2022 Utah-MEP Economic Impact Report
21
Section 7.
CONCLUSION Including the multiplying effects, over 4,721 jobs were created
(2) The span of IMPLAN is one year, and it deals with a
that would not have been realized without the assistance
one-time injection into the economy. Therefore, it will
of UTAH-MEP. CMEs/ORBs also reported $390.6 million in
underestimate the total impacts over time due to continual
additional or retained sales, with $61.1 million of that from
retention of the reported additional jobs and sales.
CMEs/ORBs in rural counties.
(3) The model does not consider the “opportunity costs”
When examining the main impact results of UTAH-MEP for
of the inputs, that is, the value of the other uses for the
2022, here are some important points to keep in mind.
money that Utah invested in UTAH-MEP. There may have
(1) These are model results, not survey results. In order to track “actual” impacts rather than modeled impacts, it
been several alternatives for the deployment of these resources, like building roads.
would be necessary to track the actual expenditures made
(4) This model evaluates only the constructive effects of the
by each of these individual clients, their suppliers, and so
investment. It does not take into consideration any of
on. This would, obviously, be very time and cost intensive,
the “destructive” effects—any decline in other in-state
with no guarantee that the firms would supply their entire
firms due to the increase in the clients of UTAH-MEP. This
information. Therefore, these results are modeled using
“creative destruction,” however, is generally viewed as a
the average observed relationship at the state and industry
natural, and even instrumental, effect in an evolving and
levels.
healthy economy.
The estimated impact numbers are large in comparison
UTAH-MEP’s mission of supporting Utah manufacturing and
to the modest investment by the state into the UTAH-MEP.
identifying new opportunities fits closely with Governor Cox’s
This can generate skepticism about the methodology
initiative on creating jobs and growing both rural and urban
used to obtain these numbers. However, “large” numbers
businesses. UTAH-MEP’s capacity is a function of the size of
were expected before modeling even began and the
their consulting staff, and an expansion of this staff should
overall impacts result in a multiplier of 1.79 for output.
increase UTAH-MEP’s overall impact.
This multiplier is fairly consistent with Utah’s economy for several reasons: • The
employee
compensation
for
manufacturing
employees is much higher than that of the employees of other sectors. For example, national manufacturing
In order to fully isolate the complete effects of UTAH-MEP on participating organizations, we would need access to years of sales and operational data from each firm, along with appropriate controls.
employee compensation is, on average, higher than
Large, technology manufacturers tend to dominate the Utah
that of the service industries’ employees. This causes a
manufacturing discussion, but as the preceding results
larger induced effect.
show, smaller manufacturers like composites can produce
• This impact is in comparison to the funding provided to UTAH-MEP. In general, UTAH-MEP’s assistance provides education and helps facilitate changes in small- to medium-sized businesses. Often, a small investment in knowledge can have a large effect on output.
large numbers of new jobs, particularly when given technical assistance. The aggregate effect of employment increases from small- and medium-sized firms is large and contributes to sectors identified as priorities by Utah’s economic development agencies.