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Report: Michigan’s URC A Critical Asset

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mattroush Matt Roush
Matt Roush joined WWJ Newsradio 950 in September 2001 to spearhead the...
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LANSING — At the forefront of Michigan’s economic resurgence is the University Research Corridor, an alliance of Michigan’s three largest research institutions — Michigan State University, the University of Michigan and Wayne State University.

According to the 2011 Empowering Michigan Economic Impact Report released today, Michigan’s University Research Corridor continues to grow in areas critical to the state’s resurgence: student enrollments, degrees granted in the high-tech and high-demand sectors, number of alumni living in the state contributing to the state’s economy through wages and taxes, research and development expenditures, and start-up companies. The study was conducted by Anderson Economic Group building upon data collected over the past four years.

The report showed that the URC invested more than $1.8 billion in research, had an economic impact of more than $15.2 billion on the state, and educates 137,583 students. The universities have more than a million alumni with more than 573,000 living in Michigan.

“The growth in research and development expenditures of almost 30 percent over the past five years is an indicator of how truly world class these research universities are and what a tremendous asset they are to the state of Michigan,” said Jeff Mason, executive director the Michigan’s University Research Corridor.

Added Patric Anderson, founder and principal of the economics firm: “This report shows that the URC universities contributed over $15 billion in net economic impact to the state’s economy last year. This is over 17 times greater than the state’s funding for URC universities. Additionally, the state of Michigan receives $426 million in tax revenue from URC employees and alumni that it would otherwise not have received if the URC universities were not located in Michigan.”

Major findings from the report include:

High-Tech and High-Demand Degrees
One direct measure of the URC’s contributions to the state is the number of degrees granted by its institutions. Last year the URC granted 32,157 degrees, up 7 percent from 2006. Additionally, the URC has increased each year the number of high-tech degrees it awards, going from 6,993 degrees awarded in 2006 to almost 8,000 total degrees in high-tech fields in 2010 — representing a 13.3 percent increase. The number of degrees awarded in high-demand fields such as business, computer science, and engineering, as well as the medical fields, has also increased.

Research and Development
Universities serve an important role in the development of new ideas, products, and services. A portion of this research leads to new technologies that have commercial potential. In 2010, the URC spent almost $1.9 billion on research and development. This is an 8 percent increase from the previous year, when the universities spent more than $1.7 billion. In the past five years (2006 to 2010), the URC universities increased their R&D spending by 30 percent.

Number of Cultivated Start-Ups
Another measure of a university’s success is the number of start-up companies that are cultivated within the research and development process. In 2010, the three universities that comprise the URC produced 14 start-ups. Since 2002, the URC has cultivated 131 start-up companies, 71 of which have formed within the past five years.

URC Expenditures
The University Research Corridor makes significant contributions to the state’s economy. URC institutions spent more than $7.7 billion on operations in FY 2010 and employed 50,531 full-time-equivalent faculty and staff throughout Michigan.

Some additional findings in the report:
* The URC is serving more students adding 5,948 extra student slots since 2006 for a total of 137,583 (75 percent from Michigan, 15 percent from other states and 10 percent from more than 100 other countries). That includes nearly 8,000 students who graduated in 2010 with degrees in high-tech disciplines crucial to a knowledge-based economy.
* The URC economic impact on Michigan increased from $12.9 billion in 2006 to $15.2 billion in 2010. There were more than 573,000 URC alumni living in Michigan earning $28.6 billion in 2010, which is 16.4 percent of all wage and salary income in the state.
* The consortium generated $426 million in 2010 state tax revenue even as state support for higher education declined.
* The URC expended $1.877 billion in R&D, up $427 million over 2006.
* The URC averages 135 patents per year (140 in 2010) and has spun-off an average of 14 companies per year since 2006.

“Higher education plays an increasingly significant role in the transformation of our state, region and national economy. This report is clear evidence of that impact,” said UM President Mary Sue Coleman.

“We’re working diligently and creatively to make university resources accessible to entrepreneurs and businesses, large and small,” said MSU President Lou Anna K. Simon. “The outreach we are making to businesses across all regions of our state is important and something we take great pride in contributing toward the reinvention of Michigan’s economy.”

Allan Gilmour, president of Wayne State, said the report highlights the impact of having universities and business moving forward in tandem.

“Business and universities are both part of the solution to our economic challenges,” Gilmour said. “It’s the combined power that can really make a difference.”

The URC was founded in 2006 to leverage the power of Michigan’s research universities to transform, strengthen and diversify the state’s economy. For more on the URC, visit: www.urcmich.org

Read the full 2011 report at: http://urcmich.org/reports_studies/pdf/URC-Econ-Impact-2011.pdf.

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