Commentary: Michigan Pols Fail to Invest in Research Universities

Commentary: Michigan Pols Fail to Invest in Research Universities

June 15, 2012/The Detroit News


Michigan's public higher education system is one of the top assets Michigan has to grow its economy.

At Michigan Future Inc., the nonpartisan think tank I lead, we believe that investing in a quality, agile higher education system is economic development priority No. 1.

Business Leaders for Michigan, representing the CEOs of our state's largest businesses, also believes in the strategic importance of higher education, advocating for a $1 billion increase in annual state funding over the next 10 years.

Unfortunately, it's clear our state's political leaders still don't get it.

Michigan spent most of the 20th century building a world-class system of higher education —both universities and community colleges. They are vital to developing the concentration of talent we need to be successful in a knowledge-based economy. That is particularly true of our major research universities.

In an increasingly knowledge-based economy, the strategic importance of our major research universities can't be emphasized enough.

One can make a strong case that the most productive state and local economic growth policies over the past several decades have been public investments in research universities in Austin, San Diego and North Carolina's Research Triangle. The payoff in each case has been huge.

Try this thought experiment: Assume Michigan's three major research universities —the University of Michigan, Michigan State University and Wayne State University — decide to take offers to relocate all or part of their operations. But not just someplace else in Michigan, any place on the planet. How much would the incentive packages put together by communities and countries be?

What is almost certain is that there would be bids from every state in the U.S. and most countries on the planet. And the odds are high that the total incentives offered would be among the largest ever offered.

Can you think of other Michigan enterprises that would command a larger incentive package? Maybe the entire GM or Ford Michigan operations. Nothing else would be close.

All around the world, nations and regions are trying to replicate what we have — top-notch research universities. This is widely understood by both political and business leadership nearly everywhere.

Why? Because they understand that the best research universities are essential engines of economic growth.

Michigan's three major research universities have combined annual revenue of around $8 billion and 50,000 employees.

This would be a powerful economic engine without any spinoffs. But there are major spinoffs. New enterprises that come from commercializingnew knowledge, a greatly expanded pool of human capital and helping create the kind of communities that attract talent from across the planet. Where talent concentrates, so comes knowledge-based enterprises from across the planet, as well. It is that combination that makes world-class research universities such powerful economic engines.

Looking at the state's support for Michigan's research universities, one wonders what planet our state's political leadership is living on.

Rather than offer the big incentive packages for our research universities to relocate that the rest of the world would offer, our political leaders enacted record cuts a year ago, to cap off a decade of cuts. They added up to a 29 percent reduction in state support for higher education in the last decade. This year, they passed a budget with a paltry $36 million increase in state spending for all 15 public universities. Making matters worse, they allocated the smallest increases to the three research universities. The nonresearch universities received increases ranging from 2.2 percent to 8.2 percent. For the research universities the increase was minuscule, ranging from 0.7 percent for Wayne State University to 1.6 for the University of Michigan.

This is not smart. It is hard to imagine how Michigan moves from one of the country's poorest states (we are now 36th in per capita income) to one of its most prosperous without reversing our decade-long disinvestment in our research universities.

Lou Glazer is president and co-founder of Michigan Future Inc.