'NASA's hidden impact': Space agency's economic report uncovers insights that could transform our future economy
NASA's activities also produce an indirect economic impact through the goods and services sourced from related industries, alongside an induced impact, which measures the broader economic response from employee spending across sectors.
- Oct 29, 2024,
- Updated Oct 29, 2024 5:23 AM IST
NASA’s 2023 Economic Impact Study reveals substantial effects across various economic metrics, detailing the agency’s contribution to both regional and national economies. Using IMPLAN’s 2022 industry data, NASA assessed the economic outcomes stemming from its programs and spending. This input-output modeling approach captures economic activity generated through three primary impact types: direct, indirect, and induced.
Direct impacts represent immediate changes from NASA’s activities, such as shifts in employment or demand within industries directly linked to NASA’s operations. For example, increases in employment within aerospace manufacturing or research services yield direct economic outputs. Indirect impacts arise when industries providing goods and services to NASA, including private contractors, experience changes in their own demand, triggering additional production or supply chain spending.
A company manufacturing propulsion units for NASA may, for instance, increase purchases of electronic components and consulting services, indirectly stimulating economic activity in these sectors. Induced impacts reflect the consumer spending of employees in affected industries, as wages paid to workers translate into regional expenditure on various goods and services.
The report’s comprehensive approach also considers key economic terms such as “Employment,” covering all full-time and part-time roles; “Labor Income,” encompassing wages, benefits, and proprietor income; and “Value Added,” NASA’s unique contribution to GDP via compensation and taxes after intermediate production costs. “Output” measures the aggregate annual production value across NASA's direct, indirect, and induced economic activities. Additionally, tax revenue generated from NASA’s activities encompasses federal, state, and local taxes, including income, payroll, and property taxes.
Interestingly, productivity shifts post-2019 have influenced employment multipliers, with the 2022 IMPLAN data reflecting heightened labor productivity. The Build Back Better Framework, implemented by the Biden Administration, and streamlining efforts by businesses contributed to these productivity gains, resulting in lower employment impacts. Consequently, employment estimates are marginally lower than in past analyses, as many firms reduced redundancies to boost operational efficiency.
The study offers an analytical toolset to project future impacts using outcome multipliers, a practical measure for gauging economic response to varying levels of NASA’s employment or procurement activity. Given consistent industry relationships, these multipliers provide a rapid estimate of economic impacts, though significant economic shifts would warrant further model adjustments.
NASA’s 2023 Economic Impact Study reveals substantial effects across various economic metrics, detailing the agency’s contribution to both regional and national economies. Using IMPLAN’s 2022 industry data, NASA assessed the economic outcomes stemming from its programs and spending. This input-output modeling approach captures economic activity generated through three primary impact types: direct, indirect, and induced.
Direct impacts represent immediate changes from NASA’s activities, such as shifts in employment or demand within industries directly linked to NASA’s operations. For example, increases in employment within aerospace manufacturing or research services yield direct economic outputs. Indirect impacts arise when industries providing goods and services to NASA, including private contractors, experience changes in their own demand, triggering additional production or supply chain spending.
A company manufacturing propulsion units for NASA may, for instance, increase purchases of electronic components and consulting services, indirectly stimulating economic activity in these sectors. Induced impacts reflect the consumer spending of employees in affected industries, as wages paid to workers translate into regional expenditure on various goods and services.
The report’s comprehensive approach also considers key economic terms such as “Employment,” covering all full-time and part-time roles; “Labor Income,” encompassing wages, benefits, and proprietor income; and “Value Added,” NASA’s unique contribution to GDP via compensation and taxes after intermediate production costs. “Output” measures the aggregate annual production value across NASA's direct, indirect, and induced economic activities. Additionally, tax revenue generated from NASA’s activities encompasses federal, state, and local taxes, including income, payroll, and property taxes.
Interestingly, productivity shifts post-2019 have influenced employment multipliers, with the 2022 IMPLAN data reflecting heightened labor productivity. The Build Back Better Framework, implemented by the Biden Administration, and streamlining efforts by businesses contributed to these productivity gains, resulting in lower employment impacts. Consequently, employment estimates are marginally lower than in past analyses, as many firms reduced redundancies to boost operational efficiency.
The study offers an analytical toolset to project future impacts using outcome multipliers, a practical measure for gauging economic response to varying levels of NASA’s employment or procurement activity. Given consistent industry relationships, these multipliers provide a rapid estimate of economic impacts, though significant economic shifts would warrant further model adjustments.