Blog: Lou Glazer

Unfortunately, after decades of building a world-class higher education system, Michigan has been under-investing in our universities and community colleges for years. Since 2000 state funding for higher education has been cut. Policy makers have consistently ranked higher education as a lower priority than tax cuts, k-12 education, prisons and health care. If that’s not bad enough, within the higher education budget the trend has been to fund more generously the non-research universities, rather than the three major research universities. From an economic development perspective, this makes no sense.
Its time for a change! We need civic, business and political leadership (as they are doing in leading edge communities across the planet) to put research universities at the center of our economic growth strategy.

There are other more predictable ways research universities boost our economy:

• Forget spin-offs, research universities themselves are major job creators. Higher education is one of the fastest growing areas of long-term, good-paying employment growth. And within higher education, research universities are the most important because they are export-based enterprises. Rather than just selling goods and services to each other, research universities are growing the wealth of the state/region by bringing $ from across the country. In total Michigan universities--mainly the three research universities--bring in more that $1 billion annually of federal funds and employ thousands of knowledge workers.

• Higher education’s importance in preparing talent for a knowledge economy is clear. But it also is one of--if not the--most important assets in retaining and attracting talent.

Our universities--particularly the research universities--are among the few enterprises in the state that attract talent from around the world: students, faculty and researchers. And they are anchors of the kind of neighborhoods that young talent wants to live in: mixed use, high density, walkable, culture and entertainment rich. Those kind of neighborhoods are essential to keeping recent college grads here rather than Chicago, Seattle, etc. It's no accident that such neighborhoods are growing around the University of Michigan and Wayne State.

• Knowledge-based employers are increasingly locating where they find knowledge workers. And that means around research universities. If you want to attract world-class enterprises like Toyota, Google and Pfizer, as Ann Arbor has, it helps a lot to be the home of a world-class research university.

And yet, for some reason, even though in the University of Michigan we have one of the great research universities in the world and in Michigan State and Wayne State two others that rank in the top 100 nationally, Michigan policy makers have never viewed major research universities as a key economic resource. This needs to change!

One can’t emphasize enough, in a knowledge economy, the strategic importance of our major research universities. Communities across the globe, recognizing the importance of research universities, are trying to replicate what we already have here.

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.

Bill Gates in a 2005 presentation to the National Conference of State Legislatures said it best:

... take the two big leading industries, industries around biology and medicine, that's one, and industries around computer technology, that's two. The job creation and the success for those industries have been overwhelmingly in the locations where there is a great university. There's an almost perfect correlation between the number of jobs in a region and the strength of the universities. And, that will continue, whether it's new fields like nanotechnology, or those two fields I mentioned, on the ongoing strength that they'll have. And so for this country, we have to have the best universities.

Conventional wisdom has it that the most important contribution that research universities make to the economy is by spinning off for commercialization new knowledge. No question places where new knowledge is being created have a big edge in being the places where new technologies are commercialized. But there are no guarantees. It's hard to turn an idea into a commercial success. And when you do, often there aren’t many jobs or they go elsewhere.

How to revive our economy is Topic A. When you look at the places across the country with the strongest economies the answer is clear: talent!

What most distinguishes economically successful areas from Michigan is their concentrations of talent, with talent defined as a combination of knowledge, creativity and entrepreneurship. Quite simply, in a knowledge-driven and entrepreneurial economy, the places with the greatest concentrations of talent win.

If you want to grow a high prosperity economy here, the priority is to prepare, retain and attract talent. Nothing else is close.

As we assess the assets Michigan has to concentrate talent, our higher education system rises to the top of the list. That is particularly true of our major research universities. So the most important thing business, civic and political leadership can do for the future economic success of Michigan and its regions is to ensure the long-term success of a vibrant and agile higher education system.