ETEBA Economic Impact Survey

ECONOMIC IMPACT ANALYSIS: 
THE ENERGY, TECHNOLOGY AND ENVIRONMENTAL BUSINESS ASSOCIATION
March 2008

In September 2007, the Energy, Technology and Environmental Business Association (ETEBA) included 146 member businesses and 22 affiliate member associations, or a total of 168 members.  At that time an independent survey was administered by Dr. Matt Murray of the University of Tennessee to ETEBA member businesses to identify the magnitude of their economic impacts, inclusive of ripple effects arising from the spending and re-spending (i.e. multiplier) process.  While ETEBA has its headquarters in Tennessee, ETEBA businesses are also located in other states and have contracts to provide services all across the nation, thus, generating significant economic benefits for both the Tennessee and national economies.  Below is a synopsis of impact findings by Dr. Matt Murray.

Profile of ETEBA Members

The basis for estimating economy-wide benefits inclusive of multiplier effects is the business activity of ETEBA members themselves.  The payroll spending and employment of ETEBA members is substantial:

                        Tennessee                                U.S.   

    Jobs              9,636                                        328,646

    Payroll          $641.7 million                            $13.3 billion

On top of the payroll figures is business income of $19.8 million.

Generally ETEBA businesses provide a compensation package that is above the average for employment across all sectors of the economy.  For example, the average salary for ETEBA jobs in Tennessee is $66,594.  In addition:

            ▪Nearly one-half of ETEBA members expanded their operations in the last 5 years.

            ▪Health insurance is provided by 81 percent of all firms.

▪Nearly 90 percent of ETEBA members provide advanced training to workers and 60 percent provided tuition reimbursement for their employees.

            ▪Forty-one percent of ETEBA workers hold a bachelor’s degree

▪Thirty percent of ETEBA businesses are woman owned, 16 percent are minority owned, 23 percent are certified 8(a) and 9 percent are veteran owned.

Economic Impact Estimates

Economic impact (i.e. RIMSII) multipliers obtained from the U.S. Bureau of Economic Analysis were used to estimate the aggregate impacts arising as ETEBA business activity ripples across the Tennessee and national economies.  Two measures were estimated, total job impacts and total income impacts. The figures below show these aggregate impacts, which include the payroll, business income and employment of ETEBA members.

                        Tennessee                                U.S.

   Jobs               16,759                                       632,315

   Income          $1.3 billion                                 $29.1 billion

 

Methodological Summary:

Impact Assessment of the
Energy, Technology and Environmental Business Association

The tools of regional economic impact analysis were used to evaluate the economic benefits created by the Energy, Technology and Environmental Business Association (ETEBA).  The basis for the analysis was a survey administered to firms that are members of ETEBA.  The survey was developed by Matt Murray of the University of Tennessee, in cooperation with Bill Niemeyer of ETEBA.  The survey is similar to that used in the prior assessment of ETEBA impacts.  Surveys were mailed out in September, 2007; extensive follow-up efforts were made to encourage the completion and return of the surveys.  Forty-three useable surveys were returned.  The response rate for specific questions varied across respondents.  All survey information has been treated as strictly confidential and all completed surveys will be destroyed at the close of this study.   

The survey was intended to capture a range of benefits created by ETEBA businesses and bestowed on the Tennessee state economy (where ETEBA has its headquarters) and on the national economy.  While the primary focus of the impact analysis was estimation of total job and income benefits, the survey also asked an array of other questions related to job quality (e.g., availability of fringe benefits and the skill level of the workforce), capital investment, business expansion and the nature of firm ownership (e.g., minority owned firms). 

The estimates of total income and total job creation arising from ETEBA business activity incorporate the influence of the multiplier.  As ETEBA businesses employ workers and make payroll expenditures, jobs and income are directly created.  As ETEBA workers spend their income, additional jobs and income arise through the ripple effects of the multiplier.  Jobs and income also are created as ETEBA businesses acquire goods and services from vendors and subcontractors in any of a number of states.  For example, an ETEBA business may acquire engineering services from a regional firm which in turn creates employment and has payroll expenditures.  These purchases also have multiplier effects that add to income and job creation.  The survey instrument was carefully structured to isolate the benefits that accrue to Tennessee, while separate questions were asked to identify impacts on the national economy.   

RIMSII multipliers acquired from the U.S. Bureau of Economic Analysis were used to capture the ripple effects of the spending and re-spending process.  Separate multipliers were used for Tennessee and the national economy since the scope of ripple effects differs for these different areas.  The survey data were weighted to reflect the impact of the 146 business members of ETEBA.