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Michigan’s University Research Corridor Generates $17.5B in Economic Impact

January 28, 2016

Although universities are often pitted against each other in athletic events or competitions for state funding, one area in which they have increasingly been able to collaborate is in research and development. Modeled after the hugely successful Research Triangle in North Carolina, the University Research Corridor (URC), an alliance of Michigan’s three largest higher education institutions – Michigan State University, the University of Michigan, and Wayne State University – was established by the state in 2007 with the goal of accelerating statewide economic development. Employing several facets of analysis not typically seen in higher-ed economic impact reports, the URC’s ninth annual assessment by independent evaluator Anderson Consulting Group is able to: quantify total degrees awarded, R&D expenditures, and technology transfer activities to estimate the cumulative impact of the corridor; analyze how the URC leads to jobs and income for residents and state revenue in each of Michigan’s counties; and, compare the URC’s performance to peer university innovation clusters nationwide. They find that the URC generated approximately $17.5 billion in net economic impact in 2014.

As a way of quantifying the economic influence of the URC’s activities, the authors sought to answer two guiding questions: what would be the loss to Michigan if the URC universities did not exist in the state, and what would be the loss to regions across the state if the URC universities were not there? Although generating economic impact is not the main goal of the URC universities, the report finds they contribute $11.5 billion in direct and $5.9 billion in indirect impacts, totaling nearly $17.5 billion in net economic impact. This accounts for operations and spending, talent, research, and other innovative activities. 

Every county in Michigan is in some way influenced by the URC. In addition to current URC students coming from every county in Michigan, counties are also impacted through activities such as partner hospitals, extension offices, and AgBio Research Centers. In 2015, there were approximately 620,000 URC alumni living in Michigan whose earnings were estimated at $44 billion – almost 22 percent of all wage and salary income in the state.  Since URC alumni live throughout the state, each county also benefits from these alumni earnings.

The report is also somewhat unique in that it compares the URC to other established research clusters. The Innovation Power Rankings assess the URC’s performance relative to its peer clusters for research spending, talent, and technology transfer activities. The peer clusters analyzed are:

  • Northern California: University of California at San Francisco, University of California at Berkeley, and Stanford University;
  • Southern California: University of California at Los Angeles, University of California at San Diego, and University of Southern California;
  • Illinois: University of Chicago, University of Illinois at Urbana-Champaign, and Northwestern University;
  • Massachusetts: Harvard University, Massachusetts Institute of Technology (MIT), and Boston University;
  • North Carolina: Duke University, University of North Carolina at Chapel Hill, and North Carolina State University;
  • Pennsylvania: Pennsylvania State University (all campuses), University of Pittsburgh (all campuses), and Carnegie Mellon University; and,
  • Texas: University of Texas at Austin, Texas A&M University (College Station, and Commerce), and Rice University.

Research spending (measured by total R&D and total R&D in science and engineering) and talent (measured by number of degrees and number of high-tech degrees) each comprise 40 percent of the Innovation power Rankings’ composite score, while technology transfer activities (licensing revenue, startup companies, patent grants, technology licenses, and invention disclosures) represent the last 20 percent.

In the composite score, the URC ranks fifth in research, seventh in technology transfer, and first in talent, giving it a second place composite ranking. Southern California ranked first in the composite ranking, with a second place ranking in both research spending and talent, and a third place ranking in technology transfer. Northern California ranked first in the research spending category, while Massachusetts ranked first in the technology transfer category.

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