ASU maintains its role as an ‘economic engine’ in Tempe
New year welcomes back thousands of students to the city, campus
As students head back to class at ASU, the university remains a major contributor to the local economy.
Courtesy Arizona State University
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Economic partners
It’s certainly symbiotic in the sense that many Tempe businesses are aligned with serving the interests of the university and its constituents, its faculty, its staff and students”
Arizona State University continues to be a major driver of Tempe’s economy according to local experts, with its impact going beyond just the tens of thousands of students spending and working in the city.
The university marked several enrollment records this year, welcoming in about 40,800 students when classes started on Aug. 22. Enrollment for new in-state students was up by 9% this year, with record increases seen at both the graduate and undergraduate levels, according to a university release.
This growth in population reflects not only economic success for ASU, but Tempe and the greater Valley also benefit from the university bringing in more students, as new businesses continue to open and thrive within the city.
Economist Dennis Hoffman, director of the L. William Seidman Research Institute at ASU’s W.P. Carey School of Business, said that having lived in Tempe since 1979, he’s seen how the university has been transformed.
ASU shifted away from a commuter campus experience, encouraging and requiring more students to live on campus, which in turn created demand for businesses nearby and centralized student spending in and around the school.
Hoffman explained ASU surveys students annually in respect to their spending, conducting economic impact assessments of all that students spend across the state — with the majority of that being in Tempe.
Results show ASU students most recently contributed about $1.7 billion in gross state product just from expenditures made on and around campus, sustaining roughly 13,000 jobs as a result of this spending.
“Money pours in to build student housing complexes, to build retail and restaurant and bar establishments to serve the needs of those students… so it’s a real engine for Tempe,” Hoffman said.
One thing he noted is ASU is a research university, and it’s been shown that research institutions help to drive dollars in the region by attracting a large number of students, both in Tempe and nationally.
As Hoffman frames it, ASU accounts for a substantial amount of spending in Tempe, driving economic activity not only for the school but for the city at large.
A symbiotic relationship
Hoffman said job creation is another aspect of how ASU is an important part of the local economy. There are jobs on campus, jobs that students work while in school at local businesses and many alums end up working in the state after graduation.
There are roughly 300,000 ASU alumni working in Arizona today, Hoffman explained, with their aggregate earnings totaling $22 billion.
“We’ve left an imprint for sure… but many of them stay and find gainful employment to continue injecting economic impact into the state of Arizona,” he said.
Looking at examples of ASU’s influence on the economy of the Phoenix metro, Hoffman pointed to Taiwan Semiconductor Manufacturing Co.’s decision to come to the Valley, saying one of the reasons the area was chosen was because of the presence of a major research university.
Having this university nearby meant there would be a consistent source of talented engineering students to recruit, he explained, adding the university also embraces new businesses coming to the area.
ASU supports Tempe by attracting new students and creating jobs. In return, Tempe supports ASU as new businesses open to serve students and tap the talents of the school’s graduates — a relationship that continues to be mutually beneficial.
“It’s certainly symbiotic in the sense that many Tempe businesses are aligned with serving the interests of the university and its constituents, its faculty, its staff and students,” Hoffman said.
Going forward
Tempe has been known as an attractive location for new businesses because of its large student population, a benefit for ASU students, faculty and staff but also to the health of the local economy.
Tempe Chamber of Commerce President and CEO Robin Arredondo-Savage said ASU and the city’s businesses have a sort of symbiotic relationship in that the two complement each other well and make each other what they are.
As ASU’s student population continues to grow, she said it will be vital that the university and local businesses continue to develop their relationship, ensuring that they continue to be good partners and recognize the importance of each other.
“ASU is a valuable asset to the city of Tempe, and when I say that, I mean not only just ASU in general, but the staff, the students, everything that they bring to our community,” Arredondo-Savage said.
At the same time, she says Tempe businesses are the backbone to the economic landscape of the city and are strong economic drivers. So looking to the future, she hopes they continue working together so that all parties are successful.
Arredondo-Savage said in her experience, ASU has been a strong partner to local businesses, open and welcoming to different feedback and working to resolve issues with the community.
“Communication is the biggest thing, and we need to, as the Tempe chamber, ensure that we are creating that bridge so the businesses and ASU continue to work together side by side in a positive way,” she said.
Hoffman also noted the university and the city should collaborate on efforts to ensure widespread economic success.
Investments in housing and improving transportation means are among the considerations that could be of note, supporting Tempe and ASU’s growing population with housing options and reliable public transit.
“Those are continuing, ongoing needs that we need to serve… (and) to keep an eye out for how we can continue to improve,” Hoffman said.
Reporter Caroline Yu can be reached at cyu@iniusa.org. To voice your opinion on this story, connect with us at AzOpinions@iniusa.org.
Meet Caroline Caroline Yu joined Independent Newsmedia, Inc., USA, in 2020 as a summer intern covering Scottsdale. As an intern, she continued her coverage of Scottsdale, Paradise Valley and Tempe. After graduating in 2022, Caroline became a full-time reporter for Scottsdale and Paradise Valley. She is currently reporting for the Tempe market.
Community: She is a supporter of the environment and tries to get involved with related community events.
Education: Arizona State University with a BA in Journalism and Mass Communications, with a minor in French.
Random Fact: She used to be a ballet dancer for 10 years.
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“We’ve left an imprint for sure… but many of them stay and find gainful employment to continue injecting economic impact into the state of Arizona,” he said.
“ASU is a valuable asset to the city of Tempe, and when I say that, I mean not only just ASU in general, but the staff, the students, everything that they bring to our community,” Arredondo-Savage said.
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