Eli Lilly

Economic Impact of

EliCompany Lilly and

in Indiana

The Economic Impact of Eli Lilly and Company on the State of Indiana and the Indianapolis-Carmel Metropolitan Statistical Area

June 2009

Prepared by

Bruce L. Jaffee, Professor and Chair, Department of Business Economics and Public Policy, in conjunction with the Indiana Business Research Center, Kelley School of Business, Indiana University, Bloomington, Indiana

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Abstract

Eli Lilly and Company (Lilly) has a significant impact on both the size and the growth rate of the Indiana economy and the Indianapolis–Carmel metropolitan statistical area (MSA), which contains its headquarters and many of its facilities. Lilly has also had a significant impact on direct, indirect and induced employment in the state, ranking as one of Indiana’s largest employers and supporting additional jobs in other firms by a rate of nearly 2-to-1.

This study shows that in 2007 Lilly contributed $8.03 billion, approximately 3.3 percent, to Indiana’s gross state product (GSP is the state equivalent to gross domestic product or GDP). That is, if Lilly did not exist or moved all its operations to another state, Indiana’s GSP would be 3.3 percent lower than its current value. This figure, consistent with the definition of GDP, does not count the additional ripple effects associated with that loss. Lilly ranks #6 in Indiana in terms of number of employees and has a total statewide economic footprint of $4.1 billion.

Of special note is the “multiplier analysis” of Lilly’s total purchases and employment. By tracking the company’s spending in the state and region, we find that every dollar of Lilly’s spending on payroll and purchases is increased by approximately 58 percent in the state. From an employment perspective, the multiplier is even higher. For every employee on the Lilly payroll, there are an additional 1.8 jobs that can be attributed to Lilly’s presence in the state. All told, the Lilly payroll, employment direct...