R&D spending by state's Big Three universities rivals top U.S. institutions; But they receive less supplemental funding, study finds, boosting argumen
BYLINE: Marisa Schultz and Jennifer Mrozowski
Michigan's Big Three universities rival the country's top research institutions in spending on research and development, and act as an economic engine for the state, but they receive significantly less in supplemental funding than their competitors nationwide.
That's according to a report commissioned by the newly formed University Research Corridor -- an alliance formed by Michigan State University, the University of Michigan and Wayne State University to spark Michigan's economy by joining forces on research.
The report found that U-M, MSU and Wayne State account for 94 percent of the money that the state's academic institutions spent on research and development in 2005, amounting to almost $1.4 billion.
Other top research clusters nationwide spent similar amounts -- between $1.2 billion and $1.4 billion -- but receive far more funding from other sources, such as industry and government.
The study, prepared by the East Lansing-based Anderson Economic Group, could bolster the argument by the three universities that they should be funded separately from the state's 12 other public universities.
"If we were to let these research institutions deteriorate we would lose tremendous economic benefits," said Patrick L. Anderson, principal and CEO of Anderson Economic Group. "We would lose a billion dollars in research activity. ... We would lose the additional earnings of tens of thousands of graduates annually that go into the Michigan economy. It would be a disaster to the state."
Despite the infancy of their collaboration and their funding shortcomings, MSU, Wayne State and U-M stack up very well compared to other top-ranked academic research clusters: North Carolina's Research Triangle Boston's Route 128 Corridor in Massachusetts and Penn State/Pittsburgh/Carnegie Mellon in Pennsylvania, according to the report.
"We know there are areas where we need to improve ... but we also know that we are very strong," said MSU President Lou Anna Simon. "I think we are much stronger than people in Michigan would recognize and people around the world. What we are doing is for a global audience and the three institutions compare favorably with other major research groups on a global scale."
The universities commissioned the report to have a concrete number documenting their economic impact on the state and to benchmark their success with other leading universities. More extensive findings should be available by the end of the summer.
Ideally, the report would be conducted at least every other year. "We are committed to accountability," Simon said.
With less funding from industry and government, Michigan's University Research Corridor has to spend more of its own institutional money on research -- 25 percent compared to national average of 18 percent. That has the universities' presidents calling on businesses to tap the institutions' assets to help revive the state's troubled economy.
"We need for the industry to look to us as allies and partners," said Wayne State President Irvin Reid. "There's always a tendency to look out of state instead of in-state for some reason. What we are saying is partner with us."
The report comes a week after state lawmakers cut nearly $26 million in higher education appropriations and deferred more payments to universities, about $140 million, until next fiscal year in effort to help plug an $800 million state budget deficit.
Reid said he can't understand why the state would cut funding to the three institutions, proven economic starters, at time when the state more than ever needs to diversify its economy and at time when University Research Corridor institutions are engaging in research activities that would help.
"For economic development, there needs to be a shifting of priorities in the state of Michigan," Reid said.
The report found that Michigan's growth rate for research and development trails competitors at North Carolina's Research Triangle (Duke, University of North Carolina Chapel Hill and North Carolina State) and Penn State/Pittsburgh/Carnegie Mellon in Pennsylvania. Research growth is largely attributable to increasing funding assistance from state, local and industry sources, the study said.
Despite the funding imbalance, Michigan's University Research Corridor outranked Pennsylvania and North Carolina research institutions for patents granted and business licensing revenue. Those are considered strong indicators of innovation and economic growth, the study said.
Michigan's Big Three also outpaced Boston's Route 128 Corridor in Massachusetts (Harvard, MIT and Tufts) for growth in research expenditures.
Measuring up
The University Research Corridor -an alliance of MSU, U-M and Wayne State - aims to accelerate economic growth in Michigan. The corridor institutions:
¥ Have 618,000 living alumni in Michigan who earned an estimated $24.3 billion or 7.1 percent of all personal income in Michigan last year.
¥ Spent $6.5 billion annually on operations last year, or 2 percent of the statewide economic activity. The three employed 46,398 full-time employees.
¥ Spend $1.37 billion on research and development, similar to other academic research clusters in North Carolina, Massachusetts and Pennsylvania. The URC funds about 25 percent of its research, whereas the other clusters fund between 2 -16 percent of their own research, receiving outside funding for the remainder.
¥ Have on average 126 patents granted annually, compared to competitor universities in North Carolina (111), Massachusetts (204) and Pennsylvania (123)
¥ Increased research and development expenditures by 7.7 percent between 2000 and 2005, compared to 8.8 percent for all U.S. universities.
Source: Anderson Economic Group, LLC