Integrating knowledge effects into university impact studies. A case study of Aberdeen University

Universities' impacts on their local areas can be divided into spending impacts and knowledge effects. Spending impacts refer to the effects of consumption spending by university staff and students, and of spending by universities themselves on capital equipment and supplies, on income and employment in the local area. Knowledge effects refer to the benefits of the outcomes of university activities, notably the production of highly educated graduates and the production and dissemination of knowledge, to local businesses. Most studies of the economic impact of British universities on their local areas concentrate almost exclusively on spending impacts. In contrast to the studies of British universities, studies of the economic impact of various European and American universities on their local areas have at least sought to identify the nature of knowledge effects. It is an innovative feature of this paper that, in addition to quantifying the spending impact of Aberdeen University on its local area (for the year 1995/96), it attempts to identify and describe the nature of the University's linkages with business through the output of graduates and dissemination of knowledge. The paper also provides suggestions for the direction of further research.