Economic Impact

The Kummer Institute for Student Success, Research and Economic Development will yield significant gains for the state and local economy over time. Through investments in infrastructure, scholarships and basic research, the Institute will serve as a catalyst to expand the economies of Rolla, Phelps County and the State of Missouri. 

Even with average returns, this investment is projected to add $250 million in additional goods and services within the first five years to the Missouri economy. Within a generation, the fruits of this enterprise are expected to result in over $2 billion additional goods and services. As a result, a larger economy, an expanded tax base and the possibility of spillover benefits provide a bright outlook for state and local economies, all due specifically to the presence of the Institute.

Missouri’s recent economic performance has been subpar, and the state is in the midst of a prolonged period of economic stagnation. Between 1997 and 2018, real GDP increased at a 1.05% average annual rate in Missouri — less than half the 2.32% average annual rate for the United States. Also during this 21-year period, Missouri was the 47th-fastest growing state in the union. To understand how the Institute will contribute to the state and local economies, S&T conducted an economic impact analysis based on a model of the economy that describes how productive capacity in Missouri evolves over time.

Through this model it is possible to quantify the value added by investments made through the Institute. Without the Institute, there is no reason to expect that the Missouri economy will grow any faster than it has over the previous two decades. With the Institute, however, the state and local economies will gain significant benefits.

The investment in research facilities and additional faculty and staff offers strong returns. Buildings permit more goods and services to be produced (in this case, higher education and basic research) and basic engineering research generates new solutions to manufacturing problems, improved civil engineering designs and construction processes, new materials, and other new technologies. Similarly, scholarships expand the student body at Missouri S&T, yielding benefits in terms of more people with expanded problem-solving skills.

Table of Economic Impact

TermDiscounted Sum of Additional Real GDP*Discounted Sum of Additional State General Revenues **
5 years $257.4 million $10.4 million
10 years $703.2 million $28.4 million
20 years $1,604.7 million $64.8 million
25 years $2,037.3 million $82.3 million

* Provides the value of final goods and services produced in Missouri, controlling for inflation. So, for example, if the term is 10 years, the economic impact of the Kummer gift would add an extra $703 million to the Missouri economy after discounting the flow back to its value in 2019. (Note the Missouri economy reported real GDP equal to $282 billion in 2018).

** Measures the additional flow of revenues collected by the State of Missouri because the economy has expanded. Consider the span between 2020 and 2040. After discounting back to value in 2019, the projection is equal to an additional $64.8 million in state revenues over that 20-year period.