BiGGAR Economics
Economic Impact of University Medical Centres in
the Netherlands
9th June 2014
BiGGAR Economics
Midlothian Innovation Centre
Pentlandfield
Roslin, Midlothian
EH25 9RE, Scotland
+44 131 440 9032
[email protected]
www.biggareconomics.co.uk
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CONTENTS
Page
1
EXECUTIVE SUMMARY ..................................................................................... 1
2
INTRODUCTION ................................................................................................. 2
3
CORE IMPACT ................................................................................................... 7
4
STUDENT IMPACT ........................................................................................... 10
5
VALORISATION IMPACT ................................................................................. 13
6
CATALYTIC IMPACT THE UMC NETWORK ................................................... 20
7
TOURISM IMPACT ........................................................................................... 36
8
IMPACTS OF TEACHING AND LEARNING ..................................................... 40
9
SUMMARY IMPACT AND UMC COMPARISONS ............................................ 42
10
APPENDIX A – ABBREVIATIONS AND TERMS ........................................... 49
11
APPENDIX B – ECONOMIC METHOD STATEMENT .................................... 50
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EXECUTIVE SUMMARY
BiGGAR Economics was asked by NFU to assess the economic impact of eight
University Medical Centers (UMCs) in the Netherlands: Utrecht, Leiden,
Groningen, Erasmus (Rotterdam), Radboud (Nijmegen), Maastricht, VU
Amsterdam and AMC Amsterdam. This is an overview report, which describes
the total impacts of all eight UMCs.
Economic impact was measured in Gross Value Added (GVA) 1 in the economy
and through the number of jobs supported by the organisation.
In 2012 the eight UMCs in the NFU network generated a combined core
economic impact of €12,8 billion (miljard2) GVA. They also supported 150.877
jobs across the Netherlands. This impact was generated through people
employed directly at the UMCs, through the UMCs’ expenditure on supplies,
through the money spent by staff in the local economy and through spending on
capital projects on the site. The figure takes into account the indirect and multiplier
effects of all the direct expenditure and employment.
Student expenditure and student employment (outside the UMC) is worth a
further €0,8 billion GVA to the Netherlands. This supports a further 10.399 jobs.
We have considered six aspects of valorisation and commercialisation activity
supported by the UMCs that can reasonably be quantified in economic terms from
the data provided. We recognise there are further, highly significant, nonquantifiable aspects to this impact which can only be considered in terms of health
benefits and developments in medical knowledge. The aspects of valorisation that
we can quantify are technology licensing, spin-outs and start-ups, and
collaborative research, workforce training, social returns to medical research and
the social impacts of staff time. These have a combined impact which is worth
€4,7 billion in GVA and 30.436 jobs across the Netherlands.
There is an overall catalytic impact of all UMCs in the NFU group from attracting
inward investment and stimulating science park activity across the Netherlands.
This amounts to €1,3 billion in GVA and 19.578 fte jobs.
The tourism impact created by visits to staff and students, visits to patients and
attendance at conferences at the UMCs creates an impact of €14,3 million GVA
and 229 jobs across the Netherlands.
The impact of teaching and learning recognises the increased earnings over a
lifetime that stem from having a degree in a medical or related subject. This
impact is estimated to be worth €726,9 million GVA across the Netherlands and
the induced impacts of this increased earning amounts to 3,893 jobs.
All impacts together suggest that together the UMC network generates a total
impact of €20,4 billion (miljard) GVA and 215.413 jobs across the Netherlands.
The ratio of total impact to the direct impact of an institution gives an indication of
the institutions multiplier effect. The GVA multiplier of the UMCs is 4.30 and the
employment multiplier is 3.78.
1
GVA is a measure of the economic value of goods and services produced in a given area. It
is the total value of output less the value of intermediate inputs.
2
Note: Throughout this report €m refers to €million (miljoen) and €b refers to €billion (miljard).
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2
INTRODUCTION
This report summarises the findings of a study undertaken by BiGGAR
Economics Limited into the economic impact of each of the eight University
Medical Centres (UMCs) in the Netherlands. This is an overview report, which
describes the total impacts of all eight UMCs. It is accompanied by eight
individual reports, one for each UMC, which provide detail about the quantitative
and qualitative economic impacts of each organisation.
2.1
Objectives
The objectives of the study were to quantify the economic impact of the UMCs in
terms of:

their core impact on income and employment;

their student-related impact from student spending and working;

their commercialisation and valorisation activity;

the tourism impact created by activity at each UMC; and

life-time productivity gains from education delivered by each UMC.
For each UMC, these impacts have been assessed on a regional level and on a
national level across the Netherlands as a whole. This document reports on the
national level impacts. The base year for all data is 2012.
2.2
Background
The Netherlands Federation of University Medical Centres (Nederlandse
Federatie van Universitair Medische Centra, NFU) represents the eight
cooperating UMCs in the Netherlands. The NFU was founded in 2004 as a spinoff from the University Hospitals Association (Vereniging Academische
Ziekenhuizen, VAZ), which was established in 1989.
The eight UMCs that make up the NFU are internationally significant: all of them
are included in the 2013-14 THE World University Rankings top 100 universities
for clinical, pre-clinical and health3. They are:

Free University Medical Centre (VUmc), Amsterdam; opened in 1964 as the
teaching hospital of VU University Amsterdam. VUmc was created in 2001 by
the merger of the university’s medical faculty and the teaching hospital.

Academic Medical Centre (AMC), Amsterdam; established in 1983 with the
co-location of two of the city’s hospitals. In 1994 the teaching hospital and the
university’s medical faculty merged to form the first university medical centre
in the Netherlands.
3
The 2013-2014 Times Higher Education World University Rankings' Clinical, Pre-Clinical
and Health table judges world class universities across all of their core missions - teaching,
research, knowledge transfer and international outlook.
http://www.timeshighereducation.co.uk/world-university-rankings/2013-14/subjectranking/subject/clinical-pre-clinical-health
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
University Medical Centre Groningen (UMCG); established in 2005 when
Groningen University Hospital merged with the University of Groningen’s
Faculty of Medical Sciences.

University Medical Centre Utrecht (UMC Utrecht); created in 1999 when
Utrecht University hospital, Wilhelmina Children’s Hospital and the medical
faculty of Utrecht University merged.

Leiden University Medical Centre (LUMC); created in 1996, when the
teaching hospital and Leiden University’s Faculty of Medicine merged.

University Medical Centre St Radboud (Radboudumc), Nijmegen; began as a
teaching hospital in 1956. It was given its current name in 1999, following a
change in the organisation of the hospital and the medical faculty of Radboud
University Nijmegen.

Maastricht UMC+; Academic Hospital Maastricht (AZM) has been operating
since 1950 but has been known by its current name since 1986. AZM and
Maastricht University’s Faculty of Health, Medicine and Life Sciences have
been collaborating since 2008 under the name Maastricht UMC+.

Erasmus MC, Rotterdam; was created in 2002, a partnership between the
medical faculty of Erasmus University Rotterdam and Rotterdam University
Hospital (AZR).
Together, the eight UMCs have an income of over €7 billion, employ almost
57.000 full time equivalent staff, and have over 28.000 students.
Table 2.1: Background UMCs, 2012
Income
Staff (no. fte)
Students (no.)
UMC Utrecht
€ 973,0m
7.657
4.483
LUMC
€ 688,4m
5.678
2.544
UMCG
€ 1.023,9m
8.945
4.999
Erasmus MC
€ 1.236,7m
9.778
3.390
Radboudumc
€ 950,6m
7.227
4.342
Maastricht UMC+
€ 702,7m
5.741
4.096
VUmc Amsterdam
€ 666,0m
5.844
2.445
AMC
€ 841,0m
6.050
2.209
Total
€ 7.082,3m
56.920
28.508
Source: UMCs’ data provided to BiGGAR Economics, March 2014
2.3
Report Structure
This report is structured as follows:

section three presents the economic impacts arising from the UMCs’ core
activity including those associated with direct income and employment, the
purchase of bought in goods and services, expenditure of employees and
capital spending;
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
section four describes the impacts associated with students whilst studying
and spending in the local economy and working part-time in local businesses;

section five describes the valorisation impact associated with the UMCs and
their employees using their knowledge to benefit other organisations,
including the impacts from technology licensing, spin-outs and start-up
companies and collaborative research;

section six describes the catalytic impact that the UMCs have on the Dutch
economy by stimulating investment and the growth of geographic clusters of
life science activity;

section seven assesses the UMCs’ impact on tourism from visits to students
and staff, visits to hospital patients and expenditure at conferences hosted on
the sites;

section eight explores the economic impact arising from the role of higher
education in increasing productivity during the working life of graduates; and

section nine summarises the UMCs’ total economic impact.
Appendix A provides a guide to abbreviations and terms commonly used
throughout the report and Appendix B contains a statement on the methodology
used to calculate the economic impact.
2.4
Methodology
The methodology used to estimate the economic impact of the UMCs is one that
has been in wide usage for at least 20 years. A large number of individual
universities, particularly in the UK and the US, have undertaken economic impact
studies over the last 20 years, and particularly over the last 5 years.
Most relevant to this study is the work that BiGGAR Economics undertook on
behalf of Leiden University and the LUMC. This work began in 2011 with a study
that considered the economic impact of the research activity undertaken by the
two institutions. This study was updated in 2012 and expanded to incorporate the
teaching and other activities undertaken by the two institutions.
BiGGAR Economics has also used a similar approach to estimate the economic
impact of several higher education institutions in the UK and Ireland. Of particular
relevance to this study is work undertaken for the University of Surrey and the
Royal Surrey County Hospital in 2013, which considered the individual and
combined impact of the two institutions. Some other examples of similar studies
undertaken by BiGGAR Economics and others include:

the University of Edinburgh (BiGGAR Economics, 2008, updated in 2012)

the University of St Andrews (BiGGAR Economics, 2010, updated 2012)

the University of Birmingham (Oxford Economics, April 2013);

the University of Britich Columbia (2009, Planning and Institutional Research)

the University of Iowa (September 2010, Tripp Umbach); and

the University of Notre Dame, Indiana (September 2013, Appleseed).
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Perhaps of more direct relevance to the study of UMC economic impacts for NFU
is that the approach has also been used by representative organisations similar to
NFU, and this has been successful in influencing policy.
Examples include the work published by the Russell Group4 on the impact of
research in 2010, which was influential in the UK Government’s decision to
protect research budgets from the 10% cuts that were announced in the 2010 UK
Budget. The Russell Group has recently undertaken further work on the
economic impact of capital projects. This has been based on work undertaken by
BiGGAR Economics, using the same methodology as the UMC study. This report
was launched on 20 May 20145 to help demonstrate how the university sector in
the UK is contributing to economic recovery and growth.
Universities Scotland6 has also published economic impact work of the Scottish
universities sector, using the same methodology. This has influenced Scottish
Government decisions on its approach to tuition fees (which are funded from
taxation revenues for Scottish and EU students, a departure from UK policy) and
on identifying the universities sector as one of seven priority sectors in the
Government Economic Strategy. Universities UK has also used a similar
approach to demonstrate the impact of the higher education sector’s contribution
to the UK economy7.
The approach used for the economic impact of universities and research institutes
is also consistent with Guidance issued by several governments and public sector
organisations. For example, the methodology for the UMCs economic impact is
consistent with the principles set out in European Commission Guidance8 on
major projects, which highlights the importance of assessing the fullest range of
potential economic effects possible.
2.5
Baseline Year and Measures
The economic impacts described in this report are for 2012, which is the latest
year for which published data on income, staff and students was available at the
time of writing, in early 2014.
Economic impact has been reported using two measures:

Gross Value Added (GVA) - which is the measure of the value that an
organisation, company or industry adds to the economy through their
operations. The analysis has used the production approach to measuring this
impact, where the GVA is equal to the value of production less the value of
the inputs used. Typically this is calculated by subtracting the non-labour costs
of the organisation from the organisation’s total revenue.
4
Russell Group (2010), The economic impact of research conducted in Russell Group
universities (available at http://www.russellgroup.ac.uk)
5
Financial Times (20 May 2014), Russell Group universities invest £9bn to attract best
students (the report is being published at http://www.russellgroup.ac.uk)
6
Universities Scotland (2013), Grow Export Attract Support: Universities’ contribution to
Scotland’s economic growth (available at http://www.universities-scotland.ac.uk)
7
Viewforth Consulting Ltd (April 2014), the Impact of Universities on the UK Economy
(available at http://www.universitiesuk.ac.uk/highereducation)
8
European Commission (July 2008), Guide to Cost Benefit Analysis of Investment Projects
[in particular section 2.5 on Economic Analysis] (available at
http://ec.europa.eu/regional_policy/sources/docgener/guides/cost/guide2008_en.pdf)
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
2.6
employment (jobs) is measured in full time equivalent (fte) jobs supported.
Key Economic Assumptions
Each area of impact requires the use of three types of economic assumptions:

turnover to GVA ratio – this is used to estimate the GVA impact of the spend
in an area. It is obtained from data published by Statistics Netherlands for
GDP, production and expenditure, output and income for 2012;

turnover per employee – this is used to estimate the employment impact of
spend in an area and is taken from the same source; and

GVA and employment multipliers – these are used to estimate supplier and
income impact created by businesses that directly benefit from additional
spend in an area.
The starting point for calculating the direct impact of the UMCs is the additional
turnover generated or people employed by Netherlands-based companies as a
result of each UMC’s activities. This turnover is converted into GVA by applying
GVA to turnover ratios for relevant sectors. The employment supported by this
turnover is estimated by multiplying the number of employees by an estimate of
GVA per employee in relevant sectors.
The indirect impacts considered in this report include the effect of purchases
made elsewhere in the supply chain by businesses and their employees. These
impacts are calculated by applying an appropriate GVA and employment
multiplier to the direct impact. This approach captures the impact of subsequent
spending rounds as income is re-spent elsewhere in the economy. A more
detailed economic method statement is contained in Appendix B.
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3
CORE IMPACT
The core impacts of the UMCs include:
3.1

the direct effect (income and employment);

supplier effects (impact of expenditure on supplies and services and jobs
supported by this spend);

income effects (impact of the spending of employees); and

capital spending effects.
Direct Effect
The direct impact of the UMCs is a measure of their direct value to the economy
and number of jobs they provide. The value they add to the economy is
expressed using gross value added (GVA), which can be estimated by adding
together their operating profit and staff costs (this is the same as their total income
less expenditure on supplies).
The GVA and employment directly supported by the UMCs is shown in Tables 3.1
to 3.2. Together, the eight UMCs support 56.920 full-time equivalent (fte) jobs in
the Netherlands economy and have an output of almost €5 billion GVA (€4.733,5
million).
Table 3.1: Direct Effect – GVA
Total (€ million)
Total Income
7.082,3
Less Expenditure on Supplies
2.348,8
Direct GVA
4.733,5
Source: all UMCs
Table 3.2: Direct Effect – Employees
Total
UMCs employees (headcount)
71.792
UMCs employees (FTEs)
56.920
Source: all UMCs
3.2
Supplier Effect
Each UMC buys in a wide variety of goods and services to supply its operation.
The supplier effect is the GVA generated and employment supported in
businesses throughout the UMC supply chain.
A further round of GVA and employment is supported indirectly by the businesses
that supply goods and services to the UMCs and this is calculated using
multipliers for all industries as a whole.
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Table 3.3: Supplier Effect Assumptions – Amount spent on goods and services
Item
€2.348,8m
Total Spending, all UMCs
Source: all UMCs and BiGGAR Economics Assumptions
The total supplier effect for the UMCs is shown in Table 3.4. Goods and services
bought in by the UMCs create over €3 billion GVA (€3.257,1m) and create almost
36.000 fte jobs (35.903) in the Netherlands economy.
Table 3.4: Supplier Effect
GVA (€m)
Supplier Impact
3.257,1
Employees (fte)
35.903
Source: BiGGAR Economics Analysis
3.3
Staff Spending
The people employed directly by the UMCs spend their wages and salaries in the
wider economy and this increases turnover and supports employment in local
businesses and throughout the Netherlands as a whole.
This effect can be estimated by assessing the amount of wages spent in each
study area, based on the number of employees and where they live. Each of the
eight UMCs has been provided with data about the location and value of spend in
their region, as well as their organisation’s individual contribution to the
Netherlands economy. At the national level, the key assumptions used in
calculating staff spending impact are shown in Table 3.5.
Table 3.5 – the UMCs Staff Spending Assumptions
Staff Numbers
Number of FTEs
56.920
Staff Costs (€m)
€4.187,5m
Salaries as % of staff costs
81%
Source: all UMCs and BiGGAR Economics Assumptions
The expenditure figures have been converted into a GVA impact by applying an
appropriate turnover/GVA ratio, which ensures that we exclude from the impact
the tax paid by employees. The income effect estimated here is therefore a
conservative one since it excludes the contribution of employees to the provision
of public services paid for from Government tax receipts.
The employment impacts are calculated by dividing the GVA impact by an
estimate of the average GVA per employee and finally multipliers are applied to
capture the indirect effects of subsequent spending rounds.
This results in a staff spending impact of over €4 billion GVA (€4.192,2m) and
almost 50.000 fte jobs (49.959) in the Netherlands.
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Table 3.6: Staff Spending Impact
GVA (€m)
Staff Spending Impact
Employees (fte)
4.192,2
49.959
Source: BiGGAR Economics Analysis
3.4
Capital Impact
In 2012, the UMCs spent €506,7 million on capital projects. Capital spending
provides an important income stream for the Dutch construction sector and we
can value the economic impact of this income by applying a turnover to GVA ratio
for the sector. The employment impact is estimated by dividing the GVA by the
average GVA per employee for the construction sector. The indirect impacts of
this expenditure can then be calculated by applying GVA and employment
multipliers for the construction sector.
Table 3.7 – the UMCs Capital Spending Assumptions
Capital Spending
Annual Capital Expenditure, 2012 (€m)
506,7
Source: all UMCs and BiGGAR Economics Assumptions
In this way it can be estimated that the total impact of construction expenditure by
the UMCs amounts to €661,8 million GVA and 8.095 fte jobs in the Netherlands.
Table 3.8: Capital Spending Impact
GVA (€m)
Capital Spending Impact
Employees (fte)
661,8
8.095
Source: BiGGAR Economics Analysis
3.5
Summary of Core Impacts
The impact associated with the core activity of the UMCs is from generating
income, supporting employment, spending on goods and services and capital
projects. In 2012 this resulted in a total estimated impact of almost €13billion
GVA (€12.844,6 m) and over 150.000 fte jobs (150.877).
Table 3.9: Summary Core Impact
GVA (€m)
Employees (fte jobs)
Direct Impact
4.733,5
56.920
Supplier Impact
3.257,1
35.903
Staff Spending Impact
4.192,2
49.959
Capital Spend Impact
661,8
8.095
12.844,6
150.877
Total Core Impact
Source: BiGGAR Economics Analysis
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4
STUDENT IMPACT
Students create economic impacts while studying through:
4.1

spending money in the economy; and

impacts arising from their part-time work.
Student Spending
Students create economic impact by spending their income in local businesses,
which employ staff and make purchases from their supply chains.
The starting point for assessing the impact of student spending is to consider the
number of students at the UMCs in 2012 and apply an average expenditure
profile to this total based on information about student living costs.
Our analysis assumes that, on average, students spend €11.700 per year to
cover housing, living and social costs while studying. It should be noted that this
represents the basic minimum income that all students will require in order to
complete their course; however, some students will have a higher income than
this as a result, for example, of additional support from family. For this reason, the
impact of student spending calculated below is likely to be conservative. The key
assumptions used in making these calculations are shown in Table 4.1.
Table 4.1: Spending of students assumptions
Value
Total number of full time students
28.508
Annual Student Expenditure Profile
Rent
5.100
Living Costs
2.400
Transport
780
Health & Liability Insurance
960
Books/ Study materials
660
Social Activities
Total
1.800
€11.700
Source: all UMCs
We have calculated how much GVA this expenditure creates and how many jobs
it supports across the relevant sectors of the economy using national input-output
ratios for each sector. These ratios vary for each sector depending on the relative
amount of capital and labour involved in generating output (see Appendix B for a
more detailed Method Statement).
A further round of GVA and employment is then supported indirectly through this
level of spending (the indirect effect) and this is estimated by applying sectorspecific multipliers to the direct impact. Finally, these figures are added together to
estimate the total impact of student spending (Table 4.2).
Spending by UMC students creates an economic impact of €408,3 million and
4.239 fte jobs in the Netherlands.
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Table 4.2: Summary Student Spending Impact - the UMCs
GVA (€m)
Student Spending Impact
Employees (fte jobs)
408,3
4.239
Source: BiGGAR Economics Analysis
4.2
Part-time Work
Students working part-time can make an important contribution to the labour
market, allowing business to fill jobs and enabling them to increase economic
activity. It is assumed that 75% of students work to supplement their income and
that, in most locations, a proportion (between 7% and 43%) of these jobs are with
the UMCs. The economic activity supported by this 10% has been captured in
the direct impact analysis in the previous chapter, so these jobs have been
excluded from this section of the analysis to avoid double counting.
Consultations about the labour market conditions in each area and the sectors in
which students usually undertake part-time work suggest that the students are
generally not displacing other potential employees; however, it is reasonable to
assume that some jobs may otherwise have been filled by non-students. In order
to reflect that it is assumed that 70% of student part-time employment is
additional. International students have not been considered in this analysis due to
the restricted hours that they are able to work.
The assumptions used in calculating the impact of student part-time work are
shown in Table 4.3.
Table 4.3: Student part-time working assumptions
Value
Number of Students
27.508
Percentage of students who undertake part-time work (excluding
international students)
75%
Additionality of part-time work
70%
Average hours worked per week
14,2
Number of hours worked per week in FTE equivalent job
35
Source: all UMCs, Student Survey evidence and BiGGAR Economics
The value of the additional economic activity (GVA) supported by student
employment is estimated by applying national ratios of GVA/employee for the
sectors in which students typically work. A further round of GVA and employment
is then supported indirectly through this level of spending (the indirect effect) and
this is estimated by applying sector-specific multipliers to the direct impact.
This results in a total impact from student employment of €397,0 million and 6.160
fte jobs in the Netherlands (Table 4.4).
Table 4.4: Student part-time working impact
GVA (€m)
Part-time Working Impact
Employees (fte jobs)
397,0
6.160
Source: BiGGAR Economics Analysis
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4.3
Summary of Student Impacts
The impact associated with student spending and student employment is
estimated at over €800 million GVA (€805,3 m) and 10.399 fte jobs in the
Netherlands (Table 4.5).
Table 4.5: Summary Student Impact
GVA (€m)
Employees (fte jobs)
Student Spending Impact
408,3
4.239
Student Working Impact
397,0
6.160
Total Student Impact
805,3
10.339
Source: BiGGAR Economics Analysis
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5
VALORISATION IMPACT
The UMCs’ valorisation activity capitalises on the research, technology and skills
within each organisation and transfers the benefits of these through the creation
of new businesses and other opportunities. We have considered the impact of six
aspects of valorisation that can reasonably be quantified:
5.1

social returns to medical research;

licensing;

start-up and spin-out companies;

collaborative research;

workforce training; and

social impacts of staff time.
Social Returns to Medical Research
Research by the Wellcome Trust on the value of medical research in the UK
considers two types of return: health gains (net of the health care costs of
delivering them) and economic gains9. The economic gains of medical research
are considered elsewhere in this chapter. This section considers the value of
health gains – these are the wider health returns to patients who ultimately benefit
from the research.
The value of health gains was assessed in the Wellcome Trust report using the
quality adjusted life years (QALY) method10. This is a widely used method
developed by health economists to assess how many extra months or years of life
of a reasonable quality a person might gain as a result of treatment. Although the
QALY method is not perfect, it is widely used and is the accepted method of
evaluating potential NHS treatments in the UK. The economic value of the QALY
improvement delivered by a particular medical intervention can be assessed by
considering the opportunity cost of the investment i.e. by considering what level of
improvement could have been achieved by investing the same resources directly
in frontline services.
The key finding of the report was that the sum of the total health and economic
gains medical research in the UK gave a total rate of return of around 39%. This
included an economic return of 30% and a health gain of just over 9%. This
means that a €1.00 investment in public/charitable CVD research produced a
stream of health benefits thereafter that is equivalent in value to earning €0.09 per
year in perpetuity.
Assuming a discount rate of 5% this implies that over a 20 year period each €1
invested in medical research would deliver a total return of €1.38. The value of
the health care gains from medical research was therefore estimated by applying
this multiplier to the total value of research undertaken by UMCs in the
Netherlands in 2012.
9
Medical Research: What’s it worth? Estimating the economic benefits from medical research
in the UK, For the Medical Research Council, the Wellcome Trust and the Academy of
Medical Sciences, November 2008
10
Ibid.
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Table 5.1: Social returns to medical research
GVA (€m)
Netherlands
Employees (fte)
1.834,7
-
Source: BiGGAR Economics Analysis
5.2
Licensing
One of the main ways in which UMC research activity is translated into economic
activity is through licensing agreements with industry. Licence agreements give
companies the legal right to use a particular technology or other type of
intellectual property (IP) to generate additional sales, reduce costs or otherwise
improve their profitability. In return, companies pay royalties to the UMCs.
The amount of royalties paid depends on the details of the licensing agreement
and this can vary considerably from company to company. In order to agree a
licensing deal, negotiators must first form a view of how much the IP is worth to
the prospective licensee. There are a wide number of variables that may inform
this judgement including potential risks to the company, the technology’s stage of
development, capital investment that might be required and market conditions.
The World Intellectual Property Organisation sets out the “well known and widely
quoted 25% rule”11 according to which the licensor should receive around one
quarter to one third of the profits accruing to the licensee. IP negotiators have
used this rule for at least 40 years.
In 2012 the UMCs earned €22,9 million in royalty income from licence
agreements for technologies. This turnover is converted into GVA by dividing it by
a turnover to GVA ratio for the sectors in which licence agreements are made.
The employment impact is then calculated by dividing the GVA impact by an
estimate of the average GVA added by each employee in these sectors. The
effect of subsequent spending rounds is captured by applying GVA and
employment multipliers.
Table 5.2: Licensing Impact - Assumptions
Value
€22,9m
Licensing Income
Royalties as % of additional turnover generated
5%
Source: UMCs
Using these assumptions we have estimated that the licensing activity of the
UMCs contributes €309,4 million GVA to the economy of the Netherlands and
supports 3.465 fte jobs.
Table 5.3: Licensing - Summary
GVA (€m)
Licensing impact
Employees (fte)
309,4
3.465
Source: BiGGAR Economics Analysis
11
Exchanging Value, Negotiating Technology Licensing Agreements: a training manual,
World Intellectual Property Organisation, 2005.
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5.3
Start-ups and Spin-outs
The UMCs contribute to the economy through the creation of start-up and spin-out
companies.
The GVA economic impact is found by converting the estimated turnover of each
company into GVA by applying industry ratios. The employment impact is found
by applying the relevant GVA to employment ratios. The indirect impact is
calculated by applying sector-specific multipliers to these base figures.
Table 5.4: Start-ups and spin-outs - Assumptions
Value
Number of Start-ups/ Spin-outs
98
Direct employment in spin outs
961
€200.8m
Total Turnover
Source: UMCs
Using these assumptions, the contribution of start-ups and spin-outs is estimated
at €369,3 million in GVA and 3.422 fte jobs in the Netherlands, as shown in the
table below.
Table 5.5: Start-ups and spin-outs (excluding Science Park tenants) - Summary
GVA (€m)
Start-up and Spin-out impact
Employees (fte)
369,3
3.422
Source: BiGGAR Economics Analysis
5.4
Collaborative and Contract Research
The benefits of the research activity undertaken by the UMCs are not restricted to
activity directly undertaken by academic researchers but also include the benefits
of collaborative research ventures with partners both nationally and internationally.
Although the extent of this effect is difficult to quantify, collaborative research is of
such importance to the Dutch economy that it is essential that this impact be
considered.
An important feature of academic research is that it does not typically represent
the final stage of the technology development process. In general it tends to be
focused at an intermediate stage in the technology development cycle and is
unlikely to lead to immediate full scale commercial production or application.
In order for the full results of such research to be realised, it is normally necessary
for industrial partners to undertake further development work. The amount of
subsequent research investment required will depend on the readiness level of
the technology concerned and is likely to vary significantly between projects and
could amount to many times the original investment.
Recognition of the importance of collaborative research amongst economists can
be traced back to the seminal work of Nobel Prize winning economist Robert
Solow12 in 1956. In this work, Solow demonstrated that 87,5% of the increase in
12
Solow, R. (1957), Technical Change and the Aggregate Production Function, Review of
Economics and Statistics, pp. 312-20.
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US labour productivity between 1909 and 1949 could not be explained by
increases in factor inputs of labour and capital. Solow attributed this residual to
technological change.
This led to various attempts by researchers to model the so-called ‘Solow
residual’ using measures such as R&D spending and patenting. Most of these
studies found that R&D spending makes a significant contribution to productivity
growth, with a 1% increase in the R&D capital stock typically leading to a rise in
output of between 0,05% and 0,1%13.
In most European countries, business R&D typically represents between 1% and
2% of total GDP. The Netherlands is no exception to this and data from the
Centraal Bureau voor de Statistiek (CBS) can be used to estimate that in 2009,
business R&D in the Netherlands represented approximately 1,8% of GDP.
It is possible to estimate how much collaborative and contract research is worth to
the economy based on the amount of income the institutions secure from industry
each year. This income represents direct investment by private companies in
research undertaken by academic researchers. It is then possible to calculate the
value of this activity to the Dutch economy by applying an assumed multiplier for
the relevant group of industries.
Previous studies by BiGGAR Economics have found that companies that were
involved with research contracts with Universities generate an average of 360%
direct GVA impact over time. The increased GVA in these companies is
supported by increased employment in these companies. These assumptions
were used to calculate the direct impact of private investment in research and
development at the UMCs. The total economic impact was then calculated based
on the appropriate multipliers and ratios for the industries involved.
Different bodies commission collaborative research and contract research.
Contract research will involve research that is funded by industry and
collaborative research will be funded by a mixture of public bodies, other research
organisations and private companies. This section quantifies the private returns
of this research to the private sector partners. The process for estimating the
economic impact of contract research undertaken for industry and the economic
impact of collaborative research involving industry is the same.
In 2012 the eight UMCs together received €365,8 million in research income for
industry contracts and from collaborative research agreements. The assumptions
used to estimate the impact of collaborative research are presented in Table 5.6.
Table 5.6 – Collaborative and Contract Research Involving the UMCs
Assumption
Contract and collaborative research income
the UMCs
€365,8 m
Private benefits from research
360%
Source: Information provided by all UMCs and BiGGAR Economics Assumptions
It is possible that some of the resulting spill-over activity would have occurred
anyway at other Dutch universities and therefore not all off the impact could be
attributed to the UMCs. However, the international reputation and high
international rankings of every UMC demonstrates that the research undertaken
13
Cameron G (1994), R&D Productivity and the Case for a UK R&D Tax Credit, Nuffield
College, Oxford.
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at these institutions is of a particularly high quality. For this reason, it is reasonable
to assume that most of the impact arising from industrial R&D spill-overs can be
attributed the UMCs.
Applying these assumptions to the amount of collaborative research contract
expenditure suggests that industrial spill-over effects attributable to the UMCs
contribute €1.825,4 million GVA to the Dutch economy each year and support
22.831 fte jobs.
Table 5.7: Impact of Collaborative and Contract Research - Summary
GVA (€m)
Collaborative & Contract Research Impact
Employees (fte)
1.825,4
22.831
Source: BiGGAR Economics Analysis
5.5
Workforce Training
The UMCs provided refresher courses and congresses with over 60.700
participants in 2012. These are for general practitioners, specialists in various
areas of medicine, researchers, doctors in specialist training and PhD students.
These events have an impact by improving the quality of healthcare provision and
research by keeping medical practitioners and researchers up to date with the
latest skills and knowledge. The impact of this will be on improved health
outcomes, which ultimately impact on health, wellbeing and productivity and
improved research outcomes through improved knowledge.
Workforce training is also likely to generate economic benefits. These benefits
could be generated in a number of different ways. For example, training may
enable medical professionals to diagnose and treat patients faster and more
effectively, enabling them to return to work sooner than they may otherwise be
able to and boost the productivity of their employers. Training may also enable
health-care professionals to deliver care more efficiently, which could result in
efficiency savings for the hospitals and surgeries where they work. It is possible
to estimate the economic value of these benefits based on the amount of income
generated from delivering workforce training.
The economic benefits of workforce training accrue directly to the organisation
that the trainee works for. Previous studies by BiGGAR Economics have found
that these impacts can vary significantly depending on the course, industry and
motivations for undertaking the course. However, it was found that the average
business interaction with academia generated 360% GVA for the company. The
total impacts were then estimated by applying the appropriate multipliers for the
industries involved.
The cost of the courses varies depending on the type and the length of the
course, however, this analysis assumes that an average course costs €300 per
participant.
It is further assumed that 40% of attendees on courses work at the UMCs and
therefore their impact has been calculated elsewhere, 60% are from the
Netherlands and 40% from outside the Netherlands. The assumptions used are
set out in Table 5.8.
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Table 5.8: Workforce Training Assumptions
Value
Number of participants on the UMCs refresher courses and congresses
60.737
Average cost of an the UMCs course
€300
% of participants from the UMCs
40%
% of participants from Netherlands
60%
% of participants from outside the Netherlands
40%
Estimated benefit to participant of course as ratio to monetary cost
1:3.6
Source: all UMCs
Applying economic ratios and multipliers results in an impact of €55,6 million GVA
in the Netherlands and supports 719 fte jobs (Table 5.9).
Table 5.9: Workforce Training Impact - Summary
GVA (€m)
Workforce training
Employees (fte)
55,6
719
Source: BiGGAR Economics Analysis
This impact captures some of the GVA gains that might be generated by
providing additional training for health-care professionals. What cannot be
captured is the gains that this training could deliver for patients. For example it is
reasonable to expect that training would enable health-care professionals to treat
patients more effectively and that this would result in improved health outcomes
such as faster or more complete recovery. Such outcomes could have a
significant impact on patient quality of life but it is impossible to capture this in
monetary terms.
5.6
Social Impacts of Staff Time
Staff at the UMCs are often contribute to public and charitable bodies. The staff
contribute their time outwith their contracted hours, however it is their expertise
and association with the UMCs that enable them to contribute to these bodies.
The time of staff is given for free to these bodies and enables these bodies to
benefit from their expertise that is gained in the UMCs. The activities that the staff
participate in include:

contributing to policy development;

contributing to professional organisations; and

volunteering.
It is assumed that the time staff work on social activities is equivalent to 7,5% of
their working hours. Therefore the costs which would be associated with this, if
the public and charitable bodies were to pay equivalently qualified people, is
equivalent to 7,5% of the total staff costs of the UMCs. This takes into account
that more senior staff are likely to spend a higher proportion of their time on such
activities, while junior staff are unlikely to spend as much time. This estimates the
total value of staff’s contribution to these bodies to be €314,1 million.
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Table 5.10: Social Impacts of Staff Time
Value
Proportion of staff time on social activities
7,5%
Value of staff time on social activities (€m)
314,1
Source: BiGGAR Economics Assumption
5.7
Summary of Valorisation Impacts
The combined impact due to valorisation activity generated by and sustained by
the UMCs is over €4 billion GVA (€4.040,5 million) and 24.910 fte jobs in the
Netherlands (Table 5.11).
Table 5.11: Summary Valorisation Impact
GVA (€m)
Social Returns to Medical Research
Employees (fte jobs)
1.834,7
-
Technology Licensing Impact
309,4
3.465
Spin-outs and Start-Ups Impact
369,3
3.422
1.825,4
22.831
55,6
719
314,1
-
4.708,5
30.436
Collaborative Research
Workforce Training
Social Impacts of staff time
Total Valorisation Impact
Source: BiGGAR Economics Analysis
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CATALYTIC IMPACT THE UMC NETWORK
6
The previous chapter focused on the economic impacts generated by the UMCs
work with individual companies. It is however also important to acknowledge the
wider catalytic impact that the UMCs have by acting as anchors for the wider life
science sector. This chapter considers this wider catalytic impact.
6.1
The Dutch Life Science Sector
The life science sector has been identified by the Dutch government as a top
sector due to its current strong position and scope for growth. It is estimated that
in 2010/11 the Dutch life sciences and health sector14:

included 343 companies;

supported 22.732 jobs;

generated €17,8 billion in revenue; and

stimulated over €2 billion investment in research and development.
The Netherlands ranks fourth in the mobilisation of European funds for life
sciences research and ranks 8th world wide for the number of life sciences and
health patents. The UMCs are the cornerstone of this sector and play an
important role in helping to stimulate and retain investment both by indigenous
companies and those based overseas.
The life sciences and health sector creates economic value directly in terms of
jobs supported and indirectly because of the greater productivity and reduced
health care costs associated with having a healthier population. The sector also
creates social value because healthier individuals will have an increased level of
personal wellbeing, which will in turn enhance the wellbeing of those around
them.
6.1.1
Approach to Quantifying Catalytic Impact
This chapter takes a bottom up approach to estimating the scale of the catalytic
impact associated with the NFU UMC network by considering various important
initiatives and areas of activity that each UMC has contributed to. This involves:
14

estimating how many jobs are supported by each area of activity;

identifying how many of these jobs may have already been considered
elsewhere in this report;

making an appropriate adjustment to the gross employment estimate to avoid
double counting;

converting the remaining direct employment impact into direct GVA by
applying relevant turnover/GVA ratios;

estimating the indirect impact of this activity by applying appropriate sectorspecific multipliers to the direct GVA and employment impacts.
Dutch Life Sciences & Health Outlook 2013, The Decision Group
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It is however important to acknowledge that in most areas of activity the UMCs
work collaboratively rather than in isolation. This means that although some of
the sources of impact described in this chapter may be closely associated with a
particular UMC, it is likely that all the UMCs have contributed in some way to
realising the impact.
The overall effect of this is to increase the total value of catalytic impacts
generated by the UMC network as a whole. This means that the impact
generated by the UMCs as a group are greater than the sum of their parts.
The key components of the catalytic impact considered in this chapter include:
6.2

the value that the UMCs add to the hospital sector in the Netherlands;

the contribution that the UMCs have made to the development physical
clusters of medical research activity including science parks;

the contribution that the UMCs have made to the development of the Dutch
clinical trials sector;

the role the UMCs have played in attracting and retaining life sciences and
health-related investment in the Netherlands.
Adding Value to the Dutch Hospital Sector
In 2012/13 the NFU UMCs employed a total of almost 71.800 staff who treated
around 1,5 million patients. The scale of this activity makes a huge contribution to
the capacity of the Dutch Hospital sector but the way in which the UMC model
operates means that the impact of this is greater than suggested by these raw
numbers.
One of the reasons for this is due to the collaborative relationship that exists
between the UMCs that has enabled each of the NFU UMCs to focus on
developing different medical specialisms. This means that rather than competing
with each other the UMCs have been able to concentrate on developing expertise
in specific areas in which they excel. The result of this is that the total pool of
medical expertise available to the Dutch population is greater than it would be if
each of the UMCs operated in isolation.
The specialisms developed by the UMCs also helps to enhance the quality of
service delivered by other hospitals. This is because individual hospitals can call
on the UMCs to help treat patients with complex needs or who require specialist
treatment. This means that other hospitals do not have to maintain the skills to
treat relatively uncommon conditions or perform specialist procedures in house.
Instead they are able to concentrate resources on more routine medical
procedures.
The UMCs also add value to the hospital system by enabling innovative solutions
to be identified for complex problems. This is often made possible because the
UMCs provide an environment in which specialists from different areas and even
other academic areas can collaborate with each other. For example, VUMC has
developed particular expertise in medical imaging, which has been made possible
in part by drawing on the physics research strength of VU University. By
combining expertise from different areas the UMCs are therefore often able to
deal with more complex medical challenges than might otherwise be possible,
adding value to the Dutch hospital system as a whole.
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In some UMC’s there are also strong groups focused on health technology
assessment. These groups provide policy makers and insurance companies with
valuable advice, which helps to optimise the Dutch healthcare system.
The UMCs have created an ecosystem for research and innovation in the
Netherlands by providing a mix of facilities and research infrastructure and an
effective link between partners in business and the public sector. This rich and
varied environment enables problems and challenges to be tackled in a variety of
ways and increases both the likelihood of solving a problem and increasing the
efficiency of the solution.
The UMCs are an important part of the research base in the Netherlands, both in
themselves and together with universities. Together the academic research base
collaborates with the public sector and businesses on research projects, which
improve healthcare and create social and economic impact. This is shown by the
wide variety and number of public and private partnerships in the Netherlands.
Some examples of important public-private partnerships in include:
6.3

the Center for Translational Molecular Medicine (CTMM) - this Centre
aims to significantly reduce the burden of chronic diseases and improve the
quality of life for patients by providing new diagnostic technologies and
involves all eight UMCs along with other universities and more than 90
companies working on 25 projects with a budget of €302,7 million;

Top Institute Pharma (TI Pharma) – this partnership brings together
researchers from industry and academia to work on innovative,
multidisciplinary research aimed at improving the development of socially
valuable medicines. The partnership supports pre-commercial research that
would be difficult or impossible for individual companies to perform and acts
as an interface between academic and industrial research; and

Biomedical Materials (BMM) – BMM was established in 2007 as a precompetitive initiative designed to being together partners from the public and
private sector to develop innovative solutions to help cure a variety of
diseases. To date BMM has brought together more than 50 partners in a
collaborative venture to develop new therapies and products to compat organ
and tissue failure and now has a portfolio that includes 18 pre-clinical projects.
Clusters and Business Parks
The Netherlands has a range of regional Life Sciences and Health clusters. This
section describes how the UMCs have contributed to the development of some of
the largest and most important sub sectors within the Dutch life sciences and
health sector.
6.3.1
Medical Delta
The Netherlands Medical Delta is a research driven life sciences and medical
technology cluster situated in the west of the Netherlands15. Its mission is to
stimulate the economic growth and provide healthcare solutions by developing,
transferring and implementing new knowledge in life science and medical
technology. Its goals are:

15
improved, less invasive and earlier diagnosis, which allows earlier and more
http://www.medicaldelta.nl
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effective treatment. In some cases it can even prevent disease manifestation;

personalized and less invasive therapy, which results in better/more effective
treatments with fewer side effects; and

better aftercare and monitoring, which allows patients to recover more quickly
and remain healthy, contributing significantly both to patients’ quality of life
and the flow through the healthcare chain.
The Delft-Leiden-Rotterdam region plays host to a concentration of healthcare
centres, technological and scientific expertise and the largest cluster of life
sciences companies in the Netherlands. It includes:

Leiden UMC;

Erasmus UMC;

Leiden University;

Erasmus University Rotterdam; and

Delft University of Technology.
The Medical Delta institutes fuel many joint professorships and joint educational
programs at BSc-PhD level in life sciences, biomechanical engineering, molecular
sciences and entrepreneurship.
In last 3 years the Medical Delta institutes started around €30million worth of extra
projects with industry and has stimulated further activity in the Life Sciences and
Health sector for example Delft University of Technology have chosen Health as
one of its main focus areas for the coming decades.
Within the cluster there are around 300 companies of which 80 are at the Leiden
Bio Science Park. Incubators in Rotterdam, Leiden and Delft host over 40
medical technology related start-ups. The cluster employs 18.636 people and has
an annual turnover of over €10 billion per year.
As there are five partners involved in the Medical Delta it was assumed that 40%
of the employment supported by the cluster could be attributed to the presence of
the two UMCs.
As some of the companies located within the cluster will be spin-outs from LUMC
and Erasmus MC the direct employment supported by spin-outs from these two
institutions was excluded from the total employment within the cluster in order to
avoid double counting. It is also likely that the UMCs will licence technology to or
undertake contract research on behalf of companies that are part of the cluster.
To avoid double counting the direct employment supported by licencing and
collaborative research activity undertaken by LUMC and Erasmus MC was
therefore also excluded from the gross employment supported within the cluster.
In this way it was estimated that around 6.900 of the 18.636 jobs within the
Medical Delta can be attributed to the UMCs and have not been considered
elsewhere in this report.
6.3.2
Amsterdam BioMed Cluster
The Amsterdam Metropolitan Area has the highest concentration of Life Science
and Health research in the Netherlands. According to the Amsterdam BioMed
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Cluster, the independent innovation network for the sector, almost 400 Life
Sciences companies and organisations are based in the region and that the
sector employs 4,640 dedicated life sciences employees. The fact that
Amsterdam is home to not one but two university medical research centres has
been key to the successful development of the sector so it is reasonable to
attribute some of the employment supported by these companies to the UMCs.
In order to estimate the scale of the UMCs’ contribution to the development of the
sector it was necessary to consider how the knowledge developed within the two
UMCs is transferred into industry. An important vehicle for achieving this is the
Life Sciences Centre Amsterdam.
The Life Sciences Centre Amsterdam was established by six academic research
partners (AMC, VUmc, the Netherlands Cancer Institute, Sanquin Blood Supply
the University of Amsterdam and UM University Amsterdam). The objective of
the Centre is to provide a single point of entry that enables industry to access
innovative biomedical technologies developed by the six partners. This approach
removes any confusion within industry about who or which institution to approach.
As this is one of the main barriers that industry often identifies to working with
academia it is reasonable to conclude that the Life Sciences Centre Amsterdam
has enabled the sector to grow more than it otherwise would have.
Another important vehicle for achieving this is Amsterdam Science Park, with 120
companies and 550 employees in multi-tenant buildings. Amsterdam Science
Park is a joint development by the University of Amsterdam, the City of
Amsterdam and the Netherlands Organisation for Scientific Research.
In order to quantify this impact it was assumed that the impact of the Amsterdam
biomedical cluster was attributable equally to the six academic research partners
referred to above. This implies that a third of the jobs in the sector could be
attributed to the two Amsterdam based UMCs.
Some of these jobs are likely to be in spin-out companies from the UMCs, in
companies that the UMCs licence technologies to or undertake contract research
for. As the impact of this activity was considered in the previous chapter it was
therefore necessary to exclude the jobs directly supported by this activity here to
avoid double counting.
In this way it was estimated that around 61 of the 4.640 jobs within the
Amsterdam Biomedical Cluster can be attributed to the UMCs and have not
been considered elsewhere in this report.
6.3.2.1
The Pan-Amsterdam Technology Transfer Office
The Pan-Amsterdam Technology Transfer Office (TTO) that was founded in
2013. The TTO was established as a joint centre of expertise to serve AMC,
VUmc, the University of Amsterdam (UvA), VU University Amsterdam (VU) and
the Amsterdam University of Applied Science. In the future the Pan Amsterdam
TTO will provide comprehensive and integral valorisation services for the entire
scientific community of the five institutions. It is expected that the Pan-Amsterdam
TTO will help to significantly increase the scale of the Amsterdam Bioscience
Cluster in the future.
6.3.3
Rotterdam Science Tower
The Rotterdam Science Tower is a 21 storey tower that is part of a land mark
development on the edge of Rotterdam city centre, which opened in October
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2012. The Tower is a collaborative initiative involving Erasmus MC, real estate
company VALAD and the city of Rotterdam. It is intended to become the first step
in creating an international health and life sciences business area in Rotterdam.
The Science Tower provides 15,000 sq meters of laboratory and office space
specifically designed to meet the needs of growing biomedical companies and
start-ups. It is hoped that collaborative agreements between the partners will help
to foster greater engagement between industry and academia and enable the
area to become a hotspot for international life science innovation.
The Science Tower is currently home to a small number of groups and
organisations. The main commercial tenant is Viroclinics Biosciences, which was
founded in 2001 to provide virological services and consultancy and now employs
around 60 people. As this company is a spin-out from Erasmus MC the impact of
this employment has already been considered elsewhere in this report and is
therefore excluded here.
6.3.4
Maastricht Health Campus
Maastricht is rapidly developing into one of the most important centers in Europe
for healthcare related research. Much of this activity is focused around the
Maastricht Health Campus, which is being developed by Maastricht UMC+. The
Priority research areas on the Health Campus include:

mental health and brain research;

cardiovascular diseases;

metabolic aspects of chronic diseases and cancer; and

public health and primary care.
The Health Campus also has unique facilities such as the Tesla scanners and the
Clinical Trial Centre Maastricht.
Research undertaken in 201216 found that around 900 people were employed on
the Maastricht Health Campus. This research also found that 28 of the 53
companies located on the Campus were spin-outs. As the impact of spin-outs
was considered in the previous section, employment in these companies was
therefore excluded here to avoid double counting.
It is also likely that some of the remaining companies on the Park also have
relationships with Maastricht UMC+. For example, they may licence technologies
or might have commissioned the UMCs to undertake collaborative research. In
order to account for this it was assumed that a total of 55% of employment on the
Campus has already been considered elsewhere in this report.
In this way it was estimated that around 405 of the 900 jobs located on the
Maastricht Health Campus can be attributed to the UMCs and have not been
considered elsewhere in this report.
6.3.5
Chemelot Campus
Chemelot Campus BV was incorporated in 2012 to develop the Chamelot
Campus. The ambition of the Campus is to become the main European
operating site for companies and educational and research organisations in the
16
Buck consultants International (November 2012), Actueel beeld campussen in Nederland
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field of chemistry and materials. The focus of the Campus will be on three
sectors:

High-performance materials;

Biomedical materials; and

Biobased chemicals and materials.
It is expected that this development should result in the creation of 1.550 jobs
between 2014 and 2034. At the same time it is expected that the number of
students will increase by 750. Continued growth in the number of new businesses
starting up, an increase in the number of patents approved and a positive effect
on knowledge institutes are also expected.
Maastricht UMC+ is one of the main stakeholders behind the Chamelot Campus
initiative and has been heavily involved in its development to date. Maastricht
UMC+ is for example involved in the Aachen-Maastricht Institute for Biobased
Materials (AMIBM), the Chemelot Institute for Science and Technology (InSciTe)
the Chemelot Innovation and Learning Labs (CHILL) and Enabling Technologies
BV. Although not all of these projects have been fully developed yet they are
expected to play an important role in realising the potential impact of the
Chemelot Campus.
6.3.6
Groningen Healthy Ageing Campus
UMC Groningen is the focus of a large life sciences and health cluster in the
northern Netherlands, which is considered one of the top three life science
locations in the Netherlands.
At the heart of this cluster is the Healthy Ageing Campus where UMC Groningen
is based. At around 1km in length and covering an area of around 30 hectares
the campus occupies a prominent position in the field of healthy ageing. It is a
place where high-quality research and education, knowledge-intensive business
and government work together.
According to the Buck report referred to above around 420 people were employed
on the Healthy Ageing Campus in 2012 (this excludes employment in QPS, which
is considered in section 6.4.3). Although all of this employment can be attributed
to the UMCs virtually all of it is within spin-out companies, the impact of which was
considered in the previous section. For this reason the impact of the employment
supported on the Healthy Ageing Campus was not included as part of the catalytic
impact considered in this chapter.
6.3.7
Mercator Technology and Science Park
The Mercator Technology and Science Park was founded in the mid-1990s as a
public-private initiative involving Radboud University in Nijmegen. The Park was
designed to provide an interface between scientists and entrepreneurs and to
enable businesses on the cutting edge of academic knowledge to collocate with
relevant academics. The Park is located on the campus of the University of
Nijmegen and within walking distance of the UMC, and the strong research
expertise in language, speech and cognitive neuroscience.
The 2012 Buck Consultants International report referred to above estimated that
1.100 people worked on the Mercator Science Park. Although medical and life
sciences is an important focus of activity on the Park, it is not the only sector
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represented on the Park. For this reason it was assumed that 50% of jobs on the
Park might be associated with the UMC.
According to the Buck report 50 of the 75 companies located on the Park in 2012
were spin-outs (i.e. 40% of companies). As the impact of spin-outs was
considered in the previous chapter, 40% of employment on the Park was
therefore excluded to avoid double counting. It is also likely that some of the
remaining companies on the Park also have relationships with the UMCs – for
example, they may licence technologies or might have commissioned the UMCs
to undertake collaborative research. In order to account for this a further 10% of
employment on the Park was therefore excluded to avoid double counting.
In this way it was estimated that around 275 of the 1.100 jobs located on the
Mercator Technology and Science Park can be attributed to the UMCs and
have not been considered elsewhere in this report.
6.3.8
Utrecht Science Park
The Utrecht Science Park is an important cluster of life sciences activity in the
Netherlands. According to the Buck report cited above, around 900 people work
on the Utrecht Science Park, around half of whom work for Danone. As the
impact of Danone’s investment in Utrecht is discussed below, these employees
are therefore excluded here to avoid double counting.
UMC Utrecht was one of five founding partners involved in the creation of the
Utrecht Science Park, which now covers an area of more than 300 hectares. The
Park is home to more than 60 companies, half of which are life science
companies. Both the UMC Utrecht and Utrecht University are based on the Park
along with more than 2.000 student apartments, making the area the focus of
daily activity for more than 50.000 people. Described as the “motherboard” of the
regional economy it is estimated that 20.000 people work at the Park.
It is expected that around €1 billion will be invested in new capital investment on
the Utrecht Science Park over the next two to three years. These investments will
include:

a new life sciences business incubator (the second on site), which will provide
an additional 4.000 square meters of space for life sciences spinouts;

a replacement building for the National Institute for Public Health and the
Environment, which employs around 1.500 people;

new student accommodation, which could bring the number of student
apartments on site to around 5.000; and

an expansion of UMC Utrecht to accommodate the new Antonie van
Leeuwenhoek Hospital and the Princes Maxima Centre for Pediatric
Oncology.
UMC Utrecht is one of three academic partners involved in the Utrecht Science
Park (along with Utrecht University and Utrecht University of Applied Science. For
this reason it was assumed that one third of employment in the Park could be
attributed to the UMCs. The Buck report cited above suggests that half of the
companies located on the Park are spin-outs. As the impact of spin-outs was
considered in the previous chapter, half of the employment in the Park was
therefore excluded here to avoid double counting.
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In this way it was estimated that around 75 of the 900 jobs located on the
Utrecht Science Park can be attributed to the UMCs and have not been
considered elsewhere in this report.
6.3.9
Summary Assumptions
This section has estimated that the various science parks and geographical
clusters of life science activity that are closely associated with the NFU UMCs
directly support more than 26.200 jobs across the Netherlands. It has also
estimated that approximately 7.700 of these jobs can be attributed to the UMCs
and have not been considered elsewhere in this report. A breakdown of this
employment is provided in Table 6-1.
Table 6-1 – Employment supported in science parks and geographical clusters
Total
employment
supported
Employment
attributable
to UMCs
and not
counted
elsewhere
18.636
6.900
4.640
61
Rotterdam Science Tower
60
-
Maastricht Health Campus
900
405
Healthy Ageing Campus, Groningen
420
-
1.100
275
450
75
26.206
7.716
Science Park/Geographic Cluster
Medical Delta (including Bio-Science Park Leiden)
Amsterdam Biomedical Cluster (Including Amsterdam
Science Park)
Mercator Science Park
Utrecht Science Park (excluding Danone)
Total
Source: BiGGAR Economics Analysis
6.4
Life Science and Health Sector Investment
Many of the key players in the Life Sciences and Health sector are multi-national
corporations with operations all over the world. This means that investment
location decisions are global and that locations around the world must compete
fiercely to attract and retain investment.
The global outlook of these types of companies means that investment location
decisions are generally not made on the basis of colocation with one particular
research organisation (although this is sometimes an important factor). Rather
decisions are made on the basis of the overall quality of the research base within
a particular geographic area and the ease with which the company may be able to
access this from a particular location.
The Netherlands is a relatively small country with excellent transport infrastructure
so the facilities of all Dutch research institutions are relatively easy to access from
anywhere in the country. This means that regardless of their physical location
multi-national corporations that decide to locate in the Netherlands generally do
so on the basis of research infrastructure available across the whole country
rather than in any specific city.
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For this reason the combined impact of the eight UMCs that work together under
the umbrella of the NFU can be regarded as more than the sum of the parts of the
individual institutions. This is illustrated by the fact that some of largest
companies operating in the Dutch Life Sciences and Health sector collaborate
with many of the individual UMCs across the country.
This has contributed to the Dutch economy in two main ways, by:

attracting investment for multi-national companies based elsewhere in the
world; and

helping to ensure that investment by Dutch based multi-nationals is retained
within the Netherlands.
These effects are illustrated below by considering the examples of how the UMCs
have helped to attract, retain or stimulate investment across the Netherlands.
6.4.1
Philips
Royal Philips of the Netherlands is a diversified technology company, focused on
the areas of healthcare, consumer lifestyle and lighting. Philips global
headquarters is based in Amsterdam but the company has operations all over the
world, employing approximately 115.000 people in more than 100 countries and
generating sales that amounted to €23,3 billion in 2013.
Healthcare is an important and growing area of activity for Philips, accounting for
approximately 37.000 of the company’s global workforce. The company is a
leader in cardiac care, acute care and home healthcare. In order to develop and
maintain this position Philips has invested in partnerships with research
institutions all over the world.
Although Philips is a Dutch company it is also a multi-national corporation. This
means that in theory research investment could have been undertaken anywhere
in the world. The fact that Philips has instead chosen to maintain and grow its
main research headquarters in Eindhoven in the Netherlands is therefore a
testament to the quality of the Dutch research base. Given the importance of
healthcare to the company, it is reasonable to conclude that the quality of medical
research in the Netherlands – particularly within the UMCs - must have been an
important factor in this decision.
Approximately 1.500 Philips employees work at the Philips research head
quarters in Eindhoven and it was assumed that 50% of these jobs were related to
healthcare research. Due to the extent of collaborative activity that occurs
between Philips and the UMCs it was assumed that the UMCs have been
extremely important to retaining this activity in the Netherlands. As the impact of
collaborative industrial research has already been considered in the previous
chapter, only 50% of these jobs are considered in this section to avoid double
counting.
Using these assumptions it was estimated that around 375 jobs supported
in the Philips research HQ in Eindhoven and a further 50 at UMC Utrecht are
attributable to the UMCs and have not been considered elsewhere in this
report.
It is worth noting that this could underestimate the full impact of Philips research
investment in the Netherlands. This is because Philips employs people all over
the Netherlands, not just in Eindhoven. The reason for excluding employees
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elsewhere in the Netherlands is to avoid double counting because some of these
employees may be based in science parks that have been counted elsewhere in
this report.
6.4.1.1
Maastricht UMC+ and Erasmus MC
Researchers at Maastricht UMC+ collaborated with Philips to create a new
method to analyse CT scans of the heart that can be used to better predict heart
attacks. A CT scan can show whether arteriosclerosis is present in the coronary
arteries; however, with new analysis software developed by Philips, it is possible
to precisely determine how much atherosclerosis is present and to determine its
composition.
Together, Maastricht UMC+ and Erasmus MC investigated more than 1,600
patients who were referred for a CT scan of the heart and demonstrated a much
better prediction of the risk of heart attack, allowing appropriate preventative
treatment. The editor of the Journal of the American College of Cardiology in
which the research is published, indicates that "this is a major step forward in
better identify patients at high risk."
6.4.1.2
VUmc
Philips and VUmc have signed an agreement to jointly research new multimodality imaging solutions aimed at improving the early detection and treatment
of diseases such as cancer and neurological and cardiovascular diseases.
By combining data from different imaging modalities to increase the visibility of
structures of interest and by mapping biological processes such as metabolism
onto these images, new multi-modality imaging solutions could help clinicians to
determine the presence and extent of many diseases at an earlier stage. This
diagnostic information could then help them to plan and guide minimally-invasive
interventions. It is expected that such solutions will contribute to more timely and
more personalized treatments for patients and improve treatment success rates.
Both parties will work on the development of next-generation medical imaging
procedures, with initial projects focusing on nuclear imaging.
6.4.1.3
UMC Utrecht
In 2012, UMC Utrecht, Utrecht University, Eindhoven University of Technology
and Philips announced their intention to share their knowledge, expertise and
capacity for innovation to research and develop new methods for disease
diagnosis and treatment based on medical imaging. Through the establishment
of the Institute for Diagnostic and Interventional Imaging (IDII), they focus on more
effective treatments for cancer, brain disease and cardio-vascular disease.
The consortium will focus on the development of new image-guided minimallyinvasive treatments based on MRI and X-ray imaging. It is increasingly possible
to carry out treatments using a catheter or needle rather than having to perform
open surgery. In some cases, treatment can be given without making any incision
in the patient at all − for example, using image-guided radiation therapy based on
X-ray radiation or ultrasound waves. Because such treatments can be performed
more targeted and less invasively, patients may be able to leave hospital sooner
and recover more quickly. Both of these create economic benefits.
The consortium partners also share facilities, such as the clinical laboratories of
UMC Utrecht and the scanner technology research facilities at High Tech
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Campus Eindhoven. The consortium’s outputs will be translated into the industrial
manufacturing of new systems that can be used in clinical practice. Philips'
development and production site in Best will play an important role in bringing to
market new solutions that arise from the partnership and in bringing them closer
to the patient. In the future, the cooperation will be expanded to include other
private partners as well.
As a result of this collaborative activity, Philips has chosen to locate 50 engineers
at UMC Utrecht.
6.4.1.4
Radboudumc
Google Glass is a wearable computer with an optical head-mounted display that
is believed to have a number of potential applications within the healthcare sector.
For example, it could enable medical students to watch procedures from the
surgeons’ perspective and even make recordings to use at a later date or to
document the procedure. It is even possible that the technology could be used to
enable clinicians located elsewhere in the world to contribute remotely to surgical
procedures by observing and advising the on-site surgeon when required.
Radboudumc has collaborated with Philips in order to test Google Glass in
different clinical settings. Extensive tests have been carried out in diverse settings
ranging from the surgical ward to in trauma situations outside the hospital. The
technology has also been tested by disabled people using public transport. It is
expected that these tests will benefit the patients involved in a variety of different
ways while enabling Philips to explore the potential applications of a new
technology.
6.4.2
Contract Research Organisations
Two of the largest companies located on the Healthy Ageing Campus in
Groningen are QPS and PRA, both large, international contract research
organisations (CRO).
QPS is a full-service CRO with extensive experience of conducting and staffing
international Phase I to Phase IV clinical trials across a broad range of therapeutic
areas for a wide variety of clients. The company has a dedicated 34-bed clinical
pharmacology unit located at UMC Groningen, state-of-the-art large and small
molecule bioanalytical laboratories, and all the clinical (operations) support staff
and capabilities necessary for the successful planning, execution, and analysis of
Phase I – IV clinical trials, ranging from small studies to complex, multinational
projects.
PRA undertakes similar work to QPS, investigating the effects and possible side
effects of drugs. This is done with the help of volunteers including both healthy
people and patients.
It is estimated that around 650 people are employed by QPS and PRA in
Groningen and none of these jobs have been considered elsewhere in this
report. QPS and PRA would not be based in Groningen if UMC Groningen
did not exist so it is reasonable to attribute these jobs to the UMCs.
6.4.3
Danone
Danone is a global food company, headquartered in France that employs
approximately 100.000 employees and has a turnover of around €21 billion. he
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company specialises in four areas: fresh dairy products, baby nutrition, waters
and medical nutrition.
Prior to 2013 Danone operated major research centres in the Netherlands
(Wageningen, Zoetermeer and Cuijk), France (Palaiseau), Germany
(Friedrichsdorf) and the UK (Liverpool). In 2013, the company combined its
Dutch, German and UK operations in one state-of-the-art innovation centre on the
Utrecht Science Park.
The new Danone Research Centre for Specialised Nutrition is a life sciences
innovation centre for the development of new product concepts for early life
nutrition and medical nutrition. The Centre brings together almost 450 employees
and represents a new strategic alliance with between Danone and Utrecht Life
Sciences. The goal of this alliance is to intensify collaboration in the areas of
research, education and entrepreneurship.
Danone considered two options for this Centre, the Netherlands and France and
the Netherlands was a more attractive option due to its extensive network in food
and nutrition. Therefore, although the new facilities are located in Utrecht and
UMC Utrecht played an important role in attracting the investment, it would be
unreasonable to attribute the entire impact of the investment to the UMC Utrecht.
This is because Danone’s decision to locate in Utrecht is also believed to have
been driven by the fact that from this central location the Netherlands the
Company will also be able to easily interact with life science faculties and
academic hospitals elsewhere in the Netherlands. For example, Danone is
actively collaborating with MUMC+. For this reason some of the impact
generated by the company can be attributed to UMCs other than UMC Utrecht.
The impact of the 450 jobs supported by Danone in Utrecht has not been
considered elsewhere in this report but is entirely attributable to the UMCs.
This impact is therefore include as part of the catalytic impact considered in
this chapter.
6.4.4
LifeLines Project
A key initiative for UMC Groningen is the LifeLines project, a cohort study that will
follow the lives of 165.000 individuals over 30 years, making it one of the largest
studies of its kind anywhere in the world.
The LifeLines project is a €100 million enterprise that directly employs 150 people.
This investment is entirely attributable to UMCG and has not been considered
elsewhere in this report.
The lifelines project generates vast amounts of data, which requires expertise in
the management of “big data”. By developing this expertise RUG has been able
to effectively bridge the gap between medical research and ICT, helping it to
develop a distinctive strength in an increasingly important area. It is believed that
this expertise was an important influence on IBM’s decision to open a new
research centre in Groningen in 2013, which now employs between 350 and 400
people. For the purposes of this analysis it was assumed that 25% of this
employment can be attributed to UMCG.
Using these assumptions it was estimated that the LifeLines project directly
(and indirectly) supports 244 jobs in the Netherlands that are attributable to
the UMCs and have not been considered elsewhere in this report.
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6.4.5
Other Investments
Macrogen is a genetic medicine company founded in 2004 in South Korea. In
2008 the company opened its first European branch in Amsterdam and began
providing sequencing services for local customers. AMC was instrumental in
attracting the company to the Netherlands by offering an attractive package of
facilities and office space. The 10 jobs supported by the company are therefore
entirely attributable to the UMCs and have not been considered elsewhere in this
report.
Another company that was attracted to Amsterdam by the space and facilities
offered by AMC is Crystallics, a contract research organisation founded in 2000.
Crystallics employs 20 people in Amsterdam. All of these jobs are attributable to
the UMCs and none have been counted elsewhere in this report.
Lead pharma is a small pharmaceutical company that focuses on the first phase
of drug development. The company employs 15 people in the Netherlands. The
company’s close links with Radboud UMC mean that this employment can be
attributed to the UMCs. As this employment has not been counted elsewhere in
this report it has been included as part of the catalytic impact of the UMCs.
6.5
Taken together these three investments support 45 jobs in the
Netherlands that are attributable to the UMCs and have not
been considered elsewhere in this report.Clinical Trials
According to a study published in 2013 the Netherlands is the second most
desirable location in Europe17 in which to run a clinical trial. The Netherlands
scores particularly highly on the accessibility and transparency of information
required to run clinical trials. This is partly due to the close relationship and trust
that exists between patients and doctors, which results in high quality information.
In addition the Dutch system is characterized by a high fraction of doctors that are
trained in research and achieve the PhD status. The close working relationship
between the UMCs also means that companies can easily access a large
population.
The UMC model, which combines the three roles of teaching, research and
patient care, also provides an attractive environment for companies engaged in
clinical trials. For example, in this model doctors may visit patients with students
and take research samples while they are there. This integrated approach leads
to better delivery of all three activities. It also generates economic impact by
helping to attract investment from contract research organisations that carry out
clinical trials in the Netherlands.
In 2012 it was estimated that the world market for pharmaceutical contract
research was worth around $25 billion, equivalent to approximately €18 billion.
Data published by ClinicalTrials.gov, an international registry and results database
of publicly and privately supported clinical trials around the world, shows that at
17
Marta Gehring, Rod S Taylor, Marie Mellody, Brigitte Casteels, Angela Piazzi, Gianfranco
Gensini, Giuseppe Ambrosio, (15 November 2013), BMJ Open, Factors influencing clinical
trial site selection in Europe: the Survey of Attitudes towards Trial sites in Europe (the SATEU Study)
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the time of writing just over 3%18 of the open and active clinical studies listed in
the database were being undertaken in the Netherlands. That suggests that the
value of the clinical trials market in the Netherlands is likely to be between €560
and €600 million.
A review of the ClinicalTrials.gov database suggests that at the time of writing the
eight NFU UMCs were leading around a third of all open and active trials being
undertaken in the Netherlands. This suggests the eight NFU UMCs account for
around €200 million of the total turnover of the Dutch CRO industry.
It is important to note that this figure relates only to the value of clinical trials that
are being led by members of the NFU UMC network. In addition to these trials
the UMCs are also involved as collaborators in many more trials. Taking these
trials into account suggests that the UMCs are involved with almost half (47%) of
all open or active clinical trials in the Netherlands – activity that has a market value
closer to €300 million.
As it is not possible to assess how much of the impact of trials led by other
institutions should be attributed to the UMCs, this section considers only the
impact of trials that are actually led by the UMCs. For this reason it is likely that
the full value of this impact has been somewhat underestimated.
The direct employment supported by clinical trials led by the UMCs was estimated
by dividing total turnover by an estimate of the average turnover/employee in the
Dutch biomedical sector. This number was then adjusted to account for the fact
that some of these jobs will be in the contract research organisations discussed in
section 6.4.2. After accounting for this it was estimated that clinical trials led
by the UMCs directly supported 515 jobs in the Netherlands in 2012/13.
6.6
Summary Catalytic Impacts
This chapter has highlighted specific examples of how UMCs support the health
and life sciences sector. Taken together it is estimated that the various sources of
catalytic impact considered in this chapter support 36.425 jobs in the Netherlands,
of which 9.628 can be attributed to the UMCs and have not been counted
elsewhere in this report.
18
Open trials refers to studies that were actively recruiting participants at the time of writing
and active trials refers to studies that were underway but no longer recruiting.
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Table 6-2 – Catalytic employment supported by the UMCs
Total
employment
supported
Employment
attributable
to UMCs
and not
counted
elsewhere
1.550
425
QPS
650
650
Danone
450
450
LifeLines/IBM
525
244
45
45
515
515
3.220
1.814
Science Park/Geographic Cluster
Philips
Other investments
Clinical trials
Total
Source: BiGGAR Economics Analysis
The catalytic economic impact of this employment was estimated by converting
the direct employment supported into turnover by applying industry ratios from
national economic data. The direct GVA impact was then estimated by applying
relevant turnover/GVA ratios.
The indirect impact was estimated by applying sector-specific multipliers to the
direct impact. Using this approach it was estimated that the catalytic effect of the
UMC network was almost €1,3 billion GVA and 19.578 jobs. This is summarised
in Table 6.3.
Table 6.3: Catalytic Impact Summary
Catalytic Impacts
GVA (€m)
Employees
1.273,5
19.578
Source: BiGGAR Economics Analysis
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7
TOURISM IMPACT
UMCs stimulate tourism in their regional economies. This impact arises from:
7.1

visits from friends and family to staff and students;

visits from friends and family to hospital patients;

visitors to conferences held at the UMCs; and

attendance at open days for the medical school.
Visits to Staff and Students
The presence of staff and students creates economic impact through visits from
their friends and family. These visitors spend money in the economy and this
spending increases turnover in local businesses, which in turn supports local
employment.
The impact of visits to staff and students has been calculated by assessing the
number of visits from friends and family per head of the population in each region
of the Netherlands, estimated by Dutch tourism statistics. We considered visits
from domestic residents and overseas residents because the spending
assumptions differ for each group. This was applied to the total number of staff
and students employed at the UMCs with an estimate of trip expenditure per visit.
The economic impact was found by converting trip spend (turnover) to GVA and
employees and applying multipliers to estimate the indirect and induced effect of
this level of spending. The assumptions used and the impact calculated are
shown in Tables 7.1 and 7.2.
Table 7.1: Visits to Staff and Students Assumptions
Assumptions
Value
Total number staff & students (headcount)
100.300
No. visits per staff/student - domestic
0,14
No. visits per staff/student - internationally
0,02
Trip spend per domestic visitor (€)
155
Trip spend per overseas visitor (€)
361
Source: Previous BiGGAR Economics research
This results in an estimated impact from visits to staff and students of €3,8 million
and 60 fte jobs in the Netherlands.
Table 7.2: Visits to Staff and Students Impact - Summary
GVA (€m)
Visits to Staff and Students
Employees (fte)
3,8
60
Source: BiGGAR Economics Analysis
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7.2
Visits to Hospital Patients
Economic impact is created by visits to hospital patients from their friends and
family, particularly if the patient is from outside the area.
The first step in estimating this impact was to multiply overnight clinical
admissions by the proportion of patients from outside the region to estimate how
many patients come from outside the region. We applied UMC data on the
average length of patient admission. It was assumed patients have an average of
one visitor who will come and stay in the area for the length of time the patient is
in hospital. The total number of days spent in the area by friends and family was
then multiplied by average expenditure per day.
As in the previous section of this chapter, economic impact is estimated by
converting spend into GVA and employment and applying multipliers. The
assumptions used are shown in Table 7.3 and the impacts calculated are shown
in Table 7.4.
Table 7.3: Visits to Hospital Patients Assumptions
Assumptions
Value
Clinical admissions/inpatients
220.303
Percentage of overnight patients from outside region
42%
Length of stay per patient (days)
6,65
Spend per day (€)
40
Source: all UMCs and BiGGAR Economics Analysis
This results in an estimated impact from visits to hospital patients of €2,5 million
and 39 fte jobs in the Netherlands.
Table 7.4: Impact from visits to hospital patients
GVA (€m)
Visits to Patients
Employees (fte)
2,5
39
Source: BiGGAR Economics Analysis
7.3
Conference Impact
Each UMC organises conferences that generate economic impact by attracting
people to the area who would not otherwise have visited.
The UMCs organised 787 conferences and events in 2012, which involved
55.130 delegates. Just over half of these were from outside the Netherlands. For
each UMC, we estimated the proportion of visitors from within the local area and
their expenditure was excluded from the analysis because it was not additional to
the study area. Applying expenditure data on business trips from the Dutch
tourism statistics, we can estimate the additional total turnover generated by
people attending conferences organised by the UMCs. This is converted to
additional GVA and employment by using ratios and multipliers appropriate to the
sector.
This results in an impact from conferences of an estimated €7,7 million and 123
fte jobs in the Netherlands. The assumptions used are shown in Table 7.5 and the
impacts are presented in Table 7.6.
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Table 7.5: Conference Impact - Assumptions
Assumption
Value
Number of conferences
787
No. of delegates to the UMCs organised conferences and events
55.051
Estimated % of International attendees
51%
Estimated % of Dutch attendees from outside study areas
46%
Trip spend per domestic visitor on business (€)
319
Trip spend per overseas visitor on business (€)
509
Source: all UMCs
Table 7.6: Conference - Summary
GVA (€m)
Conferences
Employees (fte)
7,7
123
Source: BiGGAR Economics Analysis
The conferences hosted by the UMCs have also made a wider contribution to
business tourism in the Netherlands by stimulating demand for conference
facilities and attracting international events. It is for example unlikely to be a
coincidence that the Maastricht Exhibition and Congress Centre (MECC) is
located on the Maastricht Health Campus just a five minute walk from Maastricht
UMC+. Although it is impossible to quantify the impact of this, it is likely that the
UMCs have contributed to making the Netherlands the 9th most popular
destination in the world for international association meetings19.
7.4
Open Days
Prospective students visit universities in advance of making decisions about
where they wish to study. One UMC provided us with statistics about how many
people visited it’s open days in 2012 – this was 165% of the total student
numbers. We have assumed the same proportion of students visit each of the
UMCs’ open days and 50% bring a parent/guardian or other person. 10% of
open day visitors are assumed to be international. The impact of visitors to open
days is only additional if they are from outwith the study area, in this case the
Netherlands. Therefore, only the impact of international visitors is measured at
the national level. The assumptions used to estimate the economic impact of the
open days is shown in the table below.
Table 7.7: Open Days - Assumptions
Value
International visitors to open days
Visitor spend, international
Proportion who bring a parent/guardian/other
7.029
€50
50%
Source: BiGGAR Economics Analysis
Applying these assumptions provides an estimate of the impact of UMC open
days of €0,4million GVA and 7 fte jobs in the Netherlands.
19
International Congress and Convention Association (2012), Country and city rankings 2012
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Table 7.8: Open Days - Summary
GVA (€m)
Impact of Open Days
Employees (fte)
0,4
7
Source: BiGGAR Economics Analysis
7.5
Summary of Tourism Impacts
The contribution of the UMCs to the economy through attracting visitors results is
an estimated €14,4 million additional GVA and 229 fte jobs per year in the
Netherlands.
Table 7.9: Tourism Impact - Summary
GVA (€m)
Employees (fte)
Netherlands
Visits to staff and students
3,8
60
Visits to patients
2,5
39
Conferences
7,7
123
Open Days
0,4
7
14,4
229
Total
Source: BiGGAR Economics Analysis (numbers may not sum due to rounding)
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8
IMPACTS OF TEACHING AND LEARNING
The learning that the students undertake during their time at their host UMC
enhances their future earnings and hence their impact on the economy. The
impact of teaching and learning is a measure of the additional lifetime earnings
that are estimated to occur as a direct result of an individual possessing a
university qualification.
The impacts of teaching and learning are a different kind of impact than the others
described in previous chapters because the impacts will occur over the working
lifetime of graduates rather than in the year of their graduation. These impacts
would not all have been realised in 2012/13, which is the year our analysis covers.
However, in 2012 graduates from previous years will be creating these impacts
and this has not been captured elsewhere in the study. Therefore the future
impacts from the 2012 cohort of graduates have been quantified and added in to
ensure that the full impact of teaching and learning is reflected in thieanalysis.
This aspect has been studied most recently in the UK by London Economics on
behalf of the government’s Department for Business, Innovation and Skills and
their findings are published in the report “The Returns to Higher Education
Qualifications, 2011”. This work estimates the impact of teaching and learning for
graduates in all subjects and suggests that for medicine and dentistry the lifetime
earnings premium is £301.432 (€364.733) and for graduates in subjects allied to
medicine it is £145,633 (€176.216). For PhD graduates there is a further earnings
premium of £70,000 (€84.700) and we have assumed this applies to Masters
graduates also.
Data contained in the OECD Education at a Glance publication20 implies that, the
earnings premium for a Netherlands degree holder is 94% of that of the UK,
suggesting that the graduate premium effect is similar in the two countries. The
UK research has been used but the earnings premium figures have been
adjusted to take account of the small difference highlighted in the OECD
publication.
The adjusted impact of teaching and learning has been applied to graduates of
the UMCs in 2012 who graduated with a masters degree and to graduates with a
masters in biomedical science and as a medical doctor. For each UMC study, we
have adjusted these for each study area to take account of data on where people
live after they graduate.
20
Education at a Glance 2013, OECD Indicators, Table A6.1
http://www.oecd.org/edu/eag2013%20(eng)--FINAL%2020%20June%202013.pdf
Economic Impact of UMCs in the Netherlands
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Table 8.1: Impact of Teaching and Learning - Assumptions
Assumption
Value
Earnings premium for holder of medical or dentistry degree (€)
364.733
Earnings premium for holder of a degree in subjects allied to medicine (€)
176.216
Earnings premium of holder of PhD degree (€)
84.700
No. of UMC graduates in medicine & dentistry
6.528
No. of UMC graduates in subjects allied to medicine
565
Total number of first degree graduates
4.018
Total number of masters degree graduates
2.080
Total number of PhD graduates
995
% graduates living in Netherlands
40%
% medical graduates leaving the UMCs
50%
Source: all UMCs and BiGGAR Economics Assumptions
This results in an estimate of additional premium in human capital of €726,9
million in the Netherlands as a result of training people in medicine and allied
subjects at the UMCs in 2012.
The increased earning of the graduates of the UMCs would have an employment
impact when these earning were spent, in a similar way to the Staff Spending
described in 3.3. The increase in earnings of graduates would support almost
4,000 job years of employment from the 2012 cohort of graduates.
This impact occurs over the working life of graduates and is not an annual impact
that can be compared directly to the other impacts set out in this report. However,
the UMCs produce a cohort of graduates each year, each of which can be
expected to have a cumulative impact on the economy. Therefore, the additional
GVA calculated has been added to the total impact of the UMCs and then
converted into an employment impact to arrive at our final estimate of the value of
teaching and learning on the economy.
Table 8.2: Impact of Teaching and Learning
GVA (€m)
Graduate premium
Employees (fte)
726,9
3,893
Source: BiGGAR Economics
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9
SUMMARY IMPACT AND UMC COMPARISONS
9.1
Total Impact
By bringing together the various sources of impact discussed in this report it can
be estimated that the UMCs:

contribute €20,4 billion GVA (€20.373,1 million); and

support 215.413 jobs in the Netherlands
The employment impact includes a direct impact of 56.920 fte jobs, which means
that for each direct job supported in the UMCs supports a total of 3.78 jobs in the
wider Netherlands economy. The GVA impacts include €4.7 billion direct GVA
and therefore the GVA multiplier for the UMCs is 4.30.
A breakdown of this impact is provided in Table 9.1. A comparison of the relative
impacts of the different UMCs follows.
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Table 9.1 – Summary
Netherlands
GVA (€m)
Jobs (ftes)
Core Impact
12.844,6
150.877
Direct Impact
4.733,5
56.920
Supplier Impact
3.257,1
35.903
Staff Spending Impact
4.192,2
49.959
Capital Spend Impact
661,8
8.095
Student Impact
805,3
10.399
Student Spending Impact
408.3
4.239
Student Working Impact
397,0
6.160
4,708,5
30.436
Technology Licensing Impact
309,4
3.465
Spin-outs and Start-Ups Impact
369,4
3.422
1.825,4
22.831
55,6
719
1.834,7
-
314,1
-
14,4
229
Visits to Staff and Students
3,8
60
Visits to Patients
2,5
39
Conferences
7,7
123
Open Days
0,4
7
Catalytic Impacts
1.273,5
19.578
Catalytic impacts
1.273,5
19.578
19.646,2
211.520
726,9
3.893
20.373,1
215,413
Valorisation Impact
Collaborative Research
Workforce Training
Social Returns to Medical Research
Social Impacts of Staff Time
Tourism Impact
Sub-total
Impact of Teaching & Learning
Total
Source: BiGGAR Economics Analysis, figures may not total due to rounding
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The table below shows how the impact of the eight UMCs is distributed. Each
UMC accounts for between 9,4% and 18,4% of the overall impact of the group.
Table 9.2 – Total Impact by UMC
UMC
Total GVA Impact
€m
%
UMC Utrecht
2.974,7
14,6
LUMC
2.356,0
11,6
UMC Groningen
2.973,0
14,6
Erasmus MC
3.750,0
18,4
Radboudumc
2.217,7
10,9
Maastricht UMC+
1.919,5
9,4
VUmc
2.404,3
10,8
AMC
1.977,8
9,7
Total
20.373,1
100,0
Source: BiGGAR Economics analysis
The figure below shows a comparison of the six categories of impacts identified in
this study, by UMC. This shows that:

around two thirds of the impacts in each UMC are core impacts;

around 5% of the impacts for the UMCs are generated by student impacts;

economic impact from valorisation accounts for around a fifth of the impact of
the UMCs as a whole but varies significantly (11%-35%) between institutions;

tourism impacts are small in the overall picture, accounting for less than 1% of
the total impact of the UMCs;

catalytic impacts account for almost 7% of the total impact of the UMC’s but
this varies considerably between institutions - from less than 1% for one
institution to almost 30% in another;

the impact of teaching and learning accounts for almost 4% of impacts in all
UMCs.
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Figure 9.1 – Comparison – Proportion of NFU impacts by UMC
Source: BiGGAR Economics
9.2
Impact in Context
The NFU UMCs are a unique group of organisations that undertake a complex
and extensive range of activities. This makes it very difficult to benchmark their
performance against other organisations either elsewhere in the Netherlands or
elsewhere in the world.
Differences in the methodology used for different economic impact studies can
also make it difficult to directly compare the economic impact presented in this
report with studies that have been undertaken for other institutions elsewhere in
the world. Even when the methodology is the same, it is often not possible to
make direct comparisons. For example the economic impacts of the UMCs
cannot be directly compared to that of medical schools in other countries, which
also provide education and training and undertake research, but do not directly
provide healthcare.
Data constraints can also make it difficult to find appropriate comparators. For
example, data is not available on the economic impact of the non-UMC hospitals
in the Netherlands. It could, however, be noted that non UMC hospitals would not
be expected to have the same economic impacts as the UMCs because the
UMCs’ impacts are associated with activities not undertaken in other hospitals
such as education and training, research and valorisation.
It is however possible to make a number of comparisons that help to benchmark
the economic impact of UMCs. While in isolation none of these comparators is
ideal, when taken as a group, they provide evidence of the impressive scale of the
economic impacts of the UMCs in the Netherlands.
As a starting point for this it is worth noting that, according to Eurostat in 2012, the
GDP of the Netherlands economy was €599,3 billion. The economic impact of
the UMCs of €20,4 billion is therefore equivalent to 3,4% of the Dutch
economy.
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The UMCs’ economic impact also benchmarks well against the entire Scottish
higher education system. In 2012, the economic impact of Scotland’s 19
universities and higher education institutions was €8 billion21.
It is also helpful to consider the numbers presented above within the context of
other knowledge driven hubs of economic activity around the world. Two very
well known hubs of knowledge-driven activity are Cambridge and Oxford in the
UK.
9.2.1
Oxford and Cambridge
Over the past 50 years the area around Cambridge has developed a global profile
in terms of its technology based business community. It is estimated that there
are around 900 high tech businesses in the Cambridge area, employing around
37.000 people22. The University of Cambridge and various associated research
institutes has been the main driver of this cluster of activity. Consistently ranked
amongst the top 5 universities in the world, the University has acted as a driver of
innovation and growth and an important magnet for both indigenous and overseas
investment.
In 2012/13 the University of Cambridge generated income approximately €1,8m
(£1,4 million) and employed 10.166 staff. In comparison, the NFU UMC network
generated €7,1 billion turnover and employed 56.920 full time equivalent staff.
Another important hub of knowledge activity in the UK is the area around Oxford.
It is estimated that this area is home to around 1.500 high tech firms, employing
around 43.000 people23. With a strong focus on bioscience, medical technology
and pharmaceuticals, a key driver for this knowledge cluster has been the
University of Oxford. Ranked 7th in the world (behind only Cambridge in Europe),
the University of Oxford generated a turnover of approximately €1,3 billion (£1.1
billion) in 2012/13 and employed 10.767 staff.
These figures demonstrate that as a driver of knowledge based activity in the
Netherlands, the combined resources of the NFU UMCs are around double those
of the Universities of Oxford and Cambridge combined. This is summarised in
Table 9.3.
Table 9-3: Comparative resources of NFU UMCS and Oxbridge Universities
9.2.2
Universities of
Oxford and
Cambridge
NFU UMCs
Turnover
€3,1bn
€7,1bn
Staff (ftes)
20.933
56.920
Global Life Sciences Hubs
Another way of understanding the scale of the contribution made by the NFU
UMCs is to compare the resources of the UMCs to those of the institutions that
drive other important life science hubs around the world.
21
See Universities Scotland website for details of the economic impact of Scotland’s 19
higher education institutions
22
SQW (March 2011), Cambridge Cluster at 50, final report to EEDA and partners
23
SQW (October 2013), The Oxfordshire innovation engine, realising the growth potential
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One of the most important and best-known global life sciences location is the
Research Triangle Park in North Carolina. Ranked 4th in the US in the 2012
global life sciences report, the success of the Research Triangle Park can be
largely attributed to the three academic partners located within 15 minutes of its
headquarters. These institutions act as anchors for the Park and help to stimulate
and attract much of the investment made there. They include:

Duke University, which has around 34.870 academic and hospital staff and
operating revenues of approximately €3,5 ($4,8 billion);

North Carolina State University, which has around 8.900 staff and a budget
of approximately €1,0 billion ($1.4 billion); and

University of North Carolina at Chapel Hill, which employs around 11.900
staff and has a budget of approximately €1,8 billion ($2,5 billion).
Taken together the combined academic resources of these three institutions
amount to around 55.660 staff and a combined budget of around €6,3 billion
($8,7), slightly less than the combined resources of the eight NFU UMCs. This is
illustrated in Table 9-4.
Table 9-4: Comparative resources of NFU UMCS and key global life science clusters
9.2.3
Research Triangle
Park, North Carolina
NFU UMCs
Turnover
€6,3bn
€7,1bn
Staff (ftes)
55.660
56.920
Dutch Top Sectors
A third way of understanding the scale of the impact generated by the NFU UMCs
is to compare it to the scale of activity supported by important sectors in the Dutch
economy. The Dutch Government has identified nine “top sectors” that have a
strong international position and high potential for growth. The turnover
generated and employment supported by these sectors is highlighted in Table
9-5.
This shows that the UMCs support more employment than all but three of the top
sectors identified by the Dutch Government. It also shows that the GVA
generated by the UMCs is comparable with the total value of production in the
Dutch horticulture and creative industries sector and greater than that supported
by the entire life science sector.
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Table 9-5 - Turnover and employment in Dutch “top sectors”
Production (€bn)
Employment (000s)
183,7
829
Horticulture
21.1
118
Hightech
94,9
444
Energy
55,0
47
125,9
813
Creative industries
22,6
148
Life sciences
12,6
39
Chemicals
90,4
80
Water
25,4
87
GVA (€bn)
Employment
20,4
215
Agrifood
Logistics
NFU UMCs
Source: Ministry of Economic Affairs (March 2011), the Dutch top sectors approach
9.2.4
Dutch Companies
A final way of understanding the scale of the impact generated by the NFU UMCs
is to compare it to some large, well-known Dutch companies. Three of the largest
Dutch corporations include the Ing Group, Royal Philips and Heineken Holdings.
Publicly available information suggests that in 2013 the total turnover of these
companies ranges from €19,2 billion to €26,3 billion and the total number of
employees supported ranged from around 76.000 for the ING Group to 114.000
in Royal Philips. The NFU UMCs generated total GVA of €20,4 billion and
supported an estimated 215.400 jobs in the Netherlands alone.
Table 9-6: Comparative resources of NFU UMCS and Oxbridge Universities
Turnover (€bn)
Employees (‘000 ftes
world wide)
Ing Group
26,3
76
Royal Philips
24,8
114
Heineken Holdings
19,2
81
GVA (€bn)
Employment
20,4
215
NFU UMCs
Although turnover and GVA are not directly comparable, these examples do help
to illustrate the scale of the impact generated by the NFU UMCs for the Dutch
economy.
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10
APPENDIX A – ABBREVIATIONS AND TERMS
Assumptions are the data upon which impact calculations are based.
FTE (or fte) – Full Time Equivalent a unit to measure employed people or
students in a way that makes them comparable although they may work or study
a different number of hours per week. The unit is obtained by comparing an
employee's or student's average number of hours worked to the average number
of hours of a full-time worker or student. A full-time person is therefore counted as
one FTE, while a part-time worker / student gets a score in proportion to the hours
he or she works or studies. For example, a part-time worker employed for 20
hours a week where full-time work consists of 40 hours, is counted as 0,5 FTE.
GDP – Gross Domestic Product refers to the market value of all final goods and
services produced within a country in a given period.
GVA – Gross Value Added is also a measure of the value of goods and services
produced in an area, industry or sector. GVA is linked to Gross Domestic Product
(GDP) because both are measures of output. The relationship is defined as:
GVA + taxes on products - subsidies on products = GDP
As the total aggregates of taxes on products and subsidies on products are only
available at whole economy level, GVA is used for measuring entities smaller than
a whole economy (such as universities). In simple terms at the level of an
organisation, it is represented by turnover less the non-labour costs of production.
GVA/turnover ratio is a measure of the relationship between the total turnover of
a particular sector and the GVA it generates. It is calculated by dividing total GVA
by total turnover and can be used to estimate how much GVA will be created as a
result of an increase in output (turnover or expenditure).
Spin-outs are companies that are created to commercialise a university's
intellectual property; usually involving a licensing agreement and/or staff transfer.
Start-ups are businesses that are set up by university staff and/or former
students. Although such companies will draw on the experience acquired by the
founders during their time at the university, they have no formal intellectual
property relationship with the university.
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11
APPENDIX B – ECONOMIC METHOD STATEMENT
The methodology that was used to estimate the economic impact of the UMCs
was a constant throughout the report writing process.
Outputs
The economic outputs of this report have been quantified in terms of Gross Value
Added (GVA) and full time equivalent (fte) jobs.
GVA is the measure of the value that an organisation, company or industry adds
to the economy through their operations. The report used the production
approach to measuring this impact, where the GVA is equal to the value of
production less the value of the inputs used. Typically this is calculated by
subtracting the non-labour costs of the organisation from the organisation’s total
revenue.
Economic ratios
The relationship between the level of GVA and the employment support by a
given amount of turnover varies between industries. The turnover is the
economic driver that is most commonly given in the datasets from the UMC and
this measure needs to converted into GVA and employments outputs. The total
turnover, GVA and employment data are given by Statistics Netherlands for the
whole economy broken down by broad industry categories. This data enabled the
turnover/GVA ratio and the turnover/employee ratio to be calculated for each of
the 21 industry groups.
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Table B.1: Industry Ratios
Turnover
/Employee
GVA/
Employee
Turnover/
GVA
A – U All economic activities
€ 177.370
€ 79.887
2,22
A Agriculture, forestry and fishing
€ 162.029
€ 52.138
3,11
€ 3.730.857
€ 2.950.286
1,26
€ 411.134
€ 90.024
4,57
€ 1.528.960
€ 445.240
3,43
E Water supply and waste management
€ 361.500
€ 125.083
2,89
F Construction
€ 167.293
€ 60.343
2,77
G Wholesale and retail trade
€ 112.561
€ 62.223
1,81
H Transportation and storage
€ 164.908
€ 70.825
2,33
€ 89.217
€ 45.372
1,97
J Information and communication
€ 215.208
€ 104.000
2,07
K Financial institutions
€ 360.421
€ 203.443
1,77
€ 1.023.667
€ 525.850
1,95
M Other specialised business services
€ 128.130
€ 62.323
2,06
N Renting and other business support
€ 90.413
€ 54.395
1,66
€ 153.076
€ 87.098
1,76
P Education
€ 91.849
€ 70.479
1,30
Q Health and social work activities
€ 79.079
€ 58.223
1,36
R Culture, sports and recreation
€ 97.610
€ 41.847
2,33
S Other service activities
€ 73.833
€ 44.535
1,66
T Activities of Household
€ 32.500
€ 32.500
1,00
B Mining and quarrying
C Manufacturing
D Electricity and gas supply
I Accommodation and food serving
L Renting, buying, selling real estate
O Public administration and services
Source: Statistics Netherlands, GDP, production and expenditure; output and income
by activity 2012 (2013)
The indirect impacts consider the knock on effects in the supply chains from the
initial GVA and employment. These impacts vary based on the industries in
which the initial impacts occur. The indirect impacts are calculated by applying an
appropriate GVA and employment multiplier. These multipliers were calculated
based on the Input – Output Tables of the Netherlands. The Type 1 multipliers
include the knock on impacts in the supply chain, while the Type 2 multipliers
includes the knock on effects of the supply chain and the spending of staff directly
employed. The Type 1 multipliers are used in the report to calculate the indirect
impacts of areas where the staff spending has been captured elsewhere.
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Table B.2: Industry employment multipliers (Type 1 & Type 2)
Type 2
GVA
Type 1
Employment
GVA
Employment
A – U All economic activities
2,89
2,75
2,22
2,18
A Agriculture, forestry and fishing
3,20
2,25
2,56
1,94
B Mining and quarrying
1,42
8,08
1,32
6,13
C Manufacturing
4,93
4,42
3,84
3,49
D Electricity and gas supply
4,93
4,42
3,84
3,49
E Water supply and waste
management
4,93
4,42
3,84
3,49
F Construction
3,78
2,79
2,78
2,25
G Wholesale and retail trade
2,39
1,89
1,76
1,54
H Transportation and storage
2,92
2,73
2,18
2,15
I Accommodation and food
serving
2,59
1,79
1,98
1,51
J Information and communication
2,59
1,79
1,98
1,51
K Financial institutions
2,77
3,04
1,97
2,19
L Renting, buying, selling real
estate
2,15
2,06
1,62
1,66
M Other specialised business
services
2,15
2,06
1,62
1,66
N Renting and other business
support
2,15
2,06
1,62
1,66
O Public administration and
services
2,42
2,17
1,76
1,66
P Education
1,99
1,61
1,27
1,20
Q Health and social work activities
1,98
1,49
1,34
1,20
R Culture, sports and recreation
2,81
1,96
2,34
1,65
S Other service activities
2,81
1,96
2,34
1,65
T Activities of Household
2,81
1,96
2,34
1,65
Source: BiGGAR Economics based on Statistics Netherlands, Input – Output Tables
2008
Multipliers and provincial spending
Provincial Spending
The economic impact of each UMC was calculated at the regional as well as the
national level and this data is provided in each of the individual UMC reports. In
order to do this it was necessary to estimate what proportion of the national
spending would occur at the regional level. Each UMC study was undertaken in
conjunction with the others and therefore the assumptions were made to be
consistent.
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It was assumed that 95% of spending, either staff spending their salaries or the
spending in the supply chain, took place within the Netherlands. Both individuals
and organisations have an inclination to spend within the region/province where
they reside, if they can. The main determinant of the proportion of spend that is
local is the size of the regional/provincial economy. It was assumed that the
proportion of Dutch spending in each of the provinces was equal to the province’s
population share, however people and organisations were 3,5 times more likely to
spend money in the province than they were in the national economy.
Within the individual UMC report, if the institution supplied more detailed
information about their geographical spend, this information was used instead.
Provincial multipliers
The economic multipliers, which are used to calculate the indirect impacts, were
also adjusted for the provincial multipliers. The multipliers were based on the
input-output tables of the Netherlands and consider the knock on impacts of the
supply chain and staff spending. Therefore the proportion of the indirect impact
that was captured in each province was assumed to be the same as the
proportion of provincial spending.
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