As few as 10 years ago, Lansing was identified as an economic region supported by three pillars: State Government, General Motors and Michigan State University (MSU).
Today, state government is still present but smaller; General Motors is challenged, but locally-produced goods are doing well; and MSU is emerging as the engine driving the growth for the new economy.
Neogen is one example of a highly successful spinoff company from the university, doing high-end research, making products sold throughout the world to ensure the safety of food and animals. Neogen recently announced that it surpassed $100 million in annual income and now employs more than 450 employees in multiple U.S. and international locations.
Niowave is another spinoff company from the university. This company, located in the old Walnut Street School, is manufacturing components for the cyclotron and was originally expected to employ eight to 10 people in 2008. Today, Niowave employs 20 people — most of them retrained auto workers who quickly adapted to the advanced manufacturing operation. By seeking new markets and industry innovation, this relatively new company is already planning to expand its current operation and facility.
MSU is also driving the emerging information technology sector with its 350 companies rapidly becoming the newest pillar of our regional economy. A report from the Capital Area Michigan Works! specifically outlines how IT opportunities are growing in the capital area.
For example, between 1998 and 2004, IT grew by 20 percent, about seven times faster than the rate for all jobs. Earnings in the IT industry alone are 75 percent higher than the average for all industries. The vitality and opportunities available within the local IT industry are often overlooked —or completely off the radar—among capital area businesses and residents.
Another recent study by the Capital Area Michigan Works! documents the addition of the insurance and financial sector as another growing and stabilizing pillar. It shows that the capital area is home to several major insurance carriers — Accident Fund, Auto-Owners, Blue Cross Blue Shield of Michigan, Delta Dental of Michigan, Farm Bureau Insurance of Michigan, Jackson National Life, Michigan Millers, Citizens Insurance, AP Capital and FinCor Holdings, Inc. (parent of MHA Insurance Company).
The insurance and financial industry is the second-fastest growing sector and is one of only four private sector industries adding jobs between 2000 and 2006, when it expanded by nearly 1,600 jobs. Average pay in insurance and financial services ($53,885 annually) in the capital area is nearly 50 percent higher than the average for all private sector industries ($37, 087). The industry is having difficulty finding workers in several occupations, especially in college-degreed areas, and is concerned about scarcity of workers in the future.
The creation of the Office of Bio-Based Technologies by MSU President Lou Anna K. Simon has already resulted in a federal grant of more than $50 million, the assembly of one of the most talented bio related staffs and the recognition of MSU as a leader in the bio-economy. It is just a matter of time before we experience new business sprouting up as a result of this effort.
Lansing is no longer dependent on an economy shaped like an unstable three-legged stool, but is emerging as a more diversified and stable six-legged table.