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Sunday, 24 May 2015 22:00

PROGRESS REPORT: Study shows state research universities compare well on innovation, but lag in commercializing technology

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Michigan’s big three research universities again compare favorably overall to their national peers in terms of innovation, although more progress needs to occur in getting those ideas from the lab to the marketplace.

The University Research Corridor — consisting of Michigan State University, the University of Michigan and Wayne State University — ranks seventh among eight research clusters in the number of startup companies cultivated from 2009 to 2013, seventh in technology transfer, sixth in patents granted, and fifth in intellectual property licenses, according to an annual analysis.

Amid the rankings, however, are indications of progress, including a greater economic impact in West and Southwest Michigan.

The report prepared for the URC by East Lansing-based Anderson Economic Group states that researchers disclosed 611 inventions in 2013, a level that surpassed the five-year average of 519. The URC in 2013 also moved past Illinois in the rankings for invention disclosures. Patent activity was also higher than the five-year average.

That’s an indication that the major push over the last decade to leverage the capability of Michigan’s research universities to drive innovation, business creation and economic activity is gaining traction, said URC Executive Director Jeff Mason. Achieving that end remains “a marathon, not a sprint,” he said.

“Some of the early indicators are suggesting that we’re kind of growing the early stage of the funnel and the pipeline,” Mason said. “That’s a trend or something that hopefully is going to pay off in the long run. That’s a work in progress.”

Another good sign is the “innovation power ranking” that rates technology transfer at each of the research clusters, their level of research and development spending, and the talent they graduate.

The URC ranked first in talent, fifth in research spending and seventh in technology transfer for a composite innovation power ranking of second among the eight research clusters.

Despite the need to focus more on commercialization, the URC’s members overall are seeing “steady growth and steady progress on a lot of fronts” that comes as peer research clusters “are not standing still,” Mason said.

“We are on par with many of these innovation clusters that are more commonly referenced or referred to or thought of by people,” he said. “There’s both a depth and breadth of research activities at these institutions.”

Michigan has seen “pretty significant growth” in the last decade in URC faculty and student entrepreneurship and university research activity, Mason said.

R&D spending at URC members from 2007 to 2013 increased 51 percent to $2.12 billion, the second-largest percentage increase among the clusters that Anderson Economic Group analyzed, behind only Massachusetts at a 72-percent growth rate. More than half of the research spending by URC members is in the life sciences area.

The period of R&D spending growth coincides with Michigan’s long economic downturn that triggered greater attention to using university research to improve the state’s economic fortunes. Additionally, students and faculty are more attuned to entrepreneurship today, Mason said.

“The light switch maybe has flipped on,” Mason said. “These anchor institutions have really helped to weather the economic storm that we faced and are helping us with the growth of the economy as we come out of that.
“I think it’s just a real kind of sea change.”

Mason cites MSU’s planned $88.1 million biomedical research center in Grand Rapids and the Facility for Rare Isotope Beams in East Lansing among the major projects at research universities, in addition to a new biomedical center by Wayne State in Midtown Detroit that opens this year. Those and other projects will help to grow the research portfolio, add to the state’s economy, raise the URC’s impact and increase collaboration between academia and industry, he said.

Formed in 2006, the URC annually contracts with the Anderson Economic Group to gauge its performance and economic impact and to see how well Michigan stacks up against well-recognized research clusters in northern California, southern California, Illinois, Massachusetts, North Carolina, Pennsylvania and Texas.

URC members fostered 10 startup companies in 2013, below the five-year average of 13. From 2009 to 213, 64 companies launched from the URC members, according to the Anderson Economic Group report.

The total economic impact of the URC topped $16.8 billion as of 2013, up $200 million from the year before and up 31 percent from the $12.8 billion in 2006. Of that amount, $597.7 million came in West Michigan and another $218.9 million was in Southwest Michigan.

The Anderson Economic Group report notes that the annual economic impact in 2013 was 21 times what the three URC members receive in state funding.

The three universities combined awarded 32,563 degrees in 2013, more than their peers in the seven other research clusters and barely edging southern California at 32,552. That represents an 11-percent increase from 2006. Of the degrees awarded last year, 10,896 came in the high-demand fields of business, engineering and computer science, which was second only to Pennsylvania at 11,341, according to Anderson Economic Group report.

As of last summer, URC members had 1.2 million living alumni, about half of whom lived in Michigan in 2013 and collectively earned $43 billion. More than 43,000 people who graduated from a URC university live in West Michigan and earned $3.34 billion in 2013, and more than 20,000 reside in Southwest Michigan and earned $1.40 billion, according to the report.

Among the URC alumni, more than 19 percent have founded or co-founded a business. Nearly half of those businesses were in Michigan and they “continue to contribute to the economy and spur further innovation throughout the state,” the Anderson Economic Group report states.

One of the URC’s ultimate goals is to accelerate growth in the number of entrepreneurs among graduates and faculty of the three research universities who can turn over ideas, start new companies and reinvest the wealth they create, Mason said.

“That’s kind of what we need, that virtuous cycle,” he said.

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