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Sunday, 09 September 2018 21:39

Michigan’s research universities pump $18.7 billion into state economy

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The big three research universities in Michigan generated nearly $18.7 billion in economic impact across the state, an amount that grew 46 percent over 11 years even as public funding for higher education waned.

The net economic output by the University Research Corridor — consisting of Michigan State University, the University of Michigan and Wayne State University — equates to more than 20 times the $890 million that the state Legislature appropriated for the three schools, according to an annual economic impact study conducted by East Lansing-based Anderson Economic Group LLC.

In discussing the report last week before the Detroit Economic Club, the presidents of the three URC members used the data to call for greater state support for higher education in Michigan.

“Support for public higher ed is dwindling around the country, and certainly here in the state of Michigan over the recent decades,” said U-M President Mark Schlissel.

U-M receives “roughly” the same level of state support as it did in 1997, a result of the “huge dip” that occurred during the state’s severe economic downturn a decade ago. The state has been unable fully to restore funding levels despite good intentions in Lansing, Schlissel said.

“But in the end game, when they’re trying to balance a budget and everyone’s trying to show how frugal they are, unfortunately higher ed is usually the component of the aspirational budget that gets thrown under the bus, and it’s kicking the can down the road in a way that our state’s going to continue to suffer from,” he said.

Michigan once ranked 20th nationally in per-capita investment in higher education. The state now ranks 43rd and is “heading south in per-capita investments,” Schlissel said.

“There’s absolutely compelling data to show that states’ investment in higher education correlates with per-capita income in the state,” he said. “In order to succeed in business, in order to succeed as a state, you have to invest.”

MSU Interim President John Engler, who served three terms as governor from 1991 to 2003, urged the two candidates in this year’s gubernatorial election — Republican Bill Schuette and Democrat Gretchen Whitmer — to make higher education a priority in the fall campaign.

“I hope there will be a gubernatorial debate here because we went through a whole primary with a lot of candidates (and) almost nobody was talking about higher education. That would be good to get that back on the agenda,” Engler said.

Schlissel said he gets asked constantly about college affordability. He cited U-M’s Go Blue Guarantee that provides a free four-year education for students of families that earn less than $65,000 annually, and how Illinois and Ohio are replicating the program because their legislatures are funding it.

“Wouldn’t it be interesting to challenge our gubernatorial candidates to come up with some kind of college guarantee?” he said. “‘You work hard, you get accepted, we’ll help you pay.’ Wouldn’t that be a nice gift to give to the next generation, especially during good economic times?”

Beyond the $18.66 billion net economic impact in the 2017 fiscal year, other findings in the report on the URC include:

  • 669,274 alumni from URC universities live in Michigan.
  • URC universities generated $579 million in tax revenues.
  • Combined enrollment at the three universities totaled 140,285 students in the fall of 2017, an increase of 12.6 percent from 2006.
  • The URC accounted for more than 90 percent of academic research and development in Michigan.

The 2018 economic impact report follows a May annual benchmark study by the Anderson Economic Group that showed URC universities kept up with their peers during the past decade in graduating talent, although they continue to lag in commercializing innovations stemming from research, as MiBiz reported at the time.

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