The University of California, Davis, powers nearly $9.57 billion in economic impact to the Sacramento metro area and $13.18 billion to the state, supporting 61,700 jobs in the region and 68,300 in the state, according to a new economic analysis.

Aggie Square, the innovation district that opens its first phase on the university’s Sacramento campus in May, is expected to generate about $500 million in regional economic output and support 3,200 jobs annually when all phases are fully built out. At completion, construction — encompassing life sciences labs, housing, offices, academic space and community amenities — is expected to be responsible for more than 12,100 construction-related jobs in the region, with an economic impact of $1.9 billion. Statewide, the numbers increase to $2.32 billion and 13,200 jobs. 

“We know that UC Davis continues to be a powerful engine of economic growth in our region and state, improving opportunities for future generations,” said Chancellor Gary S. May. “Our research and innovation help solve some of the world’s most pressing problems, and we remain dedicated to strengthening the economy in Davis, in Sacramento, around Aggie Square and beyond.”

The numbers are from the economic and fiscal impact analyses by Economic & Planning Systems Inc. finding the university is “a regional economic driver with significant economic impacts.” Direct university spending of $4.45 billion in the local seven-county region and $6.59 billion in the state annually generated impacts of nearly $9.57 billion in the region and $13.18 billion statewide. By supporting businesses that help meet the operational needs of the university, UC Davis generates ripple effects that benefit the entire region. 

The projected $1.15 billion construction spending for all Aggie Square phases — the first of which will culminate in a ribbon-cutting ceremony May 2 — is forecast to result in $1.92 billion in total economic output regionally and $2.32 billion statewide. About 8,300 person-year jobs are estimated to create an additional 4,900 statewide over the construction period. (The number of jobs would be divided by the total years of construction to get an average annual number of jobs.)

The economic impact analysis — which measured how direct employment and spending by the university have secondary benefits to the local, regional and statewide economies — found that every dollar UC Davis spent in the region generated an additional $1.15 in the region. And for every 10 university jobs in the region, it created an additional seven.

Throughout California, every university dollar spent generated an additional dollar of economic activity in the state. And every 10 UC Davis jobs led to the creation of nearly nine non-UC Davis jobs in California. The report did not analyze economic impact beyond California.

The analysis, commissioned by the university, was released today (Feb. 20) at Aggie Square, a joint development with Wexford Science & Technology LLC. With research labs, classrooms, housing and public spaces, the more than 767,000-square-foot Phase 1A will bring together UC Davis researchers and students, industry partners, entrepreneurs and the community to accelerate innovation and bolster quality of life in the region.

“Aggie Square will help transform innovation with the partnerships it creates among industry, scholars, students, entrepreneurs and the community,” said George Baxter, UC Davis chief innovation and economic development officer.

UC Davis Health, with direct economic activity of $1.84 billion in the region and $3.21 billion statewide, was the university’s greatest driver of economic activity. It accounted for more than 42% of the university’s economic activity generated in the local seven-county region and 47% of what the university generated statewide.

A total of $9.57 billion — or nearly three quarters of the total economic activity attributable to the university — benefited the local seven-county region of Yolo, Sacramento, Placer, El Dorado, Sutter, Yuba and Solano counties. 

UC Davis Health leads economic impact

In 2023, UC Davis Health’s direct expenditures of $1.84 billion led to a total economic impact of $4.01 billion in the region, or an additional $1.18 for every dollar. UC Davis Health had 19,144 employees in the region, and the economic activity generated indirectly and by the spending of its employees supported an additional 11,050 jobs in the region.

Considered statewide, UC Davis Health’s direct expenditures of $3.21 billion had an economic impact of $6.26 billion, or an additional $0.95 for every dollar spent. UC Davis Health economic activity generated indirectly and by the spending of its employees supported an additional 3,833 jobs statewide for a total of 34,027 jobs in California.

Fiscal benefit for city and county

The economic impact analysis, using figures from the calendar year 2023, indicated that the university’s direct expenditures of $1.60 billion in Davis generated total economic impact of $1.95 billion in Davis. About 10,400 university jobs supported 1,700 more in Davis. 

The report noted that a relatively small portion of the university’s spending in the city results in further economic activity because of the city’s limited economic base. “Both the indirect and induced impacts in the city of Davis are constrained by the limited economy, with much of the indirect business-to-business spending and induced employee household spending flowing to the larger region.”

The local fiscal impact analysis compared the taxes generated locally by students, faculty, staff and visitors to the costs of providing municipal services to those same populations. It found the university’s net fiscal impact was more than $4.53 million to the benefit of Davis and about $5.77 million to the benefit of Yolo County.  

In other highlights:

• Excluding UC Davis Health, the university’s total spending of $481 million on academic research generates $1.23 billion statewide, and 2,856 jobs in academic research lead to a total of 6,471 jobs statewide.
• UC Davis Health spending on academic research of $474 million and involving 1,460 jobs is responsible for $825 million in economic impact and 3,106 jobs statewide.
• Davis campus construction spending of $836 million and involving 5,815 jobs had an economic impact of $1.54 billion and 9,043 jobs.
• UC Davis Health construction (exclusive of Aggie Square) of $596 million in the region involving 3,986 jobs had a statewide impact of $1.1 billion and 6,286 jobs.