1. September 10, 2015 Economic Impact of Scotland’s Colleges

2. Background to set the stage: our “credentials” 1 1 on the agenda… 2 2 Differences in economic impact studies — understand the context for the economic impact results and what they mean 3 3 Results: A broad overview of the results followed by Q & A

3. “Colleges Scotland is the collective voice of the college sector in Scotland; striving to create cohesive and sustainable partnerships, demonstrate positive impact, acting as representatives, and campaigning for the sector” Colleges Scotland mission statement

4. background Economic impact studies: 1,500 + US, UK, Canada, Australia UK: 130 studies, of which 22 colleges have refreshed more than once, 1 university study + regional aggregates

5. differences in impact studies

6. introduction to results 2 2 1 1 3 3 4 4 Total revenue: £658 million Served approximately 270,000 learners 2013/14 Aggregate study, 26 FE colleges Demographics: 48% male, 52% female, 85% white, 15% minority, average age 17 years

7. the EMSI study added workforce skills College and staff expenditures learner taxpayer society Scottish impact (region) Stakeholder investment Two components

8. Scotland’s GDP £ 170 billion Objective: measure how much of GDP is attributable to the colleges NET LEARNER SPENDING ADDED WORKFORCE SKILLS STAFF AND COLLEGE EXPENDITURES impacts of Scotland’s Colleges measured against GDP

9. results: total impact Staff and college expenditure impacts £ 700.8M Added workforce skills impacts £ 14.2B 8.8% of all Scottish income + 593K average wage jobs £ 14.9B/year total £ 14.9B/year

10. ++ Average income at career midpoint and unemployment rates £17,000 £ 18,000 £ 20,000 £ 23,000 Entry SVQ 1 SVQ 2SVQ 3 results: learner perspective >SVQ 3 £34,000 15% 12% 11% 8% 5%

11. results: investment analysis IRR = 14.8% learner perspective tally up higher earnings tally up tuition + opportunity cost of time social perspective (broad) tally up higher earnings + avoided costs tally up all costs to society B/C = 6.3 IRR = 16.4% B/C = 6.3 taxpayer perspective (narrow) tally up increased tax collections + avoided costs tally up taxpayer investments B/C = 5.7 IRR = 15.6%

12. create new income and jobs in the country by stimulating regional economies directly and indirectly through added workforce skills in summary… Scotland’s Colleges collectively… ✓ ✓ ✓ ✓ generate economic benefits far beyond taxpayer costs save £ millions in social costs every year and improve the quality of life greatly increase the lifetime earnings of learners

13. Moving the needle in the future….

14. ? Kjell Christophersen, Founder and Chief Economist, EMSI kjell@economicmodeling.comkjell@economicmodeling.com, +1 208.882.3567 Q & A