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Eli Lilly and Company

Last modified: Thursday, June 25, 2009

Indiana University study shows Lilly's major impact on jobs in the Hoosier state

Company contributes more than $8 billion to Indiana's GSP

June 25, 2009

BLOOMINGTON, Ind. -- According to a new study by the Indiana University Kelley School of Business and its Indiana Business Research Center (IBRC), Eli Lilly and Co. (Lilly) contributes about $8 billion to the state's economy and is Indiana's sixth largest employer with more than 14,000 employees.

The study, "Economic Impact of Eli Lilly and Company in Indiana", details how Lilly's economic presence contributes significantly to the state's economic and job growth.

Major highlights of the study include:

  • 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).
  • In 2007, in addition to the taxes that the company pays directly to state and local governments in Indiana, Lilly's spending in the state and its ripple effects generated more than $215 million in state and local tax revenue in Indiana. Approximately, $176 million was generated in the Indianapolis - Carmel MSA.
  • All told, the Lilly payroll, employment direct effects and employment ripple effects account for about 43,500 jobs across the state (referenced in the study as the multiplier effect).
  • Lilly has a significant impact on direct, indirect and induced employment in the state, ranking as Indiana's sixth-largest employer and supporting additional jobs in other firms by a rate of nearly 2-to-1. Lilly has a significant impact on both the size and the growth rate of the Indiana economy and the Indianapolis-Carmel metropolitan statistical area, which contains its headquarters and many of its facilities.
  • For every Lilly employee, there are an additional 1.8 jobs that can be attributed to the company's presence in the state.

These are some of the key findings from the new study which was commissioned by Lilly to better define its economic presence in the state. Bruce Jaffee, chairperson and professor of business economics and public policy, and colleagues at the IBRC conducted the study.

"Even though it is facing unprecedented challenges due to the current state of the economy, Lilly remains one of our state's most dynamic and significant employers," Jaffee said. "The report reinforces the company's importance to Indiana's economy and its contribution to the state's growing life-sciences sector."

Jaffee said it is noteworthy that the report takes a conservative approach that does not include any spending by retired Lilly employees or any non-cash contributions that the company or its employees make to the local economy through such activities as volunteer services.

Furthermore, the study makes no attempt to quantify the effect of Lilly's international reputation on the quality of life, name recognition or prestige of Indianapolis or the state of Indiana.

John C. Lechleiter

John C. Lechleiter

Print-Quality Photo

Lilly Chairman and Chief Executive Officer John Lechleiter, Ph.D., said results reinforce the company's position as a critical piece of the economic development mix in Indiana. A recently released IBRC study said life sciences now rival the auto industry as Indiana's most dynamic manufacturing sector.

"We are proud to keep thousands of Hoosiers employed in this tough economy," said John C. Lechleiter, Lilly's chairman, president and CEO. "These jobs also are incredibly important during this point in time because it's another key piece of data that supports our position about the jobs we sustain and our role in the state's economy. As we have discussions with Congress and opinion leaders about health care reform, these results solidly back our position."

IU's study examined three types of effects -- direct, indirect and induced -- to understand the nature of the economic ripple generated by Lilly in the region and state. The study also reported on the multiplier effect -- an economic response associated with an increase or decrease in direct effects.

For example, the report states that "every dollar expended by Lilly on purchases and payroll is estimated to be multiplied by approximately 1.58 within the state of Indiana -- or, every dollar spent by Lilly produces, on average, almost $0.58 in additional economic activity.

Lechleiter said numbers alone tell an important but incomplete story about Lilly. Many of the jobs cited in the study are high-paying positions that contribute significantly toward state tax revenues. And, importantly, many of them also contribute toward innovation that is driving new cures for illnesses like cancer, diabetes and Alzheimer's disease.

"Innovation is the heartbeat of the biopharmaceutical industry," Lechleiter said. "The thousands of jobs identified in Professor Jaffee's study, in many cases, are held by people who are directly or indirectly working to find better treatments and cures to some of our most devastating illnesses. It's important to remember that the life expectancy of the average American born in 1909 was 47-years old. Today -- 100 years later -- it's 78. That's the result of innovation and having the right people in the right jobs here in Indiana."

About IBRC

Established in 1925, the IBRC is an information outreach service of the Kelley School. It provides and interprets economic, demographic and social information needed by business, government, education and other nonprofit organizations, and individual data users in the state and throughout the nation. Its research can be found online at

About Lilly

Lilly, a leading innovation-driven corporation, is developing a growing portfolio of pharmaceutical products by applying the latest research from its own worldwide laboratories and from collaborations with eminent scientific organizations. Headquartered in Indianapolis, Ind., Lilly provides answers - through medicines and information - for some of the world's most urgent medical needs. Additional information about Lilly is available at