Colby College Releases Economic Impact Report
To help quantify the impact of its significant investments in Waterville, the region, and the state of Maine, Colby College initiated an independent economic analysis, the results of which it announced today.
The study assesses the total economic impact of Colby over the last five years throughout the region. Key findings include:
• Colby’s direct investments in downtown and on campus have contributed to the labor and wage growth in Waterville that is bucking statewide trends. Whereas most of Maine is experiencing declines in population and labor force, Colby’s investments have helped to increase Waterville’s population and labor force by 6 percent compared to Kennebec and Somerset counties, which have experienced an overall population and labor force decline of 2 percent.
• In contrast to Maine’s demographic trends, Colby is attracting employees who are younger and earn higher than average salaries. This is contributing to increasing home values and adding to the city’s tax base.
• While much of Maine has been struggling with a “brain drain” for decades, Colby is contributing to a “brain gain”—it is attracting educated workers, and thousands of students who come to Maine for Colby are choosing to stay in the state beyond graduation.
• Colby set out to create a very strong partnership with Waterville aimed at stimulating economic activity, and early results indicate it may be a model for other cities in Maine and beyond.
“Colby has taken a unique approach to its partnership with the community,” said President David A. Greene. “Five years ago we set out to invest, strategically and intentionally, in the college and the community to ensure the two would work in synergy to create a stronger Central Maine and a stronger Colby over time. Recognizing the importance of assessing whether that effort was bearing fruit, we sought an independent assessment of our investments over five years to see how they have made an impact.”
The independent analysis, which was conducted by leading Maine-based experts in measuring economic impacts, found that over the past five years Colby’s operations, investments, and visitor and student spending supported nearly $1.5 billion in economic output across Maine, of which the majority—$1.1 billion—occurred in the Greater Waterville region.
According to the report, which is available here, in 2018 alone Colby’s presence supported $305 million in sales to local businesses, more than 2,500 jobs, $111 million in wages, and generated $8.7 million in income, sales, and property tax revenue for the region. As the second largest private employer in the Kennebec/Somerset region, the college spent more than $210 million on operational and capital expenditures in 2018, which flowed through nearly 1,000 Maine vendors.
Over the five-year period from 2014 to 2018, Colby invested nearly $176 million in facilities, including $33 million in downtown Waterville. During that same time period, the college made approximately $1.7 million in payments to and for the benefit of the city.
“The revitalization in this area that’s been spearheaded by Colby is clearly driving an outsized economic, employment, and population growth in our community,” said Garvan Donegan, director of planning and economic development for the Central Maine Growth Council. “While we’re already seeing good signs of progress, including rising real estate values and a significant increase in real estate transactions downtown, what’s especially exciting is that this is just the beginning. In fact, the Growth Council is seeing an exceptional level of new leads from businesses that are interested in the Waterville area.”
Attracting Talent and Creating Jobs
In addition to highlighting how Colby’s investments are helping Waterville buck negative demographic trends related to the labor force, employment, and population, the report also addresses the college’s impact on one of the region’s (and Maine’s) most critical problems—the attraction and retention of talented young workers.
According to the study, Colby is creating a brain gain: about 15 percent of alumni—around 3,700—work in Maine, and more than 1,600 who came to Colby from out of state have remained in Maine.
The report also found that over the five-year period from 2014 to 2018, Colby contributed to a 31-percent increase in job growth regionally. Employment at Colby during that period increased by 19 percent, and wages grew by 24 percent, which far exceeds the rates of growth for both the Somerset/Kennebec region (1 percent employment growth and 12 percent wage growth) and the state as a whole (4 percent employment growth and 17 percent wage growth). The median age of new hires in 2018 was 35, significantly younger than Maine’s median age of 44.
“While Colby has always been an economic driver in the region, this report shows that its impact has increased on several measures, from direct contributions to Waterville to attracting a talented new labor force to the state,” said Kimberly Lindlof, president and CEO of the Mid-Maine Chamber of Commerce. “The school is a vital economic engine for Maine, and its recent investments in our community are unprecedented. I haven’t seen this kind of growth and momentum in my 26 years with the chamber.”
A Growing Visitor Destination
According to the report, Colby attracts thousands of visitors to Waterville and the surrounding region each year that results in significant spending at local businesses. Between 2014 and 2018 overnight visitors spent almost $24 million, and students spent $9 million at off-campus businesses.
It’s expected that a variety of new initiatives will continue to further drive visitors to Waterville and increase economic activity. “It’s so gratifying to see how Waterville is increasingly being viewed as a destination,” said President Greene. “In a few years, with the completion of the Lockwood Hotel, Schupf Art Center, streetscape and traffic improvements, and other projects currently underway and in planning, I think we will see many more visitors and a sustainable economy that will continue to fuel the tax base and position the city for long-term prosperity.”
The independent analysis was conducted by Chuck Lawton, Ph.D., Ryan Wallace, Ph.D., USM Maine Center for Business and Economic Research, and Michael LeVert, Stepwise Data Research. The study utilized a dynamic and sophisticated economic modeling, the REMI model, which forecasts a baseline of economic activity and measured Colby’s inputs against that prediction to determine the impacts attributable to the college and its activities.