PITTSBURGH SUPERCOMPUTING CENTER. February 2011

Economic Impact of the

Pittsburgh Supercomputing Center:

Talent and Technology Supporting Jobs in Pennsylvania

PITTSBURGH

SUPERCOMPUTING

CENTER

About the Pittsburgh Supercomputing Center

The Pittsburgh Supercomputing Center (The Center) has been making significant economic impact and serving as a powerful resource for Pennsylvania for

twenty-five years. Interviews and analysis conducted for this report by Fourth Economy, an independent national economic development solutions provider, concluded that the Center and its team have played a critical role in the development of technology and have attracted significant federal investment to the Commonwealth of Pennsylvania. In addition, the Center has supported the development of talent both directly, with over 300 present employees or former ones who have moved on to other Pennsylvania companies, and indirectly by vigorous support of Science, Technology, Engineering, and Mathematics (STEM) education. The Pittsburgh Supercomputing Center is a technology and talent asset that is a state resource with a national reputation.

What is Supercomputing?

Supercomputers are powerful computers that allow universities,

government and private industry to conduct research much faster and to use huge amounts of complex data. This research is used to solve problems which we face every day, including design of synthetic antibacterial materials that reduce hospital infections, better weather prediction, more effective strategies for coping with epidemics, and designing better lenses that darken in sunlight.

• Supercomputers are the most powerful computers available at any given time.

• These machines are a vital tool for scientific advances by expediting the creative exploration and discovery process.

• The people who support the use of supercomputers are essential to supercomputing in Pennsylvania.

IMPACT

PITTSBURGH

SUPERCOMPUTING

CENTER

The Economic Findings

The economic impact of the Center can be quantified by both direct and indirect measures. The Center is a technology anchor that attracts federal research funding and, in turn, provides investment capital to support jobs in the state. In addition, the Center helps prepare students for careers that support Pennsylvania businesses. Our analysis included a review of Center data, independent interviews with private companies and former employees, and detailed economic impact analysis. The results of this effort highlight the following:

Investment Attraction

Historically, $13.20 in Federal funds are attracted to Pennsylvania for every $1 of state investment. Over the past twenty-five years, $34 million in state investment in PSC has attracted $450 million in federal investment. This leverage ratio demonstrates the straightforward return on investment of the Center. These federal funds will go elsewhere without some level of state support.

Economic Impact

The Pittsburgh Supercomputing Center is a significant job anchor for the Commonwealth of Pennsylvania. The Fourth Economy team performed an economic impact analysis utilizing IMPLAN modeling software and found that the Center supports over 90 direct, 528 indirect and 232 induced jobs in the Commonwealth through its economic impact. This impact is based on the approximately $18 million per year in expenditures made by the Center on staff, equipment and services. This employment figure includes the 90 full time employees at the Center with the remaining jobs seen in companies which support the Center, research partners and jobs in the community that provide services to center employees. The economic impact of the Center itself is almost $134 million per year.

IMPACT

The Pittsburgh Supercomputing

Center and its PA research partners support:

• Overall impact of $219 million annually in Pennsylvania • 1,666 Pennsylvania jobs • $34 million from Pennsylvania

over 25 years equates to $450 million in federal investments • Employees at the Pittsburgh

Supercomputing Center and its Research partners pay $2 million in payroll taxes each year

• A vital resource for companies seeking to innovate

A Significant Return

on a State Investment

In addition to the Center’s impact, there are a reported $24 million in annual grant and research expenditures made by PA research organizations that depend upon the Center’s people and computing power. Since Pennsylvania is third in the nation in both national academic supercomputer usage and number of users, it is safe to conclude that much of this research and corresponding research expenditure would not have happened if it were not for the Center. The states in first and second place are also locations of supercomputing centers -- not surprising, but an important fact. The impact of these grant and research expenditures includes support of over 816 jobs and an economic impact of $85 million in expenditures made in the Commonwealth as a result of this activity. This information illustrates that the Center provides a significant economic benefit to the Commonwealth. The Center and its partners support more than 1,666 jobs in Pennsylvania and provide an economic impact of $219 million annually. Fourth Economy analysis shows that the direct employment of the Center and the indirect employment supported by the research it conducts, generate approximately $2 million in personal income tax paid to the Commonwealth on an annual basis.

An increased investment by the Commonwealth would allow the Center to realize even greater economic impact. Commonwealth funding cutbacks have severely limited the Center’s services in the areas of STEM education, teacher development and other activities that would provide an even greater economic benefit.

EDUCATION

$134M PSC Impact 517 Induced 1059_Indirect 90 Direct

Pennsylvania Economic

Impact of the PSC & PA

Researchers

1,666

Total Jobs

$219 Million

Total Impact

State Resource, National Reputation

In the past state fiscal year, the Center has served as a resource to 35 Pennsylvania institutions that have utilized almost 13 million supercomputer processor hours with an estimated commercial value of over $6 million. This resource enabled Pennsylvania researchers to rank in the top three in usage of NSF-based supercomputing time.

The Center was also instrumental in the development of PennREN, a statewide research and education network that received a $100 million federal investment. This network will generate significant job creation, in addition to provide broadband connectivity to many rural non-profits.

Keeping Pennsylvania Competitive

The Center provides a focal point for the state’s supercomputing capabilities and talent. It allows Pennsylvania institutions to compete for federal investment in research and development and in job creation. It also serves as a resource for private companies.

EDUCATION

The Three Rivers Optical Exchange (3ROX) provides Research and Education Network services to six Intermediate Units in Western Pennsylvania. These IU’s cover 128 school districts, with over 800 schools, over 25,000 teachers and over 300,000 students. The network connectivity and services associated with 3ROX allow the Intermediate units to connect to a global

community in which they can discover new ideas, research and applications.

3ROX:

Network for Education

TALENT

Private Company Catalyst

In addition to the specific economic measures, the Center supports product development and, in many cases, cost savings at Pennsylvania companies. National agencies concerned about U.S. industrial competitiveness assert that powerful computing is a transformative technology. The Center is a cost effective way for the many companies that cannot afford their own supercomputer or the needed computing expertise, to utilize this capability. The Center has the talent to assist them in research and product development, growing economic potential and providing business attraction to expanding companies.

The Future

The Center is poised to contribute to many new aspects of Commonwealth economic activity. With large-scale data handling capability, the Center can host and support data intensive applications ranging from genomics and pharmaceutical R&D to epidemiology and analyzing social networking. Without state funding the Center is not able to compete with other supercomputer centers receiving support from their states. This creates a substantial disadvantage when the National Science Foundation or National Institutes of Health is soliciting bids. In 2007, a contributing factor to the

Pittsburgh Supercomputing Center’s losing a bid for a grant award of $60 million, was the state of Tennessee’s providing a substantial investment to their state’s supercomputing center.

A consortium of Massachusetts universities is building a $168 million new Supercomputing Center in collaboration with Harvard, MIT, Boston University and Northeastern University and the University of Massachusetts and has recently received $25 million in state support for the effort.

The University of Illinois recently received $72.5 million in state funds to build a new Supercomputer facility and landed an NSF award of over $208 million over four years for equipment costs.

Tennessee has committed in recent

What the Others

are Doing...

INDIRECT IMPACT

employees

90

HIGHER EDUCATION TALENT FUNDING ATTRACTION INNOVATION

in Federal Funding

$450

MILLION

ATTRACTED MORE THAN

MORE THAN

300

_{academic users}

35

i n s t i t u t i o n s o f

@

HIGHER EDUCATION

What does the

DIRECT

IMPACT

$18 MILLION

spend in salaries, equipment & expenses

13 Million

processor hours

To t a l l i n g

ALMOST

with a commercial

$6 Million

PA RESEARCHERS rank in top

3

OF TERAGRID usage

AMONG U.S. STATES

300

Trained more than

EMPLOYEES

Pennsylvania companies

PENNREN

R e s e a r c h &

WILL CREATE JOBS IN

RURAL & URBAN

communities in PA

more than

1,666

COMMONWEALTH JOBS jobs through economic impact

F e d e r a l I n v e s t m e n t

13 : 1

A N N U A L L Y

MILLION

$24

in grants & research

PA-BASED PSC USERS ATTRACT

with an economic impact of

$84.8 MILLION

FOR THE COMMONWEALTH

A

economic impact of

MILLION

worth approximately

Education Network

NOW WORKING @ SUPPORTS vs. State Investment

25

years of

DISCOVERIES IN Regularly awarded

G R A N T S

for research from

NSF

NIH

and

$219

A N N U A L

$1 Million PA INVESTMENT

mean to the Commonwealth of PA?

PITTSBURGH

SUPERCOMPUTING

CENTER

science & engineering

INDIRECT IMPACT

employees

90

HIGHER EDUCATION TALENT FUNDING ATTRACTION INNOVATION

in Federal Funding

$450

MILLION

ATTRACTED MORE THAN

MORE THAN

300

_{academic users}

35

i n s t i t u t i o n s o f

@

HIGHER EDUCATION

What does the

DIRECT

IMPACT

$18 MILLION

spend in salaries, equipment & expenses

13 Million

processor hours

To t a l l i n g

ALMOST

with a commercial

$6 Million

PA RESEARCHERS rank in top

3

OF TERAGRID usage

AMONG U.S. STATES

300

Trained more than

EMPLOYEES

Pennsylvania companies

PENNREN

R e s e a r c h &

WILL CREATE JOBS IN

RURAL & URBAN

communities in PA

more than

1,666

COMMONWEALTH JOBS jobs through economic impact

F e d e r a l I n v e s t m e n t

13 : 1

A N N U A L L Y

MILLION

$24

in grants & research

PA-BASED PSC USERS ATTRACT

with an economic impact of

$84.8 MILLION

FOR THE COMMONWEALTH

A

economic impact of

TO THE COMMONWEALTH OF PA

MILLION

worth approximately

Education Network

NOW WORKING @ SUPPORTS vs. State Investment

25

years of

DISCOVERIES IN Regularly awarded

G R A N T S

for research from

NSF

NIH

and

$219

A N N U A L

$1 Million PA INVESTMENT

mean to the Commonwealth of PA?

PITTSBURGH

SUPERCOMPUTING

CENTER

science & engineering

PITTSBURGH

SUPERCOMPUTING

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