This study aims to estimate the impact of higher education and public research on local economics. Universities in Lyon and St Etienne will be used. A university influences its local economic environment in two ways: First, its emplaoyees and students spend their money locally thus stimulating local growth. Secondly, the presence of a university can improve productivity for local businesses or attract new businesses. This is the case for locally trained staff, collaborative research with local businesses or business stimulating schemes. First we will carry out a short term analysis of demand, so as to estimate the economic fallout of expenditure coming from the Universities in Lyon and St Etienne (staff and students, effects on local employment). Then we will analyze long term supply, namelu student training and contribution of local research on local companies.