The Real Big Three

The Big Three — Ford, General Motors and Chrysler — controlled the fate of this state for a century. When they struggled, Michigan struggled. But as the auto industry cuts jobs, closes plants and absorbs financial losses, the place of the domestic auto industry in the future is as just another player in a field of players.

The real Big Three in the state are University of Michigan, Michigan State University and Wayne State University — three institutions that experts say are integral to the state's future economic success.

Together the three schools bring in hundreds of millions of federal research dollars, create tens of thousands of jobs and spawn dozens of start-up companies and third-party licensing agreements annually. They also serve as incubators for a high-skill workforce and innovative public-private partnerships. They and the other schools in this state and nation are the engines that will drive the country.

Lou Glazer, president of Michigan Future, Inc., says the importance of universities has to do with their ability to attract and produce "talent," that is educated, creative and entrepreneurial people. With this group at the forefront of the knowledge economy, "universities in general and research universities in particular, are the most important asset," he says.

Glazer says there are three major factors that make universities economic engines in the knowledge economy. First, they are major employers that provide large numbers of well-paying jobs.

Second, because of the talent they produce, they attract corporate investment. For example, he says, universities are the "main attractors of entities like Google, Pfizer and Toyota."

Third, Glazer says, "Universities … are major players in creating vibrant central city neighborhoods." These are the communities in which talent sector employees want to live and work, he says.

In late November, the three universities unveiled a new collaboration called the "University Research Corridor" which aims to bring jobs to the state, speed technology transfer efforts and provide a means for cooperation between the schools' respective faculties.

What makes universities so valuable?

David Cole, chairman of the Ann Arbor-based Center for Automotive Research, says with a shortage of financial, natural and human resources in Michigan, collaborations between universities and industry or universities and other key economic stakeholders have become a necessity. It's this partnership capacity that makes universities major players in the future economy, he says.

The just-announced University Research Corridor may exemplify this new reality. Joe Serwach, a spokesman for the University of Michigan, says faculty members from the three schools have collaborated on an individual basis in the past. Now, however, teamwork between the institutions will be more frequent and far-reaching.

"It's kind of like going from dating to being engaged," he says. "It's the next level.

Partnerships between universities and regional business are also ramping up these days. While Cole, who once taught engineering at U-M, says it was once considered a sin for universities to be involved with the private sector, "That's not true today." Citing one example, he noted that Ford and GM no longer do certain kinds of basic research, instead opting to support research programs within the University of Michigan's mechanical engineering department. Such collaborations don't get a lot of visibility, he says, but have "been accelerating for some time."

Fred Reinhart, associate vice president for technology commercialization at Wayne State University, noted that for many corporations, basic research is "speculative, expensive and it's hard for them to justify that on the bottom line." That's not the case for big research universities, which have the capacity to generate completely new product lines and industries out of basic research. In this respect, he says, universities are becoming more important in creating industries that are "China-proof," meaning industries built around technology protected by intellectual property laws not those that rely on the ability to manufacture goods cheaply.  

Wayne State, Reinhart noted, is at the forefront of research on nanomaterials, which are created from tiny particles and have powerful commercial applications. For example, Wayne State researchers are experimenting with nanomaterials that can facilitate drug delivery in cancer patients and create food packaging that will allow products to stay fresh longer.

Cole says universities also have the power to address the brain drain problem in Michigan. "Demographics tell us … that we're going to run out of people with skill," says Cole. The universities not only produce these skilled workers, but can also facilitate the continuous learning that will be important to the workforce of the future, he says.

Mike Finney, president and CEO of the economic development organization Ann Arbor SPARK, says his office is in daily contact with University of Michigan officials and views the institution as a "tremendous resource" to Ann Arbor SPARK's efforts.

Finney says he's seen a shift in the three universities' roles in the last 5 or 6 years. In 2000, when he worked with the Michigan Economic Development Corporation, he says, "I didn't sense the universities were highly focused on being an economic engine to the state." Today, he says, that is a major emphasis at all three universities.

He credits the changing role to leadership at the three schools. All three university presidents serve on boards or committees "tied directly to economic development," he says. "They recognize the hardship that Michigan is suffering through right now."

In fiscal year 2006, the University of Michigan produced 288 new invention disclosures, 79 U.S. patents, 97 license agreements and nine business-start-ups. During the same period, Michigan State produced 156 invention disclosures, 21 patents, 37 license or option agreements and 7 start-up businesses. Wayne State produced 57 invention disclosures, 18 patents, 15 license or option agreements and 1 business start up during fiscal year 2005, the latest year for which data is available.

In addition, both the University of Michigan and Michigan State University earned mentions in a study of biotechnology commercialization efforts at national and international universities. According to the 2006 study by the Milken Institute, an economic think tank in Santa Monica, California, the University of Michigan ranked 13th among universities on a measure that weighs the number and impact of an institution's biotechnology patents. Michigan State University ranked 39th on the same measure. The University of Michigan also ranked 9th on a measure gauging an institution's ability to secure patents, generate licensing income and spawn start-up businesses.

Finney believes the three universities' biggest economic development impact will be in the business spin-off department. He noted that of 23 start-up companies currently working with Ann Arbor SPARK, about half originated at the University of Michigan.

While the Big Three automakers may be losing their clout as economic powerhouses in the region, Finney doesn't think U-M, MSU and Wayne State are necessarily their replacements.

"In terms of just pure economic potential, I think that is always the private sector," he says. "I think our universities are wonderful engines … Our universities will probably influence the next Big Three, but I don't think they are the next Big Three."

Photo captions:

Chris Compton tends to equipment at the National Superconducting Cyclotron Laboratory (NSCL) at Michigan State University - Courtesy of Michigan State University

Lou Glazer, President of Michigan Future, Inc - Courtesy of Walter Wasacz

Michigan State University nuclear chemistry doctoral student Jill Pinter gets hands-on experience at National Superconducting Cyclotrong Laboratory - Courtesy of Michigan State University

Wayne State University - Photograph by Dave Krieger

The three-story S800 superconducting spectrograph, housed at National Superconducting Cyclotron Laboratory (NSCL) at Michigan State University, is used to measure the energy spectrum of charged particles with high precision. NSCL is a world-leading facility for production and study of unstable atomic nuclei in an open, academic and user-oriented environment, according to the National Science Foundation. - Courtesy of Michigan State University