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#Researchforimpact: SU is a key driver of local economic activity
Author: Research Division
Published: 22/10/2019

​SU has a significant impact on the Stellenbosch Municipal area, a recent study by the Bureau for Economic Research (BER) found.

The aim of the study was to provide a credible and rigorous assessment of the economic contribution of the university on the local economy. This was done by means of an economic impact assessment that used the university's operating and capital expenditure as well as spending by staff and students as an estimate of the initial impact of the university.

Importantly, because the purpose was to estimate the impact on the local economy, the study had to estimate the local proportion of student and staff as well as university spending. For staff and students, surveys were employed to determine the total expenditure and to estimate the proportion of the expenditure occurring within the Stellenbosch region for both local residents as well as staff and students residing outside of the area.

For University expenditure, the location of the supplier also had to be determined to exclude suppliers from outside the region. The spending occurring outside of the region undoubtedly has a significant positive economic impact on the Western Cape, and even South Africa as a whole, but the analysis was restricted to the local impact.

As a result of multiplier effects, the total economy-wide impact of the university community stretches far beyond its initial expenditure in the local economy. Indeed, the study found that the economic impact on output was estimated to be R5, 6 billion in 2018. Output is the broadest measure of economic activity and includes all sales and transactions that were triggered by the initial injection of demand.

*The article appears in the latest edition of the Stellenbosch University Research Publication. Click here to read more.