IL, MI Report Significant Uptick in University Economic Impact

March 24, 2016

Illinois and Michigan are among the few states that support regular comprehensive examinations of the role higher education plays in the overall innovation economy. Organizations in both states recently completed studies on university-generated entrepreneurship, licensing, investment and employment, finding a steady rise in university economic impact over the past five years.  In both cases, the increase in university impact was linked to an expanding university role in supporting entrepreneurs and researchers. However, while the Illinois Science and Technology Coalition (ISTC) focuses on the creation of startups directly supported by university programs, the Michigan University Research Corridor (URC) takes a more expansive view, encompassing alumni entrepreneurs as a key pillar of university impact.

In the most recent edition of the Illinois Innovation Index, ISTC reports that the state’s universities more than doubled their annual rate of startup creation between 2011 and 2015. More than 600 companies were launched during that period, with about 80 percent still active as of 2016. About 73 percent of the surviving firms were still based in Illinois.

ISTC limited their analysis to companies founded by faculty, researchers and students while they were still active with their respective institutions. Companies founded by alumni or housed at university research parks that did not use university technology were omitted. Within their sample, one of the most remarkable trends is the rise of non-tech transfer businesses. Entrepreneurial programs and startup competitions have given rise to a new generation of businesses, often founded by students, that do not use university-based research. About 80 percent of the new firms launched in the 2011-2015 period fit this profile.

In addition to the student-launched business trend, ISTC provides a comprehensive overview of the university funds, proof-of-concept centers, and innovation spaces that have emerged in recent years and fueled the boom in university entrepreneurship. Even narrowed to businesses launched by students and faculty attached to universities, ISTC depicts the kind of impacts entrepreneur-focused initiatives can have in a state economy.

Access the Winter 2016 Illinois Innovation Index at:

Michigan’s URC annual report includes the broader, more difficult to capture, impacts of alumni business creation, along with education and other types of impact. The corridor itself represents Michigan State University, the University of Michigan and Wayne State University activities, which increased their statewide economic impact by a reported 35 percent between 2007 and 2015.

The URC report includes a peer ranking of U.S. university innovation clusters in which URC ranked second behind the Southern California cluster of University of California-Los Angeles (UCLA), UC-San Diego and the University of Southern California. The Northern California cluster of Stanford University, UC-Berkeley and UC-San Francisco ranks third.

Though the URC ranks eighth (out of 8 university clusters) in startup creation, it appears to have excelled in other areas. The authors estimate that the corridor’s full economic impact grew from $12.9 billion in 2007 to $17.5 billion in 2015, driven in part by a 50 percent increase in R&D expenditures during the same period.  

Download the Michigan University Research Corridor 9th Annual Economic Impact & Benchmark Report at:


Illinois, Michigan