods and services. An industry impact gives the entire sector dollar value to the industry
that has been selected. For example, Glenn spent $25.6 million for maintenance and repairs
of its buildings and infrastructure. Therefore, the entire dollar value spent for this work in the
impact analysis is assigned to the construction industry (NAICS 23). A commodity impact
splits the sector dollar value among all industries producing that commodity. For example,
Glenn spent $41,000 on valves. Since Glenn purchased these vales from distributors rather
than the actual manufacturer, IMPLAN splits the dollar value among all industries that produce
valves. If these industries are located outside Northeast Ohio, IMPLAN only assigns margin
values (transportation, wholesale, and retail) in the impact analysis.
(4) Households: Household expenditures include Glenn employee payroll and medical insurance.
Payments have been reduced to only include disposable income. In this analysis, disposable
income equals 75 percent of the gross amount. Disposable income excludes income that is
used for savings and to pay taxes.